What to Consider When Expanding Outside the U.S.
great benefits & great risks
Establishing a subsidiary outside the U.S. presents tremendous opportunities and benefits. Succeeding in global markets requires significant time, energy and resources on the part of business owners and decision-makers. We’ve seen the impact of businesses getting caught up in the excitement of a new expansion without having the safeguards in place to prevent costly missteps. Before expanding globally, let’s talk. We’ve guided others like you through international expansion and can provide valuable advice.
Here are some questions to be answered:
- What type of investments can be made in the jurisdiction?
- Can foreign investors make the investment, or is a national of the country they are investing in required to be part of the venture?
- Are there minimum capital requirements to establish a subsidiary?
- Can money be loaned to the new subsidiary?
- Does this jurisdiction have monetary controls?
- How do I get money in?
- How do I get money out?
- What requirements are there for creating an entity?
- Are there limitations on what my business can do?
- What type of license(s) are needed?
- How long does the process take?
- When can a bank account be opened?
- What responsibilities does a corporate officer or agent have?
- What taxes will my business be subject to?
- Is an audit required?
- Who will advise me on income tax, employment tax, value-added tax, and other taxes encountered?
- Do I have to withhold taxes on payments?
- What types of transfer pricing rules exist?
- Are there any payments that aren’t deductible?
- What types of payments to employees are mandatory?
- What are the severance rules?
- Can I fire an employee?
- Do I need an employment contract with some or all employees?
- What are the books and records requirements?
- What types of accounting methods and periods are available?
- What happens if I have to pull out?
- Can I send U.S. employees to work cross-border?
- What is the tax impact on those employees?
- Can they still participate in the U.S. social system and our employee benefit plans?
- Can they still be paid in U.S. dollars?
- Do they have to file a U.S. income tax return?
- How can I protect my IP?
- How can I structure things from a U.S. perspective to limit my global tax liability?