Registration of foreign companies

Opening a company in a country that is not the birthplace of the founder of the project is no longer a dream since, over the past 10-15 years, the openness of most world governments to foreign investors has increased significantly. That is why set up company abroad can now have more advantages than starting a business in your hometown.

Moreover, if you are targeting a larger audience that will potentially be interested in your product or service, then there are no other options to expand your business opportunities. And this is almost impossible to do without a foreign company. Registration of a foreign company has many advantages that everyone who wants to maintain their financial well-being should take into account, as this creates the basis for long-term financial benefits. Starting a business abroad gives you access to new business opportunities, better tax protection, and unprecedented financial confidentiality.

Why to set up business abroad

Opening or registering a company means creating your own business as a separate legal entity, in accordance with the laws of the country, whereby you can effectively separate your legal and financial obligations from the obligations of the company. The property can be divided between several people or belong to one person. Moreover, all participants will not be personally responsible for the financial and legal status of the company.

Let’s look at some of the things worth considering before starting to register a company abroad:

• The financing of your company’s activities and budgeting.
• The requirements for taxation and reporting.
• The process of the company’s registration.
• Language difference issues.
• Research of the local market.
• Foreign exchange risk.
• The accessibility of professionally trained manpower.

With this in mind, the benefits of such a legal structure can be immediately understood. There are ways to save your personal income, move assets to save more money, and use the company as a shield for your financial decisions. These benefits become even more apparent when you are considering opening business abroad.

Ways to open company abroad

There is no single procedure that would apply in all countries. Each jurisdiction will have its own set of rules, which you will have to follow if you want to create a company there. However, before starting the actual process you should follow a few simple steps:

• Based on the results of marketing research and your ideas, choose the country that is most suitable for the objectives of your business project.
• Determine the composition of the founders of a foreign company, as well as key managers who will carry out direct management.
• Decide on the registration form of your representative office. This may be the status of a private entrepreneur at the beginning of your business, a limited private company or a corporation. It all depends on your goals and the participation of your and local capital in operating activities.
• Prepare the documents required for the founders of your business overseas.

Company types you can register abroad

There are a lot of types of companies. There are private corporations, individual entrepreneurship, private banking, insurance, investment, pension, and private funds, but all of these types are rarely used. This is because either their activities will be carried out personally by the founder and full property liability will be incurred, or a special license is required, as is the case with investment, insurance or banking services.

Therefore, only three types of companies are popular among foreign investors all over the world:

• LLC (Limited Liability Company).
• IBC (International Business Company).
• A private company, or LTD (Limited Company).

Requirements for companies

Although LTD and IBC are quite similar, LLC is slightly different from the usual structure of a company. As a rule, IBC is a limited liability company without any obligation. This is the most frequently used business structure in the world, which is characterized by tax exemption (or a drastic reduction) and accounting (perhaps not officially but in practice), as well as the anonymity of its owners.

Regarding the internal structure, there are no significant differences between LTD and IBC. Both have their own managers, partners, registered capital, limited liability and many other characteristics. LTD may also be tax-exempt. This is especially true in countries with territorial taxation, where the income only received in this country is taxed, but not income received in other countries.

Required documents

As it was stated above, there is no single procedure that would apply worldwide, however, business registration services requirements for documents are similar:

• notarized translation of a passport,
• bank statement with payments for your property,
• recommendation from your local bank.

Another thing to understand, you may need to rent a real office space to register your company. It may also be necessary to hire a local secretary or partner.

In general, there are general recommendations on how to conduct international business for companies of any type:

• Establish an office in the country of registration of the company (increase the substance).
• Register or move the company to the country with the best reputation (re-domicile).
• Keep at least management accounting. Ideally, when both accounting and auditing are done.
• Obtain licenses where they are required.

Benefits of starting a business abroad

Although the main advantages to start business overseas are taxes, you can also count on the different benefits of using a foreign company. You will find centers of specialized financial services around the world, such as investment expertise or greater financial confidentiality. Singapore, for example, is well known all over the world as a center of financial expertise that can help create extremely lucrative financial portfolios. Similarly, the Swiss financial system prioritizes financial confidentiality as a unique advantage.

Working in strategically important places like Dubai or Hong Kong will give you access to the most dynamic business communities that will allow you to further expand your business potential. Choose any location that you think will minimize your losses and maximize your profits. There are many places in the world, each of which offers a unique set of advantages. It must be used to set up business abroad.

Quick and easy company international formation

If you want to develop a strategy to reduce the tax burden, then there is nothing better than to approach this issue comprehensively. This means opening an account in a reputable bank for an international company in a stable country with strict laws on the protection of assets, property rights and high requirements for the confidentiality of account holders and companies.

Considering the additional benefits of establishing international companies, it is impossible to say how high your financial performance will be after a while if you go along this path. In many cases, you will not even need to actively participate in this process learning how to start business abroad.  You can just let your consultants cope with creating an efficient international business structure.

Thus, we always advise our clients to try to move their activities abroad. With your company registered internationally, you can save tens and hundreds of thousands of dollars, if not millions, in the form of tax benefits over the years. Then, using all the services available to you, you can begin to diversify your investment portfolios and achieve a level of income that your competitors can only dream of.