6 Things to consider when setting up an international company for your startup

Taking your company global or making sure your startup is multinational from the get-go is a necessity in today’s business climate. Thanks to increased connectivity, business is now international, cross-border, and even borderless. This increased globalization means that entrepreneurs need to seek out new solutions for their business needs.

One of the first things you will need to do before launching your startup is to set up a corporate structure, or company that will hold your business activities. Furthermore, it is the legal entity that will be responsible for tax, compliance (where applicable), and that will be linked to your bank accounts and payment processors. Getting it right is important.

Nowadays, it’s not necessary to set up your company in the country you are from, or the country you reside in. A growing number of entrepreneurs opt for international business centres that provide greater flexibility, a range of benefits, and overall cost-efficiency.

If you are an entrepreneur or startup considering where to base your company, there are several factors you need to consider before you kick off.

What kind of company do you want to set up?

You need to think about what kind of corporate structure you want and need to fulfil your business goals. Each international business centre that provides company formation services has different types of structure. Each structure has a different purpose and formation process and requires different documents, fees, and levels of compliance.

Before you go ahead and pick a jurisdiction, it’s worth checking out the different kinds of structures available in different locations and what their pros and cons are. This will enable you to make a fully informed decision and help you make the right choice. It’s important to note that some business activities are regulated in certain jurisdictions, this means you may have to apply for a license or may even be restricted completely.

At this stage of the process, it’s wise to consult with a service provider as they will be able to assess your business model and suggest several jurisdictions that provide a favourable incorporation environment.

Partner with a corporate services provider

As mentioned above, it is often wise to partner with a corporate service provider. If you’re a startup, chances are that you have a long ‘To-Do List’ and adding ‘incorporating a company’ to it will create unnecessary work. Furthermore, unless you are an international corporate law and/or tax specialist with years of experience in the jurisdiction you’ve picked, you are likely to find the process complex and cumbersome.

To be sure you’ve picked the right place, to save time and effort, to be sure you’ve done everything correctly, for peace of mind, it’s generally better to hand over the incorporation of your startup company to a professional.

Get your documents together

Once you have settled on the best jurisdiction for your startup, it’s time to start the application process. The first task you will have to complete is compiling all the required documentation and the company registry of your chosen jurisdiction. Of course, the required documents will vary depending on the location, but they will generally include the following:

• KYC documents: you will be required to prove your identity both to the service provider and the registry. This will include a certified copy of your government-issued ID, proof of address (usually in the form of a recent utility bill), information on the source of funds, and a police conduct certificate demonstrating you don’t have a criminal record.
• Company documents: your company documents can include information on the company structure, shareholders, directors, the Memorandum and Articles of Association or similar, and even a business plan.
• Additional documents: depending on the nature of the business, you may be required to provide the CV of all beneficial owners, shareholders and directors, professional references, bank references, information on licensing (if applicable), proof of paid-up share capital (if applicable), and an application form.

As mentioned, this is just a guide. The actual documents will depend on the jurisdiction, type of company, and nature of the business.

Application process

Once you have got all your documents together, your corporate services professional will submit them to the company registry of your chosen jurisdiction. These documents are reviewed, and if necessary, you may need to submit additional supporting documents.

Once you receive notification that the company is incorporated, you’ll need to pay any outstanding fees or share capital amounts so that the company can become active.

Ongoing maintenance

Once your online startup company is registered and active, you need to ensure that you stay up to date with the required ongoing maintenance. Again, much of this is location-dependent, but as a general rule, ongoing maintenance of your company will include the following:

• Keeping company documents updated with any changes to purpose, business, shareholders, directors, etc
• Updating information such as a registered address, agent etc
• Payment of annual or periodic company fees
• Submission of annual accounts or financial statements where applicable
• Calculating and paying tax
• Annual or periodic auditing where applicable

Often, your service provider will take care of these matters as part of an ongoing maintenance agreement. You can also change to a different service provider who can provide this service for you. Many startups prefer to leave this kind of paperwork to have more time to focus on developing their business.

What do I do then?

Once your startup company is ‘live’, there are some other matters you need to attend to. Firstly, if you want to get paid, you need to set up a bank account and integrate payment providers. If you are working in sectors like online gambling, forex, subscription-based services, eCommerce, or similar, you may find yourself being referred to as “high-risk” when applying for an account. But don’t panic, this doesn’t mean it will be impossible.

Several international banks accept these kinds of clients, and there are third-party payment processors that will work with them.

Depending on your sector, you may also need to get a license. For example, if you are an online gambling startup, a crypto startup, a forex brokerage or exchange, or even offering some services in these areas, you may need to get additional approval from the jurisdiction you are operating from. This process requires collating documents, filing license application forms, ensuring compliance with local laws and regulations, and payment of a fee.

You also need to make sure you are registered for tax and are paying anything due. In some international business centres, startups and companies can benefit from 0% tax, but there may still be some registration and reporting obligations. Ensure you know where you stand and what’s required of you when it comes to fiscal matters.

Getting your startup off the ground is an exciting time. Taking care of all the paperwork behind the scenes is not so much.

Furthermore, it can be complicated, time-consuming, and easy to make mistakes. For this reason, it’s always advisable to engage the guidance of a professional to help you make the right decisions and enables you to channel all your energy into making your new venture a success.