TOP 3 tips on the content of foreign companies in 2020 (Part 2)
The Antwort Law team has prepared TOP 3 recommendations for owners and managers of foreign companies, by adopting and implementing which you will be able to prevent many problems and delays in the operation of your business. In the first part, we have already talked about the need for a quick response to any changes and requests concerning your foreign (and not only!) business. Whether it's a request from a bank or a tax service, information about planned changes in legislation - do not postpone active actions for later.
We continue the series of articles devoted to the peculiarities of the content of foreign companies and doing international business in 2020, and we present to your attention the second part:
Be mobile and don't stick to old solutions
The speed at which changes are taking place requires international business to be very flexible. For many businessmen who have been working with foreign companies for a long time, it becomes a real shock when the solutions they use stop working from year to year.
Perhaps the closest will be a comparison of the changes that are taking place in the field of international taxation and doing business with how the rules of warfare changed in the 20th century. Now, for business to succeed, it is not necessary to "build reliable locks", but to show flexibility and mobility, readiness to quickly adapt to new conditions and apply new solutions.
Next, we give some of the most illustrative examples in our opinion, showing how much the situation is changing, and how a timely reaction could save the business from unnecessary financial losses.:
To launch a new IT project, a businessman decided to open an offshore company, and asked for help in opening a bank account
Of course, offshore companies have served faithfully for many years many types of business. This is not surprising, given the advantages that offshore companies used to offer – anonymity, ease of registration and complete absence of taxes.
But now offshore companies in the vast majority of cases bring continuous problems to business. What has changed?
Firstly, offshore companies no longer guarantee anonymity. Almost all classic offshore companies either already have public registers of company owners, or will create them in the near future.
Secondly, it has become almost impossible to use offshore companies for work, because it has become almost impossible to open a bank account for them. Moreover, accounts that were opened earlier are being actively closed.
Thus, an attempt to use offshore companies today may become a waste of time and money for business, and not a working solution.
Today, it is necessary to abandon the use of offshore companies, complex multi-level or opaque structures as part of international business as much as possible and focus on competent tax planning.
A trading company with an account in the Baltic States began to receive request after request from the bank and asked for help in preparing responses
For many years the Baltic States have been a window into the world of European banking for businessmen from all over the world. Many foreign companies with roots from the CIS opened accounts in Baltic banks for completely different types of business. However, in recent years, the Baltic banking system has been targeted by international and local financial regulators due to problems with the implementation of AML (anti-money laundering) rules. Due to this attention, the rules of customer service in banks have been repeatedly complicated, and this process is still ongoing.
The natural result of the processes described above was the transformation of Baltic banks into a "red zone" for foreign business. Many companies with foreign founders and directors simply closed their accounts, other companies are constantly attacking with a variety of requests. At the same time, until the bank's client gives an exhaustive answer, all operations on his account are suspended. Thus, Baltic banks today are far from the best tool for doing business.
If the client had immediately turned to us for help, instead of wasting time and effort preparing answers to the bank's incessant requests, we would have immediately recommended him to open an account in another jurisdiction. Even under quarantine, there are options for reliable banks and payment systems that open accounts remotely and do not bombard their customers with constant questions.
When old solutions stop working, it's not worth wasting energy trying to prolong their life. Follow the changes, trust trusted consultants and always be one step ahead of the changes that are taking place.
Professionals from Antwort Law always offer clients relevant and working solutions, and are ready to advise on all aspects of their use!