There is a whole host of things to consider:
Choose your jurisdiction carefully. There are so many things to be taken into consideration when deciding where to incorporate a company. Reputation is a key factor. Is there a sound regulatory system? Is there access to banks? Can I get there easily? Is it white-listed?
Once you have found a jurisdiction you like you should not proceed until you have taken legal and/or tax advice to ensure what you are planning is achievable both inside and outside of the jurisdiction. There will be a cost to this but it might prove to be a small price to pay in the long term.
Conduct your own research. The financial regulator of most jurisdictions will hold details of their licence holders. Find a provider licensed to provide the services you are after. Ask your legal or tax advisor or a business associate if they can recommend someone. Where possible try and meet the provider, ask yourself if you think you can work with these people.
It is important the service provider you select understands your business and what you are looking to achieve. Find out what expertise or experience they have in your sector. Are there licensing requirements they can help you with? Do they understand operating a business globally? Do they have expertise in other jurisdictions if required? Do they have multi-lingual staff? The list is endless and ultimately satisfying yourself they understand your goals and are able to communicate with you are essential to a long-term relationship.
The provider you select will be required to conduct their 'Know your Customer' (KYC) process on you. As well as providing your ID document and proof of residency you should expect to disclose information about how you have acquired your wealth. This will need to be detailed and you might be required to provide documentary evidence to substantiate the information.
Each provider will offer a range of services. Ensure you agree what you do and do not want them to do for you and confirm this in the Letter of Engagement they will draw up. There might be times when additional work is required but this should be agreed in advance by both parties. Bear in mind that some work may be compulsory depending upon the nature of the services required.
Fees will vary from jurisdiction to jurisdiction and from provider to provider and will also depend on what services you require. Most providers will agree a fixed fee for the provision of certain services such as the provision of a registered office, annual director's fees and opening a bank account. It might be difficult to work out exactly what administration services will cost particularly for a new company and some providers might offer a fixed fee for the first period to assist with budgeting, however, a 'pay as you go' arrangement can often be more cost effective with work being charged on a 'time spent' basis.
Setting up a company which has its registered office on a brass plate in a low-cost jurisdiction is highly unlikely to be enough to convince anyone it has been set up to do anything other than avoid paying tax. The recently introduced Economic Substance regulations has meant that additional consideration needs to be given to companies involved in certain sectors. It is therefore essential to establish a real presence by conducting as much business activity in the jurisdiction as possible. This might include, but not limited to, having local directors, maintaining an office, employing local specialist staff, hosting your website, or having a local bank account.
This is often the most difficult element to understand. To benefit from a local tax regime your business should be managed and controlled from that jurisdiction. Local director(s) should be properly empowered to make day to day decisions in running the business in accordance with the intended purpose of the company. Formal decision making and record keeping within the jurisdiction helps ensure the credibility of the operation in the chosen jurisdiction giving greater confidence to trading partners, customers, regulators and other authorities when working with your company.
It has become more difficult to open bank accounts globally, but your provider should have a range of options they will be able to offer you. In many instances the bank will insist that a bank account is operated and controlled locally by your provider. Clients, however, can be granted viewing access and be able to authorise payments before they are made by the provider if required. In well-regulated jurisdictions staff responsible for operating client bank accounts are integrity checked by the local financial services regulator providing clients with a greater level of comfort.
ILS World is a corporate service provider headquartered in the Isle of Man and has offices in London, Hong Kong, British Virgin Islands and Portugal.
Established more than 30 years ago the business was subject to a buyout in 2006 by the current management who are committed to maintaining the independence of the business. ILS World prides itself on offering a personal service to our clients from our global network of offices.