Whether you are planning to expand your business overseas, or looking to start a new venture in the foreign land, what you need to consider first and foremost is the legal aspect, i.e. the rules and regulations governing the business setup and operations. Knowing the rules and regulations is the only way to avoid legal troubles in the future.
Well, it is important for foreign entrepreneurs to know and follow the local business laws, but opening a company in a foreign country doesn’t have to be difficult, considering many countries impose similar requirements to local and foreign enterprises. You can decide for a regular type of business, such as a shop or restaurant, or you can choose to start an investment fund, which is more demanding in terms of legal requirements and money, but the requirements for you as an owner will be the same.
Speaking of requirements, let’s see what you will need from a legal point of view when starting a company in another country.
1- Residency requirements for starting a business in another country
There are countries which require a residence visa, if not for the owner of the company, for the company director or directors. A local representative can also be nominated because it is the cheapest and simplest option instead of transferring someone there. If you want to form a company in Cyprus, for instance, a resident could be an option as the workforce there is quite cheap.
2- Requisites in terms of documentation required to set up a company
The most important phase and longest for starting a business in another country will be to prepare the documents which must be submitted with the authorities. For those who want to start a business in an European country the documentation is minimal and implies:
- translating and notarizing your passport;
- drafting and notarizing the company’s documents which are usually known as Articles of Association;
- having a business address in that country.
You will also be asked to fill out some forms issued by the authorities there. To simplify things, you can ask for professional services. In Germany, for example, you can ask for a German law firm’s help.
3- Post-registration requirements
Once the company is registered with the Companies Register, there are a few more steps to take before starting doing business. These steps are registering with the tax authorities in the respective country where your company will obtain tax identification and VAT numbers and to register the employees, including the directors, for social security, healthcare and pension purposes. Speaking of these, you can use a tax calculator to check the costs generated with hiring employees in a country.
The Bottom Line:
Setting up a business in another country is not difficult if you get all the facts straight before starting the registration procedure. Conducting a thorough research into your target market and executing your launch strategy in accordance with the local laws properly is the only way for an impressive market entry.
Requesting for help is a viable solution if your business idea is more pretentious, and so you won’t face any difficulties when you get started. Consulting a legal expert with experience in establishing new companies in the country of your choice can save your time and money.