Registering a company abroad is usually a lot easier than you may expect however there are many elements to consider and an important amount of research required. There may be a number of reasons why you may want to expand your company abroad – From taking advantage of lower tax rates, want to target new markets or even have a shortage of skilled labour in your home country. These tips will help you prepare for your new venture.
1. Taxation and Reporting Requirements
A major aspect to contemplate when choosing a destination is the taxation and reporting requirements of the country. You should always research the countries corporate tax rate and VAT rates along with any other considerations in advance to get a clear understanding of the amount of tax your company will be liable to pay.
Depending on law’s in the jurisdiction, the management and control of the company may need to take place physically in the country. If this is the situation and you do not plan on having a physical presence in the country for the time being, appointing a local resident director to be board may be your best option.
2. The Incorporation of the Company
The company formation procedure is different in every country around the world. It is often in your best interest to outsource this to an international company formation agent such as Company Registrations Worldwide who can ensure the process is streamlined and help you avoid any mistakes which could become costly. An experienced professional will be familiar with local laws and requirements in your chosen country and can help assure that your company gets the best possible start.
3. Language Barriers
Overcoming the language barrier of your target country is potentially the most difficult challenge faced when setting up overseas. From communicating with your clients and providers to signing legal documents, being unable to communicate can significantly slow you down. Hiring a full time translator to work with you can be quite expensive. A good alternative is to employee a bilingual individual on either a weekly or monthly basis to support you with communications when necessary. This can significantly reduce costs. There are also plenty of free online tools such as Google Translator and Linguee which are perfect for translating emails and documents.
4. Market Research
When you are expanding into a new market, examining the local spending is an important exercise. Do not rely on preconceptions when studying the market. Instead find out what benefits your market looks for in a product/service. Identify local competitors and perform a SWOT analysis on them.
Through in-depth market research, you may discover that the market you first thought was suitable for your business may be over-saturated. Conversely, other jurisdictions that you may not have originally considered could turn out to be a more suitable option. Specialist research companies can provide further assistance and insights.
5. Currency Risk
Companies that operate internationally are vulnerable to currency risk and fluctuation. Dealing with this is all about managing risk as currency fluctuation is generally unpredictable.
It’s a good idea to set up multi-currency accounts if you wish to minimise your exposure to currency fluctuations. This will allow your business to make and receive foreign currency payments without the need to convert the funds into Euro.
6. Skilled Labour
Not all countries offer the same level of access to skilled labour, so it is important to research the availability of in your chosen country. It’s a good idea to speak to a local recruitment consultant in advance of any decision. You need to have a good understanding of salary expectations, employer social security contributions and employment legislation. You may need to move a senior executive over to the country in question in order to get things moving, and you may need to find out the impact this has on the executive’s personal tax situation as well as visa requirements.
For more information on registering a company overseas or for details on a particular jurisdiction please do not hesitate to contact us +353 (0)1 687 4518 or fill out our contact form and a company formation expert will be in touch as soon as possible.