Do you want to move your business abroad? Three things you should never do
Do you feel that you have accomplished everything you could in your home country? Do you need a new challenge? Do you want to expand your business and you feel that your country is holding you back? It may be time to move your business abroad! However, such a decision cannot be taken lightly: it's best to do everything right in order to avoid potential issues in the future. Here are some offshore tips that may be handy at this stage of your business career.
How to establish an offshore company
Offshore company incorporation may be exactly what you need right now. After four years of working with corporate experts at Mundo, I was able to gather some knowledge on what needs to be done when someone wants to expand their finances.
Our experts can give you the best offshore company advice since they have worked with jurisdictions such as Panama, Nevis, Seychelles, the Cayman Islands, and the USA. In the meantime, this article is not about what you must do but quite the opposite: we present three things you should never do if you want to move your business abroad. We think this is the best approach as it will prevent you from making mistakes from which you can't go back. Here are three “don’ts” that you should always consider when it comes to offshore company registration.
Three things you should never do if you want to move your business abroad
Jump into a jurisdiction without proper research
The process of moving your business to another country is not simple. Naturally, there are some jurisdictions more straightforward than others, but in general, it will require time and money. Thus, it would be a huge loss to invest in the wrong country.
Make sure you conduct the right research so that you are well aware of what your responsibilities are and what types of liabilities you may encounter.
For example, understand what the country’s political and economic history is, especially when it comes to business policies. Find out exactly what taxes you must and must not pay and under which conditions.
Usually, you'll be aware of the offshore company incorporation fees, but what about maintenance? Make sure there are no surprises down the road. Ask your agent what are the legal and government annual fees to keep your company running. Also, some jurisdictions require a certain amount of meetings per year and sometimes they stipulate that they must be held in the country.
Auditing and reporting are extra expenses that you need to consider. One of the things you have to ask is exactly what kinds of requirements the company will have and how much it will cost. In many cases, the agent himself/herself takes care of this task.
Licensing and activities
This is one of the best offshore tips that we can give you. Before the offshore company incorporation, make sure to establish what kinds of activities you want to conduct. Some combinations of structures and countries forbid some legal entities from conducting certain types of activities. The Panama foundation, for example, can't engage in commercial activities whatsoever. Moreover, some of these may be restricted to inside or outside the country only.
Keep in mind that some operations require a license. Generally, these are banking, brokerage, insurance, and crypto trading, but this changes according to the jurisdiction. Factor in the licensing expenses and maintenance when you decide to move your business abroad.
Incorporate your company without an experienced agent
The possibility to save a few bucks can be tempting, but don't forget that this can bring you higher costs in the long term. For starters, most jurisdictions require a register agent involved, and this is only for your benefit.
Mundo experts, for example, have wide experience in offshore company registration and can give you the best offshore tips and guidance. Although it’s true that some of our members are more experienced in some jurisdictions than others, the team as a whole has handled several cases and can always lean on each other for support.
Most jurisdictions now have substance requirements, which are not at all simple. In many cases, such requirements are not clear, i.e., you won't find them so easily in the legislation and, if you do, they are probably not easy to understand. This is not a minor issue as not complying with substance can result in higher taxes and financial penalties.
The only person who can actually help you with substance is a certified agent or an advisor with experience that can give you reliable offshore company advice.
So, trying to save a few bucks may create higher costs in the future. Also, remember that your agent can help you save time because mostly they take care of maintenance for you. They can also rent an office for you and hire qualified staff.
Fall for no-tax advertising
It's safe to say that every person on the planet would like to escape tax. Hence, falling for no-tax advertising is not so difficult.
Of all the jurisdictions with virtually zero tax, there are many other things to consider. For example, one may be exempt from taxes in one country but subject to them in another one, and your agent may not always be aware of that.
This is why, when it comes to taxes, it's important to get professional offshore company advice from a global tax expert.
If you conduct business in one jurisdiction and live in another one, you must make sure to comply with both. Even if one of them does exempt you, this may be under certain conditions and after a certain process. It may even not be that hard, but if you fail to comply you’ll still end up paying fines.
Some countries tax you for the activities that you conduct in the territory, others tax you for all the income that you receive, no matter where, and others for the income that you generate within the country.
In other words, if you move your business abroad you have to consider where you live and where you're from. It's not the same if you are from the United States, Panama, South America, or the European Union.
To sum up, most countries tax you for all your assets if you live there. There are some exceptions for both sides, but that's beyond the reach of this article.
The bottom line is: always make sure to comply with the laws of all the countries that you're involved with, where you live for more than six months a year, or where you have a business.
Safe offshore company registration with Mundo
After providing these offshore tips, there's not much left to say. Once you understand what you shouldn't do, you can start planning what you should do, and for this Mundo has your back. We offer corporate services in some of the most flexible jurisdictions including Nevis, Panama, and the Cayman Islands.
If you are still too confused by all the information out there, don't hesitate to book a consultation with our Mundo team. We're always happy to help.
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