How You Can Start a Business Abroad

How You Can Start a Business Abroad

In the context of a global economy, many entrepreneurs have the possibility of opening companies outside the borders of their home countries. One has the chance to choose the country, the industry and the type of company to establish, therefore the options are quite extensive. However, starting a business abroad is not only a matter of choices, but also of a list of requirements to comply with.

Most countries in the world work towards harmonizing their legislations which allow foreign investors to open companies through bilateral treaties and agreements, however each state has its own requirements with respect to the type of structure foreigners can register. Starting a business in China, for example, implies incorporating a certain type of company for foreign entrepreneurs.

So, let’s see what other requirements exist when starting a business as a foreigner in another country.

Planning is essential

There are countries, especially in Southeast Asia, where foreign investors are required to submit investment plans with special authorities in order to be allowed to operate on their markets. Among these countries, some of the most sought destinations are Indonesia and Malaysia. From the perspective of submitting an investment plan, opening a company Malaysia is simpler because the requirements are less restrictive.

Things change if the entrepreneur chooses a European country to open the company in. No special investment plans are required in Europe, unless the investor decides to move to a country through one of the programs initiated by the government. These are usually programs dedicated to foreigners seeking to obtain citizenship by investment and are now met in most European states.

The requirements for opening a company as a foreigner

Once the planning phase is completed, the company registration process may begin and, in order to start it, the foreigner will first need to prepare some documents. Among these documents, the future company’s incorporation papers are mandatory in every country. These usually imply the Memorandum and Articles of Association which must be drafted in the official language of that country and must also be notarized.

After this major step has been completed, the documents must be filed with the Commercial Registry along with other papers requested by the local authorities. Setting up a company in Spain, for instance, will require additional application forms and passport copies.

Tax registration

An important step for opening a company as a foreigner is to register the company for taxation. This is a mandatory requirement in all the countries in the world and is usually completed at the same time with the registration with the Commercial Register. In terms of taxation, a company must register for social securities as an employer and also for VAT (value added tax); however, VAT registration is optional in most cases. It only becomes mandatory once the company has registered a certain income.

Business licensing procedures

In most countries, the business licensing process is separate from the company registration because it depends on the industry the company will operate in. In this case, it will be a ministry or a specialized authority to issue the business license after a more thorough verification and after the submission of more extensive paperwork.

Even Seychelles, which is mainly known as an offshore destination, requires specific licensing procedures in certain industries. For example, opening a company in Seychelles in the financial sector will be subject to various licensing requirements. Once the licensing phase is completed, the company is ready to start operating.

Starting a company as a foreigner in another country is easier than ever in a world in which governments try to cooperate as much as possible and in which foreign investors are encouraged to expand their businesses. With a little bit of attention, research and legal help, in some cases, starting a business abroad can be a simple company registration process as the one in the entrepreneur’s home country.