The place of a company’s incorporation and daily management of a business activity plays an important role in a company’s development. Choosing one rather than another country for the company’s incorporation might mean a significant reduction of taxes, resulting in a more cost-effective business management. Offshore business environment provides attractive opportunities for diverse business activities, significantly improving the resources management aspect.
Usual practice shows that in the start-up phase of a new business activity an entrepreneur automatically incorporates a company in the country of his/her residence, as he/she is familiar with the existent laws and regulations. However, it might be a country with excessive red-tape, elevated costs and extremely high taxes for that particular business activity, that a priori obstacles the business development at the level it might have been achieved. In the start-up phase, an entrepreneur has too many organizational issues to think about – a proper human resources structure, financing options and initial capital, contracts with future partners, market analysis… Not always an entrepreneur pays enough attention to the country in which the company for a business activity is incorporated, even though from the very beginning initial and periodic costs might be significantly reduced.
In case a company has not made the most appropriate choice of the country of the company formation from the very beginning, there is always an opportunity for the company’s redomiciliation at any development stage. All the jurisdictions have different internal rules and regulations and a company formation in Panama, in the United Kingdom, Nevis, Cyprusor United Arab Emirates, for example, will bring different opportunities, advantages and challenges. Not all the jurisdictions are appropriate for all the business activities. It is also important to understand if the company is a small-, medium-sized enterprise or a big multi-national corporation. Depending on the market segment a company operates in, its activities, size, culture, goals and objectives, the right solutions should be studied individually to every case together with a professional business consultant.