International expansion requires careful planning around entity structure, tax optimization, and regulatory compliance. This guide walks through the key considerations for establishing a global presence.
Choosing the Right Entity Structure
Your entity structure impacts taxation, liability, and operational flexibility. Common options include subsidiaries, branches, representative offices, and partnerships. Each has distinct legal and tax implications.
- Subsidiary: Separate legal entity with limited liability protection
- Branch: Extension of parent company, simpler but less protection
- Representative Office: Limited activities, typically sales and marketing only
- Joint Venture: Partnership with local entity for market access
- Employer of Record: Hire without establishing a legal entity
Tax Considerations and Transfer Pricing
International tax planning must comply with OECD guidelines and local regulations. Transfer pricing documentation is essential for intercompany transactions. HMRC provides detailed guidance on transfer pricing for UK businesses with international operations.
Regulatory Compliance Checklist
- Register with local tax authorities and obtain tax IDs
- Establish local bank accounts and treasury infrastructure
- Comply with local employment laws and labor regulations
- Register for VAT/GST where applicable
- File beneficial ownership information with Companies House (UK entities)
- Maintain statutory registers and file annual returns
- Implement GDPR-compliant data transfer mechanisms for EU operations
Permanent Establishment Risk
Understand permanent establishment (PE) rules to avoid unintended tax obligations. Activities like maintaining an office, having dependent agents, or conducting substantial business can trigger PE status.