Structuring a Business: Tips and Tricks

In providing services to our clients, we are often faced with issues such as:

Obviously, without special knowledge and practical experience in a certain type of activity, it is very difficult to find answers to these and many other questions that are critical for starting of international business.

Launching international projects is a long process, which necessarily includes such steps as: drawing up a business plan, marketing market research, setting goals, selecting the right specialists for the staff and many others.

The success of the project depends to a large extent on a correctly jurisdiction and well-planned corporate structure. Each country and the economic zone within the country has its own individual legal aspects of business registration and management, as well as the subtlety of obtaining permits for specific activities.

What aspects should be taken into account when structuring a business?

Country (jurisdiction) of registration

The main factors taken into account in the selection of the country are the geographical location of the jurisdiction you have chosen to conduct the business, the location of future customers, the geographical position in the form of natural/technological resources or key contractors, as well as the reputation of a particular jurisdiction.

Qualified advice of a competent expert will include the clues concerning the regulatory framework of the business, notably:

Business entity types

The form of company registration often has a decisive influence on the business, creating prerequisites or, conversely, hindering further development.

The form of a company may affect its prestige to partners, public authorities and financial institutions. It may also determine taxation, impose additional requirements in the form of a mandatory audit or periodic general meetings of company owners.

Sometimes the law imposes rather strict requirements on the form of company registration, limiting the options to one or more options.

Failure to comply with these requirements leads to the inability to obtain a license for a certain type of activity or to carry out certain operations.

Availability of partners/co-owners of the company

A specialized expert can provide invaluable assistance by providing information on whether partners, including local partners, whether their presence is a prerequisite for registering a company.

It is also important to understand whether partners can be individuals or legal entities, as well as what are the requirements about the country of their residence/registration.

Properly prepared statutory documents

Starting own business from scratch, owners often do not take into account the impact of the charter, founding agreement or other statutory documents on their company.

For example, in the case of the provision of standard statutory documents to the bank, the bank managers will have quite logical suspicions that they are dealing with a one-day company or suspicious activity, the details of which are not disclosed due to the incomplete transparency of operations/capital, which, in turn, reduce the chances of opening an account.

It is also difficult to overestimate the importance of well-prepared statutory documents for the efficient management of the company, key decisions making, quickly responding to changing market and business environment requirements.

The procedure of making authorized capital contribution/availability of funds for certain types of activities

It is important to know that the legislation in some countries dictates mandatory requirements for the size and procedure of the authorized capital formation. Options may vary from the formal requirement of $ 1 to the need to make a deposit of $ 500 000.

At the same time, there are also options for the necessary accumulation of resources for obtaining a license/maintaining its validity. Understanding these conditions at the beginning of the process allows you to properly prepare resources and, accordingly, reduce project costs.

Availability of local director, staff and office

There is no secret that maintenance of a company requires administrative expenses, which can significantly vary depending on the country and the size of the business.

Our experts can provide you with a professional advice on the minimum necessary requirements for registering a business.

Conclusion

All the above-mentioned factors lead to the logical conclusion, that when a business is properly structured, the simplistic approach «accepted the order - executed the order», as well as the work on the principle of «everything fits» are unacceptable.

Each client and its purpose is a new case, that can be successful, if the law firm can provide an individual approach and is willing to provide information, as well as to interact with the client based on its goals and requirements.

For the proper planning of international business, our qualified specialists will assist you in drawing up an action plan to achieve maximum results, including the following: