The realities of business change continually, usually driven by developments in the world, such as innovative technology, communication tools and other new opportunities. COVID-19 is a development in the world that is affecting business, forcing organisations around the globe to allow for working at home whilst simultaneously attempting to maintain revenue generation.
In such times, the importance of e-commerce and the internet become clear. Although these are not new realms within the digital world, it is only now amidst a global pandemic that many business owners are realising the importance of this sales channel. It is a channel that replaces the traditional selling via a physical outlet or face-to-face meetings, and which simultaneously extends business to a global reach. It must also be said that such a digital platform lends itself to specific types of business better, where online stores of physical products as well as the provision of services may be done remotely.
Business owners who want to reach a global audience often tend to focus mainly on distribution and operational issues and may as a result fail to take into consideration less immediate issues. These include legal obligations such as taxation, legal matters in foreign countries as well as the protection of assets. When making the step change from sole trader to a corporate structure, most entrepreneurs establish in their own jurisdiction without giving much thought to other options, yet many would be better served by setting up in an international business jurisdiction. Four aspects that should be considered when selecting a commercial base include:
Although selling locally has its advantages, your international market audience will carry out due diligence on your organisation, and the jurisdiction where it is maintained must stand up to scrutiny. It is therefore important that the country of your business has a good record of accommodating international businesses which in turn will mean that the service providers you will utilise will also be experienced.
Although “no tax” jurisdictions may be attractive, such jurisdictions generally apply higher service fees. These make up for what you save in taxes, as governments must still collect revenue which is necessary to run the economy which your business itself will make use of, such as infrastructure, education and healthcare. There are however reputable jurisdictions with favourable fiscal regimes, that continue to appeal to major businesses.
Although one wishes to never require recourse to the courts, this must function if it is needed. It is therefore important to consider jurisdictions with a full separation of personal assets of the shareholder from the legal or corporate entity. Should a contract be breached, you will require the commercial and civil law courts to offer just redress in a transparent and timely manner. A valuable business asset is intellectual property, although this is often ignored by business owners and its value only understood when it may too late. Protection of your intellectual property is critical in any jurisdiction in which you do business. Although your business name, logo or design may be long used in one jurisdiction, in another it may already be in use and you would therefore need permission from others to use your own assets, or even modify them to avoid discord.
Initiatives taken by banks to prevent money laundering and to stop terrorist financing result in increasingly sophisticated and robust client monitoring. Such strict processes have made obtaining a banking partner more difficult, as many banks and financial institutions only accept applications from known introducers. E-Money institutions have taken over as a fitting banking partner for an increasing number of businesses to maintain their daily operations easily, quickly and seamlessly across devices.
Our slogan at InterServ is Making Your Vision, Your Future and we truly do that by handling the corporate matters that otherwise occupy your time that is better spent with your team, building relationships with client or identifying new products and channels.