There can be different scenarios and situations when you may need to register a foreign company abroad. The choice may vary largely, depending on the tasks and the specifics of activities, as well as on the size of business, area of core activities, countries where there are foreign partners, necessary banking services, and personal preferences.
The country’s reputation and its time zone are also very important criteria. If for example, you choose a jurisdiction for company incorporation abroad, which will result questions of your partners and banks, all the advantages may disappear. Another possible scenario: you need to work actively with your company that is opened abroad, but there is a significant time difference, and you just cannot act in time.
Thus, you should consider all the factors when registering a company abroad. Opening a company abroad provides not only a possibility to reduce the tax burden, but also a whole range of other advantages, including strong reputation, convenient access to the international markets, business expansion, etc.
When choosing a jurisdiction for registering a company abroad, it is necessary to make a list of the tasks and conditions, which must be permitted to perform by the foreign company, and only then to choose a jurisdiction. Each country has its specifics, and conditions of one country that are perfectly tailored to one set of tasks may be not suitable for other tasks.
Here is a list of possible scenarios when it may be necessary to open a company abroad:
- Optimisation of taxes and customs duties;
- Obtaining a residence permit for a shareholder and his family via a company;
- Working with foreign partners;
- Protection of business and know-how, holding of different rights;
- Work via foreign banks;
- Holding — owning and managing real estate and other foreign assets;
- Costs optimisation – energy, labour, components, transportation, etc.;
- Specifics of business makes registration of company abroad necessary:
- Partner terms;
- License features;
- Participating in a tender abroad;
- Joint venture;
- Other conditions.
- Registering a merchant fleet in the name of a company abroad;
- Requirement for international funding;
- Transferring a part of business abroad;
- Expanding business abroad – purchasing an existing business or opening a new one.
As you can see, there can be numerous circumstances when registration of a company abroad is necessary. The purpose of tax optimisation is not always the major one. However, if it is possible to combine other tasks with the reduction of the tax and optimisation of other costs, this solution is the most attractive one.
Overall trends and popular countries for opening companies abroad
Until recently, classic offshore companies in Seychelles, Belize, the BVI, Panama, etc. were considered one of the most popular solutions for registering a company abroad. Such companies were not expensive in terms of registration and maintenance, did not require financial reporting and were considered a simple and convenient solution if combined with a bank account, for example, in Cyprus.
There have been significant changes over the last few years, and this type of foreign companies has become practically inappropriate for carrying on business. This is due to the two main factors: a) putting offshore jurisdictions on the black lists; b) significantly complicated conditions for opening bank accounts for companies of this type and further work with them.
For this reason, business people start considering other options. The foreign companies registered in the United Arab Emirates, being one of the best options, have rationally become the most popular ones. The country is attractive due to the entire set of benefits. Firstly, it is allowed to open both offshore and onshore foreign companies. Both types of foreign companies are exempted from taxation (for details see next paragraph). Secondly, such foreign companies may open bank accounts in the UAE, which are characterised by a business-oriented approach, quality service and more than reasonable prices for services. Thirdly, the foreign companies registered in the UAE can be owned and managed by foreigners. Fourthly – the UAE is the extremely reliable and recognised international jurisdiction with a wide net of double taxation treaties.
Registering a company abroad: banking services
No company can operate successfully without reliable and convenient banking servicing. For this reason, the question of opening a bank account is extremely important. As it was mentioned above, opening bank accounts for the previously popular classic offshore foreign companies registered in Seychelles, Panama, Belize, etc. has become a challenging task.
Foreign companies registered in the UAE, on the contrary, have no difficulties regarding bank service. The UAE banking sector is highly developed and is relaxed for working with various types of businesses.
As a result, the UAE is the perfect combination. There is a possibility to open foreign companies of different types (offshore and onshore), favourable tax regime, company documents and banking are available in English, time zone, easiness of access, the country’s being focused on the business and protection of the interests of foreign businesspeople as well as a favourable legal framework.
Taxation when working through foreign companies opened in the UAE
The UAE tax system has its uniqueness – all the companies registered in the United Arab Emirates (both offshores and onshores) are fully exempted from income tax, withholding tax and tax on dividends. For more information, see a detailed overview of the UAE tax system prepared by our experts.
Advantages of registering a company abroad
As it was already mentioned in our overview, the company abroad is not only a possibility of tax optimisation, but also a whole set of advantages and opportunities. The main task is to choose a right jurisdiction. The UAE is the jurisdiction that is worth considering.
The process of opening a new company in the UAE is quite simple and quick. Our company provides full assistance at all stages, and, therefore, you can become a foreign company owner with minimal time expenditures from your side. While registering companies we provide:
- Selection of the optimal company form;
- Preparation of all the documents for company registration;
- Registering a company itself;
- Opening bank accounts;
- Getting residence permits for shareholders and members of their families;
- Getting tax residency certificates;
- Annual administrative servicing of a company.
Please, e-mail or call us to get more detailed information regarding the registration of companies abroad. Our professional consultants will give you the answers all your questions. We have been working in the UAE for a very long time, and we know all the specifics of the country first-hand.