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Change of Jurisdiction for Business Optimization or Why Do Companies Move Overseas

Change of Jurisdiction for Business Optimization or Why Do Companies Move Overseas

The globalization of markets and the growth of trade and other types of business between countries and regions is growing and will continue to grow in the future. In order for a business to stay in the course, it is necessary to ensure its maximum optimization in order to gain advantages over competitors, including the competitors from abroad.

One of the ways to improve the efficiency of an enterprise is to optimize its business processes. Operation efficiency is evaluated as the ratio of the result to the effort spent. Optimization of business processes is a set of actions aimed at increasing the overall efficiency of business.

Optimization of company logistics is another issue to be resolved as part of the struggle to increase competitiveness. This procedure involves finding, evaluating, selecting, and implementing improvements in purchasing, transportation, warehousing, planning, distribution, and service systems to achieve maximum effect at minimum cost.

We should also mention the optimization of taxation, the essence of which is a legal lessening of tax liabilities (not tax evasion) of an enterprise, based on the use of the opportunities provided in the area of business restructuring and tax legislation. Carrying out this process will be relevant both during the creation of a business and at any stage of company operation since this will make it possible to use the business profits for further investments and growth.

One of the possible solutions to all the optimization difficulties mentioned above is the transfer of a company to another jurisdiction or opening a branch/subsidiary in another country. Let's take a closer look at how to change jurisdiction in order to optimize business processes, tax and optimize the entire business flow and efficiency.

Moving/ transferring to offshore / abroad

So, let's consider how to optimize business, by moving assets to an offshore (foreign) jurisdiction. There are quite a few different places and regions in the world with reduced or even zero income tax rates and other preferences, for example, Malta, Cyprus, etc. Here we consider the issue of business optimization on the example of the UAE. Why UAE? Firstly, there is an opportunity to create an onshore company in one of the free zones and enjoy a tax-free environment, and secondly the UAE, unlike most other foreign jurisdictions, is not included in the blacklists of countries with which governments, banks, and other organizations of a number of western countries do not want to cooperate. That is, on the one hand, you get the possibility of tax optimization, and on the other hand – guarantees of safe business and good prospects.

In the UAE free zones, a foreign investor can either open a new company with the same name as of the parent one or open a branch of a company. In the first case, it will be a separate legal entity owned by a foreign investor, and in the second one – a structural unit in another jurisdiction. In each case, you get access to regional markets and the ability to conduct business in an efficient way.

Some jurisdictions provide procedure as redomiciliation. There is no option to conduct such a process for onshore companies in the UAE, but one has so many opportunities to register a business in different forms that this is not a noteworthy drawback. Thus, when you consider the option to change jurisdiction, the UAE is certainly the place to consider.

If you have any questions regarding business registration in the UAE free zones, feel free to write to us, we will be happy to provide you with professional consulting assistance.

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