Starting an international company can be easy or difficult, depending on what type of business you intend to engage in and which countries you intend to do business with. You will need to establish a home office, and in most cases you will need to establish an international presence by either establishing an overseas corporate subsidiary or opening an offshore representative office. The basic framework for establishing an international company is more or less the same for any business.
Establish your business's corporate headquarters. If you want to establish it in the United States, be aware that corporations are subject to state law, and the corporate laws of some states are more favorable than others. Delaware is generally considered to have to most favorable corporate legal structure.
Incorporate your parent company. You will need to draw up an Articles of Incorporation (usually one page), issue shares, appoint corporate officers and a board of directors, establish a registered address, appoint a registered agent and pay a filing fee. The Articles of Incorporation should be filed with the secretary of state in the state in which you intend to incorporate.
Draft corporate bylaws for the parent company. Corporate bylaws do not need to be filed with the secretary of state but could become important in the event of a legal dispute, because they function as a corporate constitution. If you intend to establish subsidiaries, make sure to specify whether the board of directors or the shareholders must approve resolutions involving subsidiaries.
Determine your major overseas markets or suppliers and research the business laws of these jurisdictions. Many countries offer generous tax breaks and other incentives to foreign investors. You will also need to determine how difficult the bureaucracy is to navigate, especially if you plan to establish subsidiaries and overseas offices.
Establish a business presence in your target jurisdictions. One way is to establish corporate subsidiaries under foreign law, although many countries require a majority local ownership of any company established under their laws. If you intend only to source materials or search for customers, you may wish to establish a representative office. A representative office is treated as a branch office (not a subsidiary) of the parent company and may not sign contracts or earn income.
Establish your overseas subsidiaries or representative offices and hire local employees with good business contacts. Make sure that the parent company is in effective control of its overseas entities (by appointing each member of the board of directors, for example).
Hire international accounting and legal specialists to help you reconcile the tax and accounting obligations of your overseas entities with those of the parent company.
- Do not form your parent company as a Limited Liability Company (LLC) if you intend to establish overseas subsidiaries, because some countries do not recognize this form of business organization.
- Some countries require foreign corporate promoters to retain the services of a local lawyer, through which all corporate formation documents must be submitted.
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