Any project or startup in the field of international business can achieve considerable development and international success. Area of information technologies is most clearly characterized by the possibility of international development and, respectively, it requires a responsible approach from the very beginning of the implementation of the project. That's why establishment of a successful virtual business model requires using various solutions and tools, which are also used in traditional business.
IT company: local or international
When starting a new IT project, the entrepreneur must understand that in order to carry on business one must register the appropriate company with observation of the corporate norms of the current legislation. This approach is dictated by the peculiarities of carrying on business in a given market niche. Moreover, a large business structure may comprise not just one legal entity, and it may be several companies, including international ones. One part of the registered companies can be used as the main element and the other part can perform support functions.
For the entrepreneurs, in the beginning it will be enough to own one IT company which will be registered and entered in the companies registry. For example, if you intend to open an online store – it can be a regular local company registered in your country. However, if your business involves international participation, both from clients and investors, it is better to think about registering an international IT company. Besides, an international company can be used for optimization of the business processes and taxable base.
Classification and organizational forms of IT companies
Speaking about the classification of this type of companies, one can single out several basic categories, in particular:
Basic IT company
This organizational form is designated to provide core business. Bank accounts are opened on the name of this legal person, and the official flow of documents is also maintained on its behalf. For example, if your business organization involves the sale of software products on a dedicated website, where all the payment transactions are carried out via credit cards, it is better to register an international IT company. Such a company can be registered in one of the offshore jurisdictions, what will ensure not only the confidentiality of the information, but also tax benefits. In other words, if your business is 100% virtual, it will be enough to register an offshore IT company.
Special purpose IT company
Such companies are used in the international business structures for the optimization of the various business processes and have defined goals. For example, a business organization provides the delivery of the various goods from abroad and their subsequent selling. If you are working with multiple suppliers, it will be wiser to register a specialized target company, which will work with all your foreign suppliers. So you will be able not only to accumulate the income effectively, but also to reduce expenditure on logistics significantly and to optimize taxation.
There is a variety of target IT companies in modern practice, but the majority is created for settling payments with the foreign counterparties.
Holding IT formations
Holding formations or IT companies are created for the effective business management and accumulation of the gained incomes in one place. Typically, the holding company is the result of a long and fruitful activity of the basic and target companies. Holding structure is appropriate for the rather large-scale and successfully-operating mechanism. Holding IT companies are mostly registered in the prestigious jurisdictions and are designed to perform several important functions.
The jurisdiction of the United Arab Emirates can serve as a the good example. Although this country is not an offshore zone in its traditional understanding, the most favorable tax climate is created here for business. It is a really tax-free haven for international companies including IT companies. The current corporate law in the UAE fully excludes such concepts as:
- Corporate taxation of the international companies;
- Taxes on the interest on loans and received dividends;
- Taxation of royalties and similar payments.
Moreover, offshore companies, on the territory of the specialized free trade zones can count on customs exemptions and maximum assistance of the state agencies. It should be noted that such possibilities in the area of information technologies allows increasing significantly the profits of the company via optimization of the costs factors.
It is important to understand, that in order to register an IT company it is necessary to decide what are the goals of a business, and what are the corporate features of the jurisdiction where your business will obtain the registration address. It is quite difficult for the domestic entrepreneurs to gain an understanding of the rules of the law of the foreign countries and to make the right choice of an offshore jurisdiction. Experts recommend taking the help of qualified professionals – so you will save yourself from the mistakes and faults due to the unfamiliarity with the local laws.
Choice of the optimal offshore jurisdiction
As to the choice of a suitable offshore jurisdiction, it is necessary to consider the whole set of parameters and characteristics of the country where you plan to register your business. One can single out among them the most important and key parameters, these are:
- Principles and procedures for the state taxation;
- Confidentiality of information about the owners of the business and the availability of public registers of legal entities to third parties;
- General political and economic situation in the region;
- Prestige of jurisdiction in the international arena;
- Geography of the potential business;
- Methods of settlements and delivery of goods.
If to speak specifically about IT companies, it is important to consider the peculiarities of local legislation in this sector, because there is no unified international practice.
If you intend to work with foreign counterparties or to involve foreign investors into your projects, it is better to take care of the prestige of the chosen jurisdiction. It is not a secret that a lot of major companies are reluctant to work with the companies which are registered in jurisdictions that are in the "black lists" of international anti-offshore organizations.
If you are interested in the opportunity of registering an IT company in the prestigious tax-free haven and in the expansion of the existing business, the team of the qualified professionals, which possesses years of experience in the international market, is available at your services. Contact our experts today and get legal consultation absolutely for free. You can be sure that we have all the necessary resources, knowledge and experience to assist you.