If you’re planning on expanding your business internationally, one of the first things you’re probably considering is whether your offerings are commercially viable in certain foreign jurisdictions. Other macro-economic factors such as the political or business climate, legal environment and resource availability in said jurisdictions should also spring to mind.
But dealing with the complexities involved in corporate filings and compliance requirements can be difficult to take on. And if you’re expanding across international waters, this is probably the last thing you want to worry about.
When a business is ready to move forward with the incorporation or registration of their company in a new jurisdiction, they’re likely to encounter unique challenges they haven’t yet faced in their own local jurisdiction. Once a business has established multiple foreign subsidiaries, the obstacles or challenges they face tend to increase. It’s an ongoing annual assignment to keep the portfolio active and in good standing.
Additionally, it’s common for businesses to lack the staff or resources on hand to manage the range of unique requirements in various jurisdictions. Bringing on an external partner that specialises in international subsidiary management services and that has access to corporate registries can help you maintain the health of the portfolio.
Addressing the Complexities of Your Global Expansion
Once you’ve consulted with legal and tax experts to prepare a business plan for international expansions, here are some practical matters you should consider before embarking on a foreign incorporation or registration:
- Determine what the lead time is to complete the incorporation/registration process in your new jurisdiction.
- Understand how the corporate filing system works in the new country and whether it’s a civil or common law jurisdiction.
- Work out if you need an incorporation agent or a registered agent to submit your filing.
- Consider if you need a domiciliation (registered office) address in the country to incorporate.
- Decide whether you need to appoint a company secretary to handle administrative matters.
- Research whether or not you need residential directors in the jurisdiction of incorporation.
- Determine the supporting documents that are required to submit the filing, and whether these documents will need to be legalised for use in the new jurisdiction.
- Once incorporated in the new jurisdiction, find out what information about your company will be publicly available.
- Inquire about the ‘Know-Your-Client’ requirements of your selected registered agent or incorporation agent.
It’s often best to have a corporate service provider on the ground where your business is conducted to act as your incorporation agent. They’ll be familiar with the regulatory environment and will have the jurisdictional knowledge to help you navigate all requirements and get you set up as quickly as possible.
Remember: once your company is incorporated (and before you start trading or operating), make sure you’ve covered any other compliance implications with your counsel. For instance, this could mean registering with the tax authorities or other regulatory agencies that oversee your business.
What is Involved in International Subsidiary Management?
Once you’ve set up your international subsidiaries, and in order to trade legally, it’s important to ensure that these companies are compliant with the local corporate laws to remain in good standing.
You don’t have to do this alone. A trusted corporate service provider with international capabilities will be able to work with you to manage regular compliance requirements.
Here are 3 key requirements to keep in mind when managing your international portfolio of companies:
1. Registered Office
Most international jurisdictions will require your company to have a local registered office or address in their country. A registered office is responsible for receiving and responding to mail from tax authorities, notices from your company registry, tax information and compliance communications.
If you don’t have a physical address, you could use the address of your corporate service provider in the jurisdiction as the registered office. When a service provider acts as your registered office, they’ll have the systems in place to receive, record and forward documents to the right contacts within your company (which are refreshed and kept up-to-date every year). In many jurisdictions, your registered office will also be required to house your company’s statutory registers and minutes.
One thing to keep in mind: It may not be possible to use this address for regular business correspondence unless a separate mail forwarding arrangement has been put in place with your service provider. Normally, a registered office is specifically used for statutory requirements.
2. Company Secretary
In many common law jurisdictions, the position of a company secretary is mandated in their corporate law. However, in civil law countries, this term is often unknown. Nevertheless, each company is responsible to comply with the corporate laws of their respective countries. Your corporate service provider could be your trustworthy partner and may even be able to act as your named Company Secretary.
What is the role of a company secretary?
- To file and update the Companies Registry should there be any key changes to the directorship or constitution of your company
- To act as a liaison between the registry and your company
- To record the corporate actions taken by your company (i.e. approved minutes)
- To keep the statutory registers of your company regularly updated
3. Annual and Event-Based Compliance
Annual compliance requirements differ greatly between jurisdictions. If you have subsidiaries in multiple jurisdictions, it can be a difficult task to keep track of these deadlines. This is where your service provider steps in to help. Not only would they be able to send you timely reminders, but in some cases, they might also be able to submit filings on your behalf.
Many jurisdictions will also require you to file or report changes and corporate actions made by the company within a certain time frame. Your service provider is often a useful resource available to help you navigate these compliance requirements. Just remember to notify them of any material changes in your organisation.
If you need help expanding your company into multiple jurisdictions and managing your international subsidiaries, contact us today. With our worldwide network, we can ensure you get the international business compliance you require.
This article is provided for informational purposes only and should not be considered, or relied upon, as legal advice.
