Publication date: 01.10.2024
I am studying in the third year of the State University of Economics and Technology.I specialize in contractual, economic and corporate law, in particular, I provide consultations and write articles.
Business registration abroad is the process of creating a legal entity in another country, which allows you to conduct commercial activities at the international level. This process involves choosing a jurisdiction, preparing and filing the necessary documents, and complying with local laws. Registering a business abroad can be a complicated but rewarding process. Here are the main steps that should be taken into account when opening a business outside of Ukraine:
- Country selection: Tax systems for entrepreneurs in different countries are assessed. The ranking of countries by convenience for business (Doing Business) is analyzed. It is necessary to understand the legislation governing business in the chosen country.
- Choice of business form: Limited liability company (LLC) is a common form for small and medium-sized enterprises. A joint-stock company is suitable for large businesses with shareholders. An individual entrepreneur (FOP) is a simple option for individuals.
- Preparation of documents: The charter of the company is a document that defines the main provisions of the business. List of founders: Personal data of all founders. Registration form: Completed appropriate form for business registration. Other documents: Depending on the country, additional documents may be required, such as a business plan, proof of address, etc.
- Obtaining licenses: Depending on the type of activity, special licenses may be required. Make sure your business meets all the requirements. It is recommended to engage a local lawyer or consultant to clarify the specifics of doing business in the chosen country.
Choosing a jurisdiction for doing business
Choosing a jurisdiction to do business is an important step that can affect the success of your business. Here are some practical tips that can help in this process:
- Determine your business goals: Determine whether you plan to run a local, regional, or international business. Depending on the field of activity, there may be different requirements and regulations.
- Evaluate tax policies: Compare income tax rates in different countries. Pay attention to taxes on dividends, royalties and capital gains. Investigate double taxation agreements.
- Analyze the regulatory environment: Score countries using ratings (eg Doing Business) to determine the ease of starting and doing business. Research what licenses and permits are required for your type of business.
- Assess the legal system: Choose countries with a clear and stable legal system. Make sure that the investment will be protected from wrongdoing.
- Consider currency risks: Assess the stability of the jurisdiction's currency. Avoid countries with unstable currencies. Consider restrictions on transfers and currency exchange.
- Research the infrastructure: Make sure the country has a developed transport and communication infrastructure. Assess how easy it will be to enter local and international markets.
- Explore the human resource potential: Research the availability of qualified personnel in the selected country. Compare salary levels and hiring costs.
- Assess cultural aspects: Understand local business etiquette and traditions. Consider language barriers if you plan to do business in a country with a different language.
Question
What are the advantages of registering a business abroad?
Answer
The possibility of reducing the tax burden thanks to more favorable tax rates or agreements on the avoidance of double taxation. Expanding into new markets can provide increased sales and new business opportunities. Registering a business in jurisdictions with developed legal systems can provide better asset protection from lawsuits. In some countries, business conditions may be less strict, making it easier to do business. The ability to choose the form of organization that best meets the needs of the enterprise (for example, a limited liability company, a joint-stock company, etc.).
Question
What problems can you face when opening a business abroad?
Answer
Registering a business in another country can require a thorough knowledge of local laws and regulations, which can make things difficult. Costs for registration, legal services, accounting and other administrative costs can be high. Difficulties in communication and understanding local customs and cultural aspects are possible. If the business is perceived as a "tax shelter" or "shadow business", this can negatively affect the reputation. In some jurisdictions, there may be problems with enforcing contracts or protecting property rights.
Registering a business abroad can open up new opportunities, but it is important to carefully evaluate all the advantages and disadvantages in order to make an informed decision. It is recommended to engage professionals for advice and legal support in this process.
Business registration procedure in European countries
The business registration procedure in European countries may vary depending on the specific country, but generally includes several standard stages. Here is a general scheme that can be adapted to specific conditions:
- Choice of legal form: Choice between different forms of organization, such as: LLC, JSC, FOP, etc.
- Choosing a company name: Checking the presence of the chosen name in the company register to avoid conflicts.
- Preparation of documents: Necessary documents may include: company charter, decision to establish a company, documents confirming the identity of the founders (passport, ID), registration address. At this stage, constituent assemblies are convened, powers of management bodies are determined, and internal documents are approved.
- Company registration: Submission of an application and other documents for registration to the relevant state body.
- Obtaining an identification number: After registration, the company receives an identification code or tax number.
- Opening a bank account: Opening a corporate bank account for conducting financial transactions.
- Registration with tax authorities: Registration to obtain a tax number and, if necessary, registration to pay VAT.
- Additional licenses and permits: Depending on the type of activity, it may be necessary to obtain additional licenses or permits.
Lawyer services for opening a business abroad:
Opening a business abroad can be a complex process that requires legal support. Here are the main types of legal services
Lawyer consultation and legal analysis of the situation: Analysis of the advantages and disadvantages of different countries for doing business. Lawyers online will provide recommendations on the optimal form of organization (LLC, joint-stock company, etc.). Consultations on the registration procedure in the selected country. Consultations on business activities, in particular, changes in the charter, reorganization, etc.
Lawyer help during registration: The lawyer will ensure the preparation of the necessary documents for business registration. Preparation of founders' protocols and other corporate documents. The lawyer services online will represent interests in disputes or negotiations with state bodies. Development of the company charter.
Licenses, permits and legal support: The services of a lawyer will help in obtaining the necessary licenses and permits for conducting business. Preparation and review of contracts with suppliers, customers and partners. Consultations on labor legislation (conclusion of labor contracts, registration of employees). Conducting a legal business audit and analysis of business risks in the selected jurisdiction.
Registering a business abroad can be beneficial for expanding the market, optimizing tax costs and accessing new opportunities. But this process requires a serious approach and attention to detail. Lawyer advice for the process of opening a business abroad will help to avoid legal mistakes, optimize processes and ensure compliance with local laws. This is especially important in the context of international legal norms and the specifics of a specific country.
