Every entrepreneur who achieved a considerable success in their homeland thinks about taking a company global. In addition, even if you know how to sell your goods abroad, for example, through an online store, opening a branch in another jurisdiction will greatly simplify many of your business processes.
If you want to sell your product or service abroad successfully, you should take into account one important aspect. In today’s fast-changing world, any successful project must combine two opposing qualities:
Let’s look how this combination works. The ability to respond to obvious changes or any regional features of the consumer market in time will help you to stay afloat and occupy your niche in a hyper-competitive environment. At the same time, a high quality and commitment to traditions are especially valued in a dynamically changing world, even more so when a product is offered to a customer not only as a set of consumer qualities, but also as a whole history of its creation, market entry and its development.
Therefore, our article is for those entrepreneurs who want to take a company global and increase their commercial achievements. At the same time, it is for those who are not going to close the main office in their own country, withdraw capital abroad and move permanently to another country.
The main purpose of any business, apart from its mission and goals, is to increase profit. Therefore, the most common reason for going global is to increase sales. New international markets are usually more comprehensive and promising than domestic markets and conditions for business in another jurisdiction are often better. Although, to be fair, even if new customers are poorer and the sales volume in another country is less than in your home country, you will sell more products than competitors who remain on the domestic market.
On the one hand, it is more difficult to start a business abroad. You will need a quality legal support to help you realise all the opportunities and at the same time not to break national laws that regulate entrepreneurship in a particular country.
On the other hand, a business, which runs in several countries, is less likely to go bankrupt if you allocate resources among all branches in an effective manner. You can open or close certain branches, lose clients and even close the head office, but your project will still be afloat if its profit is generated from several sources which are in two or more jurisdictions.
First of all, opening a foreign branch will make it much easier to work with major financial institutions in Europe. Secondly, an account in one of the most reliable European banks will not only save your funds, but also simplify payment to customers and suppliers.
The authorities of some countries support small- and medium-sized businesses because it is a significant source of tax revenues for a state budget. Support can be provided either through special state programs or through tax incentives. Often the authorities support those companies that offer unique products or services that have no competition on the market. Opening a foreign branch is the best way to benefit from these opportunities.
Moreover, specific features of corporate and taxation laws in different countries, combined with existing international agreements, allow aspiring foreign entrepreneurs to reduce their tax burden.
Frequently, registering a company in another country, especially if you invest a significant amount in the development of a branch (or if your product is unique), gives an opportunity to obtain a visa which allows you to stay for a long time in another country and even bring your wife and children with you.
Local Business vs International Expansion
The definitive answer depends on the main purpose. If the main activity of your foreign company is outside the incorporation jurisdiction and you need to reduce a corporate tax on profit, the best option is one of the offshore countries. As a rule, offshore companies are charged a fixed annual fee, and a foreign income is not taxed. Convenient tax havens traditionally include the former British colonies and the sovereign Caribbean islands.
Notwithstanding all the obvious advantage, registering an offshore company is not always the best solution. Recently, well-known tax havens have been under pressure from the international community and individual major states that do not want to lose tax revenues.
If you need to register a company in a completely “white” jurisdiction in order to go global, advisors at Imperial & Legal recommend looking at some of the EU countries with a mild tax regime for business and the UK.
The specific features of the UK corporate law and the tax regime allow you to reduce the burden on your business. Another advantage of the UK is that it is the world’s recognised financial center. The UK is one of the five most attractive countries for investment due to its unique location on the map of Europe, a centuries-old tradition of entrepreneurship, a strong economy and huge markets.
As a rule, our businessmen choose countries which are characterised by a strong economy, reliable national currency, loyalty of the authorities to bona fide entrepreneurs, effective laws and independent judicial system.
However, you need to know tax and business laws even in a jurisdiction with the most favorable conditions for business. This is the only way to get all the benefits and not be severely punished for breaking some local laws which you do not know.
If you are not a law expert, qualified advisors from Imperial & Legal will help you take your company global. Our wealth of experience allows solving most of the issues that entrepreneurs have in the process of going global.
Imperial & Legal specialists will help you to manage a huge list of tasks:
Imperial & Legal offers three incorporation packages for those entrepreneurs who want to register a company in the UK:
If you achieve a significant business success in your country and are ready to go global, but don’t know exactly how and where to open your first foreign branch, contact us and book a consultation!
As emphasised earlier, entrepreneurs often follow such concepts as tradition, stability and continuity in order to sell their goods successfully in a constantly changing world. This is especially evident in consumer goods, for example, when a large international holding company producing sportswear suddenly releases a “vintage” collection of sneakers that replicate similar shoes from 30-50 years ago. If your product or service is unique on a new market, has some connection to the country of origin or even a history of appearance, it is not reasonable to use this advantage for further promotion when going global.
In addition, the immigration authorities often pay close attention to the new foreign branches of companies. The best option is to open a relatively independent representative office of an already existing and successful company abroad instead of completely relocating your own business.
In order to prove it, here are some conditions of the Home Office for applicants who apply for a Representative of an Overseas Business Visa. In particular, applicants cannot own more than 50% shares of a parent company. They should send a business plan and a package of required documents, and all the provided information. It must convince a visa officer that only a foreign branch will be opened in the UK, while a parent company will remain in a home country.
Yes, it is possible in several jurisdictions that offer passport programs in order to attract foreign investors. Even more countries are ready to grant you a residence permit if you invest a significant amount in the development of your foreign business.
Example 1: Antigua and Barbuda citizenship by investment
Under the terms of Antigua and Barbuda citizenship by investment, you can invest at least $1.5 million in a government-approved new or existing business project, while the government will provide passports to you and your family after payment of additional fees. You can get your money back in 5 years.
Two or more applicants must invest at least $400,000 or more, if the total capital investment of all participants is at least $5,000,000.
Example 2: Opening a company in the Spanish territory
If your project meets at least one criterion listed below, the Trade and Industry Representative at the Spanish embassy will approve it. Moreover, your personal contribution to its development must be sufficient in order to obtain a residence permit for 2 years, which can be extended later.
What criteria are used to evaluate your future business:
You should invest at least £2 million in shares of UK companies to obtain a UK Tier 1 investor visa. The UK wants an inflow of foreign capital to go to the real economy. Therefore, the main activities of the business entities should not be related to construction, but also to buying, selling and investing in real estate.
Therefore, if you have a company registered in the UK, which is not connected to real estate, you can invest the necessary amount in the share capital of this company or group of companies. It will kill two birds with one stone – to take your business to the European market and get a Tier 1 Investor visa.
It depends on your willingness to invest money in a foreign business and on what responsibilities the UK branch will have. You can apply for a UK Start-up visa, UK Innovator visa or a UK Sole Representative visa.
You can choose a UK Start-up visa or a UK Innovator visa if:
Sole Representative Visa is more comprehensive. If you do not plan to move to the UK and entrust the opening and development of a foreign branch to another person, this visa category will be a great solution for your hired manager.
If you want to get more information about visa categories, options and ways for your company to enter the global market, please contact Imperial & Legal.
We will work with you to find a customised solution for your immigration, second citizenship, business, tax and other needs.
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