If you are interested in internationalizing your company, you need to set up a company in an overseas jurisdiction as there are various benefits to relocating your existing business. This article will address those advantages as well as the process on how to relocate your business overseas.
Benefits of Relocating Your Business Overseas
Business owners relocate their companies overseas for various reasons. According to ChicagoTrust, “There are legitimate ways to structure your business interests overseas and realize significant benefits from an asset protection standpoint, as well as tax-standpoint.” One example they sited in a recent article is that Google has cut its taxes by $3.1 billion in legitimate ways by moving portions of their company overseas. Some of those benefits are listed below:
- Taxation cuts
- Protecting Assets
- New Market Interests
- Reinvestment of Capital for US citizens
Type of Business
One basic consideration during this process is to ascertain the ease of transitioning your existing business overseas. For example, expanding your online business overseas can be done in a manner where you are still able to maintain a viable relationship with your existing clients. Not every company will have an easy transition process and some will not be able to set up overseas. According to Diana Scully, an interior designer from Melbourne, Australia who recently set up an international design business online, she advised that self-employed individuals and those who operate an online business have a “good foundation as it gives you control and flexibility in your work.” The following three factors will assist companies in making a smooth transition overseas.
- The industry is well established in the new location
- A plan is in place to maintain good relationships with current clients
- Your company has a recognizable market presence, especially online
- You have already cultivated symbiotic relationships overseas in the new location
Other Factors to Consider
In addition to the type of business you have, there are other factors to consider as well. One option is that companies can move a portion of their business overseas as a subsidiary rather than relocating the entire business. This can be a stepping stone toward moving the entire company in the future or simply a way to take advantage of the various benefits already mentioned. Another factor to consider is the time difference. For example, this will affect banking operations and customer support assistance. A third consideration is choosing a country in which to register your overseas business. You need to ascertain the benefits and disadvantages of moving to each of the countries on your contender list. Consider the following when making your decision:
- Taxation laws for that country
- Corporate law for that country
- Consider advice from a lawyer or corporate advisor
- Locate a respectable bank to do business with
Choosing a recognized bank in a stable country is extremely important for the viability of your business. It is also important to choose a respectable corporate service provider. Some companies may need maximum confidentiality for their business. If this is the case, your company and bank account may be set up in different jurisdictions.
Relocating your existing business overseas should begin with a concise assessment of the benefits and disadvantages of relocation. It is important to consider your specific business type and the stability of your field in the desired country location. Remember to consider the other three factors: creating an overseas subsidiary, the time difference and which is the best country for your business needs.