In the current economic situation, Russian entrepreneurs increasingly want to optimize risks, in particular, tax risks. Therefore, most of them are thinking about registering a company abroad, where there is a more lenient tax policy.
Why is it profitable to register a business in another jurisdiction?
- loyal legislation – government agencies do not conduct frequent inspections, and information about the founders is classified;
- taxes are either reduced or completely absent;
- a high level of prestige in front of partners and customers;
- it is possible to conduct business in a foreign market and work closely with international enterprises;
- founders and employees will be able to enter easily.
The advantages of the business depend on the selected region. Let’s look at this process in different regions.
The best jurisdiction for trust property is Cyprus. There are no fees for trusts and a low level of administrative expenses. The price usually starts from 4000 € (the amount includes stamp duty – 450 € and annual maintenance of the structure from the 2nd year – from 3000 €).
The Liechtenstein Fund can be used to transfer assets into trust management and, as an element of a holding, for example, for financing within groups.
If you decide to create a foundation, you will have to contribute the authorized capital of 30,000 CHF. And the creation of this structure will come out – at least 18,000, maintenance – from 8000 CHF.
In Hong Kong, the principle of taxation will attract: the corporate fee of 16.5% applies only to profits received from Hong Kong sources. In other cases, the organization should not pay. The founder should not rent office space and hire local employees. Remote control is available. This structure is ideal for working with the markets of Asia, Europe and America. The average check of the institution is from $ 1400 (depends on the services, prices LTD).
The Emirates have a favorable investment climate, and they are not officially included in the list of countries not recommended for cooperation.
Previously, there were two options for entrepreneurs: offshore and structures in the FEZ. Now foreign investors rely only on enterprises that are located in the FEZ.
These structures are:
- work without problems on the domestic and international markets;
- do not need the participation of a local shareholder;
- provide an opportunity for the beneficiary and family members to obtain a resident visa;
- are served on good terms in banks.
It won’t work that way with local offshore companies.
The price of an institution in a FEZ depends on the distance from Dubai and Abu Dhabi, as well as the composition of services and the type of activity. On average, you can register from $ 7,500.
The United States has a multi-level taxation system, thanks to which any state has the right to independently determine the tax threshold. Hence, Wyoming (no NGO), California and Nevada are considered optimal units.
In some states, it is possible to maintain a degree of confidentiality through closed registries. Another important point is that there is no automatic exchange of tax data between the USA and some jurisdictions, for example, the Russian Federation.
The best solution would be to choose a corporation. Shareholders in this structure are fully protected from personal lawsuits and are not responsible for the obligations of the company with their real estate.
You can open an institution in the USA for $ 2500. To open a corporate account, the director must be a local resident. Otherwise, the nominee director option is available to the beneficiary.
Among the European territories, Estonia offers a tax-free regime. Here, the profit does not fall under taxes on the company until it is distributed as dividends. This solution, together with large-scale economic digitalization, makes Estonia the most attractive in the EU for business.
It is possible to open or service an enterprise as simply as possible through an electronic register. The beneficiary has the right to apply for a residence permit if the organization has been operating for more than six months.
The opening receipt starts from 800€. Another advantage is that the authorized capital and rental of the office space are not required. The reverse side of jurisdiction is that Baltic banks are rather disloyal to foreign residents, do not serve them in local branches. The issue can be solved with the help of credit and financial organizations of neighboring states that are ready to serve without residency.
How to register a business abroad
Select a region
There are 3 groups of countries:
- Offshore zones. Main advantages: loyal conditions for clients without residency, tax benefits, complete absence of fees, confidentiality. Disadvantages: the dubious business reputation of the future enterprise, restrictions on interaction with it from many states. There is also a blacklist of offshore countries in each state.
- A jurisdiction where low and moderate taxation applies. In general, it is similar to the first version of its preferential taxation system. In comparison with classic offshore companies, they have easier access to data about the founder. An institution that is registered in this jurisdiction will easily be able to participate in international transactions. Examples: Cyprus, Latvia.
- Other regions. The regions of Asia, the EU and the USA are considered popular due to the stable legal field.
Study the legislation
When opening a company abroad, you need to know the laws. This will make it clear:
- why the services of a formal director;
- how to open an office;
- how to submit reports;
- what is the control by the state and much more.
It is also important to study the legal field.
Choose the name and form of ownership of the company
Similarly to the legislation of Russia, the name should:
- contain an OPF;
- be universally recognized and national;
- be unique;
- conform to moral norms;
- do not mislead.
The order of registration and the type of taxation is largely determined by the legal entity’s management fund. For example, in the UK there are limited liability companies (Ltd, an analogue of LLC in Russia with payment in a general manner) and partnerships of the same type (LLP, without payment).
