What are the most typical corporate structures used for doing business in a foreign country (e.g. subsidiary)? (Webinar Attendee Question)

In our experience, at Hull Speed Associates, it is a combination of the company's current structure "corporate structure policy", what the company's future growth plans are, country specific requirements and what is most advantageous from a legal and tax prospective. The more thought put into this in the beginning the less likely it will be that the company will run into problems in the future. Be careful not to over engineer it though.

Kurt, the answer is invariably 'it depends'. The choices are usually Subsidiary, Branch or Representative Office / Place of Business but which one is appropriate will depend on a variety of factors including what type of activities are being undertaken on the ground in the foreign country, whether revenue generating activities are being undertaken, whether the local employees can conclude contracts etc. amongst other factors. Generally the subsidiary option is the more expensive one and brings with it a wider range of compliance requirements but does offer the protection of a separate legal entity to the US Parent. Branches and Rep Offices are generally less expensive to establish, operate and close down but do not offer the same level of protection against trading and employment liabilities as a subsidiary does. I agree with Bill that a company expanding overseas for the first time should keep it simple, not over-engineer it but keep an eye on risk.