3 min read

Why do businessmen register foreign companies? Company registration Service bring benefits and establish those processes for which the capabilities of a legal entity in their native jurisdiction are not enough. But what are these processes and what exactly is a foreign company needed for? Experts have 8 answers to this question too.

Reason 1. For big deals in overseas markets

A foreign company is necessary if the exporter is going not only to enter the market, but also to work in a new jurisdiction: to actively promote their products, and possibly start production. In this case, the implementation of business plans should begin with the selection and registration of a company of a suitable type with convenient taxation.

Reason 2. To reduce risks

In trading operations, foreign companies can serve to diversify risks. The firm will protect the business from political or economic problems at home.

Reason 3. It is convenient and profitable to own intellectual property rights

Legal entities abroad are often registered for the sake of owning intellectual property (IP) rights. A trademark, invention, work of art can be registered anywhere in the world, both to an individual and to a legal entity. 

Reason 4. It is easier to open a Merchant account 

A foreign company with a merchant account will allow serving customers in different parts of the world, no matter what currency they pay for services or goods. A multicurrency account in a foreign bank with a merchant account is an excellent base for business. 

Reason number 5. To attract investment

Any investor wants to make money, but at the same time not risk more than is required. Singapore markets are profitable, the margin here is higher than in Europe or America, and foreigners are ready to invest. But they are afraid to invest directly through state companies, as this greatly increases the risks (instability in the country, no reliable judicial system, imperfect legislation, etc.). Sometimes foreign investors offer to establish joint ventures abroad, in a more predictable jurisdiction.

Reason number 6. Convenient to own assets

A holding structure can be built from several foreign companies, which will be a good solution for owning assets. This is convenient when you need to collect all flows from a business at one point, and centrally manage a complex structure.Singapore incorporation servicesprofessionals not only give complete information about business incorporation tips but also guide you throughout the procedure. Various accounting firms Singapore offer huge range of services (like secretarial, immigration, accounting), so it is important to research about them before consultingto avoid common GST errors.

Reason number 7. Protect businesses from raiding

The presence of a foreign structure helps to protect a business from raider seizure; this is one of the popular reasons for registering a foreign company. If the legal entity includes non-residents, it is much more difficult to select it. In addition, companies from other jurisdictions can defend their interests in the courts of the country of registration, which raiders cannot put pressure on.

Reason number 8. Protection or purchase of real estate

A foreign company allows you to protect real estate. Abroad, legal entities are used to purchase real estate in the event that only a resident of the country can buy it.

The company must develop business and be profitable

A foreign company nowadays is a special area of responsibility, and you need to register it if it really helps to develop your business. This tool requires maintenance costs, so its benefits must outweigh the costs.

In addition, when using them, you need to take into account the different facets of ownership of a foreign structure and know the international and local legislation of the country of registration of the company at a good level, transfer pricing and other tools to combat money laundering. It sounds scary, but it’s not that difficult if you use the services of professional consultants.