Things to consider when building an international structure
It’s very important thing to notefromthe beginning that there is no one size fits allstructure for a business, investment, operation, etc.
Every case is different and there are lots of things to consider:
- Who aretheowners?
- Who arethecustomers?
- Where are thesuppliers?
- What type of business is it?
- Where the staffarelocated?
- What the assets are?
- What the risks are?
- What regulations apply?
- How you accept payments?
- What are you trying to accomplish?
- etc.
When considering international corporate structuring you want to pay attention to lots of things.
First of all, you want to pay attention to tax.
This breaks into the three pillars of residency: you as an individual, your income, and your corporation.
Second, you want to pay attention to liability consequences.
What if you get sued? What happens if you get divorced? What if some government intervention occurs?
Third, you want to pay attention to banking. This is a huge thing today.
Historically, you were able to form a company anywhere. You could open a bank account very easily just walking into a bank. Bank account opening in Switzerland wasvery common among rich people. Those days are long gone.
Banks do lots of screening today. Whether they accept you or not depends onlotsof factors. Some banks are easierto deal withthen others. This is why when planning international structure banking is one of the things that we consider first.
Besides this, we need to consider how are you going to accept payments. Some countries don’t support certain services, such as PayPal.
Fourth, you need to pay attention to regulations in a foreign country.
Maybe you are in the industry that’s not supported in that country.
Then, you need to worry about audit. Do you need audited financials?
What about VAT, what about sales tax?
What are regulations around investing? There is lots of other rules and regulations that you need to pay attention to.
Finally, one thing that’schanged in the world today is that you really need to have some substance in a foreign country when setting up a structure.Or at least if youdon’tyou’re going to have a hard time maintaining a stable structure and even a harder time with tax.
Ideally, you’llwanta real office, team, customers and everything else that proves that you are doing legit business in that place. If you don’t have what the country is looking for you might end up having lots of issues.
This is why we need to be very thoroughwhen setting up an international business structure.
It’s why a lot of the advice from those unqualified in the field, or even lawyers or accountants who might just look at one component and save you on tax but screw up your business operations are dangerous.
We help clients legally reduce their tax through international tax planning, as well as help with company formations, bank account openings, residency, citizenship, and payment processing.Havea question you want answered? Book a consultation now!
