Process
1
Tax analysis:
- Tax obligations. It is necessary to calculate in advance the amount of tax obligations for income tax and VAT. In this case, it is necessary to take into account the corporate structure, the scope of the company’s activities, and the markets in which the company will operate.
In addition, it is necessary to take into account the withholding tax on dividends when paid to non-residents, and the withholding tax on royalties if royalty payments are planned in favor of an affiliate.
Example. The user (or publisher) is located in the USA. When paying from the USA to the UAE, the WHT rate is 30%. For transactions to a country other than the UAE, this tax rate may be lower if the United States has entered into a double tax treaty with that country. For example, if the developer is a tax resident of Cyprus and the publisher is a U.S. tax resident, the publisher is required to withhold U.S. withholding tax at 0%.
- Mandatory payments for employees to the budget. The amount of personal income tax paid by the employer, social contributions. These expenses significantly increase the budget for maintaining the company. In addition, in some states it is mandatory to hire local workers to open a company. For example, in San Marino or Qatar.
- Risks of double taxation. Not all states have ratified double tax treaties with other states. For example, the US does not have such an agreement with the UAE, Saudi Arabia and Brazil. The absence of an agreement can become a problem: for example, an individual or legal entity can become a tax resident of two states at once and pay taxes to both budgets.
2
Legal analysis:
- Legal landscape. Legal requirements vary significantly in all countries. Therefore, somewhere it is more convenient to engage in risky types of business (gambling, forex, cryptocurrencies), somewhere the regulation of corporate issues is well developed (for example, the state of Delaware, USA). Therefore, when choosing a specific country, it is also necessary to focus on the existing regulation in relation to the company’s field of activity.
- Difficulty opening a bank account. Bank compliance services very carefully check information about the company, directors and beneficiaries. An offline interview with a bank manager is often required to successfully open an account. Many reputable banks do not open accounts for companies from offshore jurisdictions.
If you plan to create a business in Europe or the UK, it is necessary to consider each jurisdiction in detail since not in all countries, banks open accounts for companies whose participants do not include residents of these countries. For example, in the Netherlands, banks do not open accounts for companies whose members do not have Dutch residents.Additionally, some banks require you to make a minimum deposit to open an account, while others require you to pay a fee. For example, in EMIRATES NBD bank the optimal deposit amount is from 200,000 AED.
- Cost of maintaining a company. It differs significantly from country to country. In some cases, the higher cost of maintenance is offset by less stringent regulation or lower taxes.
- Possibility of remote management. Some jurisdictions encourage and encourage remote communication, both internally and with government agencies. For example, Estonia has an electronic residence system (E-Residency). It allows entrepreneurs to remotely register and manage a company, submit reports and interact with government authorities from anywhere in the world. Presence in Estonia is not necessary for this.
3
Incorporation planning:
Once we complete the legal and tax analysis, understand the risks and how to address them, we can determine the country for incorporation and prepare an action plan.
4
Company registration support:
We will prepare the necessary package of documents and accompany the registration process. We will take care of all communication with governmental and non-governmental regulators in order to successfully incorporate your business.
5
Support for opening a bank account:
- We will help you collect the necessary documents to open an account. There is no universal package of documents that all foreign banks require. Accordingly, there is no universal way to open bank accounts abroad. The work of opening an account is adjusted to the requirements and conditions of a particular bank, which was selected according to the parameters of the activities of a particular company.
- We will accompany you through the compliance and KYC procedures.
- We will arrange a meeting with the bank manager and prepare you for the interview. Most reputable banks, as well as banks from specific countries (for example, Singapore, USA or UAE) invite company representatives for an in-person interview. Both the beneficiaries of the company and the directors can be invited to attend. Even if the bank does not initially require personal attendance, the bank manager can still schedule an interview if the compliance team has doubts about the documents provided, the source of the income, or has additional questions.
An alternative to a bank account in a traditional bank is an account in a payment system that operates under an Electronic Money Institution (EMI) license.
