Covid-19 has damaged the worldwide economy to such an extent that governments in Europe, USA and Worldwide are taking a long hard look at their domestic economies which have stagnated. Many countries have put in place measures to kickstart their economies including VAT/GST holidays as well as incentives for companies to start producing and consumers to start purchasing again.
This is a great opportunity for foreign companies and non-resident individuals to start a business in Europe, USA and worldwide as countries start to welcome business and tax receipts. Companies, if they are well placed, and have a well-positioned product will be in the starting line to ensure that they get a portion of this business. Culturally and commercially however it is best to have a local company to do business in Germany, France, Italy, Spain, USA and Worldwide.
Setting up a company in Europe and indeed worldwide is not without its drawbacks especially if firms are looking to incorporate in multiple countries but it can be done. One has to consider a number of factors including: banking, local laws, financial compliance as well as culture and language. The latter two are just as important, as compliance.
Without understanding the local language or, indeed, having even a small knowledge of the culture this could create issues in terms of how companies work with customers, deal with banks to get accounts open and even down to dealing in the most appropriate way with suppliers and understanding local company legislation that may have an impact on the business.
So, if this is an issue when incorporating in one country in Europe say – just imagine how complex it then gets when you are incorporating a company in multiple countries that are not just based in Europe but USA (yes USA has language and culture issues too!) as well as Asia and beyond.
Issues to consider when setting up worldwide: share capital and banking.
Briefly and simply, share capital is the amount of money put into the company to show that the company is set up and has working funds. Share capital requirements differ from country to country with several countries having a small share capital input such as UK, USA, France and Germany but, and this is the rub, banks require companies to invest a lot more into the company than 1 Euro or 1 US Dollar. Banking is key to having a successful company set up and so it is hugely important to budget for the level of investment the company will be putting into incorporating in multiple countries.
It is also important to understand, just like building a property, that a company set up worldwide may involve complex travel plans and travel budgets as well as an individual who is willing to commit to several days or intermittent days of meetings with notaries, lawyers, accountants and banks.
Pulling this altogether needs specialist knowledge of the countries involved and experience of multiple company incorporations to help you along the way. Please don’t hesitate to call us on +44 (0) 20 8421 7470 or contact us via the website for help and advice.