Top five things to consider when moving your company HQ abroad

Whether it is for tax reasons, reduced set-up costs or otherwise, here is some guidance for those who seek to move their base overseas.

Whether it is for tax reasons, reduced set-up costs or otherwise, here is some guidance for those who seek to move their base overseas.

If you are moving your company headquarters abroad, you’ll be facing some potentially difficult decisions. Where should I move my company to? How will I run the business once it is there? How can I seek professional advice to cover tax, accountancy and legalities? The list is quite exhaustive. However, with careful planning and market research, this move can be the start of a path of real investment for your company.

Many companies choose to move their company headquarters abroad, particular if they are residents of the UK and Europe where tax on capital gains and income tax is notoriously high. Moving a company’s tax base outside the country can provide a variety of benefits for a business, especially in terms of fewer tax obligations and reduced set-up costs. But equally, legal structures vary from one offshore jurisdiction to another and for this reason you should seek specialist advice from professionals during the process.

Here are our top five things to consider when moving your company headquarters abroad:

1. Business plan

Before doing anything towards moving your company headquarters abroad, it is crucial to put a comprehensive business plan together that covers aims, goals, costs and a structure. Planning the details of your move can provide a good idea of how much the process will cost especially in terms of operations and start-up costs.

A good business plan will have an executive summary detailing an overview of the business – especially if this is a new company. For those following the corporate migration path where at least part of the company operations will be move abroad then a sales and marketing plan should also be put in the business plan to establish how your business intends to target the foreign market.

Every business plan should detail operations with all costs and logistics factored in and a financial forecast that details where you anticipate your business to be in terms of profit for at least the first six months, preferably for 12 months.

2. Incorporation

There are many offshore jurisdictions to choose from when considering moving your company headquarters abroad. Jurisdictions such as Hong Kong and the British Virgin Islands can offer an excellent business environment to operate in with completely legal tax benefits. There are many different benefits available for you if you choose to set up or move your business abroad, but different jurisdictions have diverse plus points and it’s key to find out the particular benefits of an offshore jurisdiction before embarking on incorporation.

Once you have chosen where you’ll move your company headquarters, you’ll want to find a reputable offshore company formation agent to incorporate your company. It’s possible to incorporate your company online for most jurisdictions and this can be done in a few days or even less depending on the agent and due diligence.

You’ll register a company name and sending the right documentation – many online incorporation agents have a name checking service available so you can determine whether your proposed company name is available.

3. Finance

Ideally you’ll have a good length of notice before moving to allow you to fully comprehend what you need to organise. But one thing that will be clear for any business owner looking to move their headquarters abroad is the rules and regulations that govern the jurisdiction you will be moving to. Tax laws vary from country to country and you’ll need to seek professional advice on any regulations that may affect your business before you go. Some offshore company formation agents have professional partnerships with chartered accountants who are experts in tax and legal requirements for the jurisdictions in their portfolio. This is useful if you are looking to incorporate your company in an offshore jurisdictions since you can gain access to a chartered accountant with this knowledge and the first consultation is complimentary.

One key thing to consider when looking to relocate your company headquarters abroad is banking. Even if you are moving abroad with your business, it’s usually a good idea to keep your UK bank open in the UK but explain to your bank that you are emigrating abroad. Obviously you’ll need to open an offshore bank account in the country that your business is moving to and in some jurisdictions it’s essential that you have an active bank account in that country in order to incorporate your company there.

There are cheaper, easier ways to move money across borders that don’t involve opening an offshore bank account. Research the different options available for how to move money from one bank account to another. It can be costly, so it’s definitely worth looking into fees you could be charged and what the exchange rate is. Consider alternative providers as well – fintech companies now specialise in international money transfer and could save you a substantial amount on fees.. For example, providers like TransferWise are focused on helping businesses save when they send and receive international payments.

They always convert money at the mid-market exchange rate and charge just one small, upfront fee on the value of the transfer. This makes them up to 8 times cheaper than banks, who typically give unfavourable exchange rates on top of any foreign transaction fees. This could really help cut on costs when moving your company overseas. Their free multi-currency account also comes with international account details for the US, Eurozone, UK, and Australia. This means you can easily open up international account details without needing to leave the country and it could act as an alternative or supplement to a main offshore bank account.

4. Market research

One key thing to do when you have decided that moving your company headquarters abroad is to shop around for packages and products. There are many company formation agents, chartered accountants and offshore banks to choose from and it’s absolutely essential that you compare them carefully to ensure that your company is set up in a legitimate and cost-effective way.

For example, in terms of offshore banks there are some fundamental differences in the packages offered that you will need to understand and consider. Some offshore banks require personal visits to the bank itself to set up your account, whereas others may require an initial deposit to secure the account.

The actual price of setting up your offshore account will vary too, as will the timescales for set up so it is well worth comparing offshore bank accounts in advance of moving your company headquarters. Remember that all good service providers will have an effective contact system where you can ring them for advice and this is certainly recommended so that you know exactly what is required of you in advance.

5. Legal

There are ways of legally structuring your company abroad so that it is 100 per cent legitimate. One of the first things that you may wish to do is to speak to an accountant or tax specialist to see if your business plan is viable. This will enable you to make suitable amends if there are any logistical issues with your business plan or your tax position.

When selecting an offshore company formation agent to set up your company, you’ll find that there are many options to choose from and it’s vital that you choose a reputable company such as Offshore Formations 24.7. An agent may help you with other aspects of your business that require legal consultation such as nominee director services and administration. It can help immensely to have these things tied up in one package since the company formation agent will know all about your case from the outset.

Further reading on trading internationally

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