Complete the documentation
- application for opening;
- copy of the founder’s passport;
- proof of residence, for example, utility bill;
- recommendations from the bank;
Also, depending on the state, additional documents may be requested, for example, data on shareholders, a business plan, a constituent agreement and confirmation of the legal address of the office.
The registrar accepts your papers, and then sends them to government agencies. In some jurisdictions, applications are accepted in a remote format, for example, in the UK. But for most territories, personal presence is still important.
On average, the process takes from 3 weeks to a month. If the decision is approved, then you will receive a full package of papers. Sometimes only certified copies are issued – the originals remain with the secretary or registrar.
Opening an account abroad
Select a bank branch
When choosing a bank, its representative office is also suitable. But there are several features:
- The price for opening and maintenance does not always correspond to reliability and quality.
- The deadlines for the preparation of documents take from 2 weeks to a month. Some organizations have accelerated registration.
- Convenience of registration: personally present / open remotely.
- Prestige is the choice of a reliable bank. These can be found in the independent rating of analytagents, for example, Moody’s.
- Convenience of work – availability of employees who speak English and Russian, Internet banking, notifications.
- Requirements – the bank sometimes requests additional recommendations.
- Confidentiality is important if you, as a founder, want to be sure of non–disclosure of your identity data.
Select an account
The type of service depends on the list of all services, as well as on their quality. The price will also change from this. You need to choose an account according to the needs of your business: some need to reduce maintenance costs, others need to speed up the processing of transactions by bank employees.
Apply to open
For registration , you will need:
- certificate of registration, company charter;
- power of attorney and other document confirming authority;
- proof of origin of funds;
- sometimes – recommendations from other clients of the bank.
If necessary, each document must be translated and apostilled.
How much does it cost to register a company?
Registration prices are different in all countries. The receipt includes mandatory (state duty, authorized capital, invoice, document translation) and additional payments:
- deposit – returned after closing the account;
- nominal service. The price is from 500 EUR;
- office rent;
- the cost of making an invoice when visiting the country.
Some payments will have to be made on a regular basis. These are:
- nominal management;
- rent of premises;
- annual renewal of registration with government agencies;
- accountant services (from 250 EUR per year);
- account maintenance.
How to open a branch
For the correct collection of documents, it is better to start by reading the civil and corporate law of the country in which you plan to do business.
Make changes to the Unified State Register
When registering, you need to enter data in the Unified State Register of Legal Entities. Come immediately with:
- application form P13014 with the first page filled in, sheet L and N. When submitting to the tax service in person or by e-mail, you need to notarize the application;
- notification of registration of the branch – translation by a notary plus a copy of the original;
- the decision to establish a branch is a free–form document containing the details of the parent company, the country and location of its location, the name of the branch;
- the decision to appoint the management of the subsidiary – empower the employee;
- the regulations on the branch – there are no requirements. The document is responsible for the regulations of the internal work of the unit, for example, the structure. Payment of the state fee is not required.
You can send documents to the FTS inspection in 3 ways:
- Hand it over personally.
- Send by mail.
- Send remotely using an electronic signature.
The whole process will be completed within 5 working days. When you receive the paper, issue a power of attorney to the head of the branch and make a translation certified by a notary. This will allow you to sign documents.
Open an account
To work with foreign counterparties, you will need a separate foreign currency or settlement account abroad for the main enterprise. The selected bank will inform you about the full list of documents to open. But more often they ask for standard constituent papers, passports with notarized translation and copies.
In order to provide the branch manager with the opportunity to manage the finances of the division, it is important to specify the authority in the power of attorney.
After opening, notify the IFNS. After filling out the form for CND 1120107 with the details, send it to the tax service in a convenient way for you.
Recruit employees to work in the branch
Hiring foreigners or transferring Russian employees from the office is available for the branch. In the second case, it is necessary to conclude an additional agreement, in addition to the employment contract, since there is a change of place of work.
Taxes and insurance premiums are paid according to the laws of the Russian Federation. The exception is non-resident employees of Russia. They will pay in another country on their own. These are individuals and foreigners who have not lived on Russian territory for 183 consecutive days.
Rates for residents are standard:
- 13% – personal income tax;
- 2.9% – social;
- 22% – pension contribution.
Sort out reporting and taxes
The main taxes need to be paid in Russia, except:
- Value added tax. The exemption from payment is valid when a foreign division sells goods and services on the territory of another state. If the actions take place on the territory of the Russian Federation, then you will have to pay VAT. For example, if you are engaged in manufacturing and selling in Belgium, VAT will not be charged. If you produce in Russia and sell in Belgium, you will have to pay.
- Corporate property tax. An enterprise can own real estate in other regions, but then it must pay taxes, both in the Russian Federation and abroad. To avoid double taxation, international agreements work. Their essence is that the amounts paid abroad are deducted from those accrued in the Russian Federation.
Registering a company abroad is not an easy process. You need to know many nuances and legislation of countries. Therefore, many people apply