Guides to Foreign Companies

What happens after incorporation

Incorporation takes weeks, while owning a company lasts for years. The guides in this section describe the obligations an owner takes on after receiving the certificate: annual fees and reports, bookkeeping, beneficial ownership disclosure, the bank's review, tax residence and the CFC rules of the owner's country.

Topics in this section

Choice and budget. The guide to choosing a country takes you through seven filters: who pays the company, where the owner lives, which bank will accept it, which obligations will follow, whether substance is needed, what ownership costs over two years and what happens as the business grows. The total cost calculation separates one-off and recurring costs over 24 months.

The owner's taxes. CFC rules allow the owner's country to tax the undistributed profit of a foreign company. The tax residence of the company itself is determined by the place of incorporation and the place of effective management. Economic substance rules are covered separately: in the BVI they have applied since 1 January 2019 and concern only "relevant" activities.

Bank and payments. Incorporating a company and opening an account are two independent procedures. The guides to accounts, KYC and KYB, EMIs and acquiring explain what the bank checks, how money is protected at an EMI and at a bank, and why the country for online sales is chosen with the payment provider in mind: the BVI, Seychelles and Belize are absent from Stripe's list of countries.

Disclosure and checks. A beneficial owner is the individual who ultimately owns or controls the company, including through a chain of companies and agreements. The agent, the bank and the payment provider receive information about this person, so the KYC package with the source of funds is worth preparing before documents go to the bank.

Structures. Holding companies, trading companies and asset protection: when a separate legal entity is justified, how much tax will be withheld on dividends, how the route of the goods affects an intermediary's taxes and why an asset protection structure is set up in advance.

Annual maintenance. A calendar of obligations by country, bookkeeping and audit. In the BVI, accounting records are kept for five years and the annual financial return goes to the agent; in Hong Kong, form NAR1 is filed every year.

Where to start

If you do not have a company yet, start with choosing a country and the total cost of ownership. If the company is already running, check the annual maintenance calendar and how the tax authorities of the owner's country see it.

Practical guides

• Accounting and audit: when they are required

  Bookkeeping and reporting in the BVI, Hong Kong and the UK: where a report to the agent is enough and where an audit is required.

• Bank account: passing the review

  Seven steps to prepare for the bank's review: the transaction profile, source of funds and source of wealth, and a plan in case of refusal.

• CFC rules: what the owner needs to know

  Control thresholds under the ATAD in the EU, in Russia and Canada, notifications and deadlines: what the owner does on their side.

• Economic substance: who needs it

  Nine activities under BVI law, the test for holding companies, the FSIE regime in Hong Kong and the repeal of the separate ESR rules in the UAE.

• EMI vs bank: what is the difference

  How the balance is protected at an EMI and at a bank, what safeguarding is and which provider suits an offshore company.

• How to choose a country: 7 filters

  Seven filters for choosing a country: from who pays the company to the two-year budget and plans for a sale.

• International holding: dividends and choice of country

  When a holding company is justified, how much tax is withheld on dividends, how the EU Parent-Subsidiary Directive works and how to move shares.

• International trade: imports and exports

  Roles in the supply chain, EORI, VAT on parcels and the intermediary's tax: structuring a trading company from the route of the goods.

• KYC and KYB: which documents to prepare

  The package of documents on the company, its beneficial owners and the source of funds for a bank, an EMI and a payment provider under FATF standards.

• Offshore asset protection

  What a separate company gives, where protection ends and how to build the structure lawfully and in advance.

• Offshore company annual maintenance by country

  A calendar of obligations by jurisdiction, the maintenance budget and the example of a holding company that "slept" for two years.

• Offshore company cost: 24 months of expenses

  Five lines of a 24-month estimate: state fees, the agent and secretary, bookkeeping, the bank, licences and staff.

• Payments: Stripe, PSPs and acquiring

  Where Stripe is available, which industries are restricted, how reserves and chargebacks work and what SCA means for buyers from Europe.

• Tax residency: place of management and control

  The place of incorporation and the place of effective management: how dual residence arises and which facts tax authorities check.

• UBO disclosure: who sees the data

  Who counts as a beneficial owner through chains and agreements, which registers the EU, the UK, Hong Kong, the BVI and the US keep, and who sees the data.