International entity, tax optimization

Hi Ed,

This is just one opinion based on having worked with over 50 countries related to both establishing new operations and dealing with existing operations abroad. It may be a little too ambitious to find one service provider that can "do it all" for you. You will more likely need an operational coordinator who would assist with implementing local operations, legal advisors (who can also handle legal HR matters) and last but not least tax advisors. For the legal advisor, the local advisor is more critical but you will naturally also need a US advisor. For tax, it's probably the opposite -- the US advisor is likely more critical for a US parent company, as in your case, but, of course, you must also have a local tax advisor.

It's not likely that you will find one service firm, even with many different specialties, that is best for all these needs. Just ask any multinational company whether they have a single service provider taking care of all their needs in even a single country, let alone many countries.

Typically, tax tends to be the initial driver in how to structure a foreign entity, ownership of the entity, its functional characteristics (e.g., IP ownership, limited risk) and intercompany arrangements (transfer pricing and agreements).

I will modestly claim that I can assist with some of the above. Someone who tells you they can do it all should be challenged with some healthy skepticism.

Jake

Hi Ed

I am familiar with both High Street and Nair and view them as tactical resources to help you manage the administrative issues of setting up and running a foreign operation rather than strategic decisions regarding how you set yourself up. They are very costly to utilize and at some point it makes sense to hire your own local advisors.

Your chosen structure will take into account tax, go to market plans as well as local considerations (for example, in some countries customers want to buy from an in country provider). I know a fantastic non Big 4 accounting firm with a very practical and straightforward advisor. I have found that some of the larger accounting firms may suggest complicated structures which are not appropriate for initial set up. If you would like the referral let me know.