How to choose the right country for relocating your company

Lower business costs, the ability to reach new markets and a skilled workforce to hire are often among the main reasons why investors choose to relocate a company to another country. Some companies may simply want to lower the overall taxes on their business profits and this can be accomplished by moving the business to a low-tax jurisdiction. On the other hand, businesses that need to find a more suitable workforce can move to a country where they can easily find employees that are more qualified and skilled. The primary reasons will differ from one business to the other and, in most cases, the decision to relocate will be motivated by a combination of these criteria.

This is a process that has the potential to yield higher profits for the company and allow for overall better business development.

The first and foremost step when choosing to move the company is selecting the country for relocation. Investors can start by asking themselves what countries are favourable for the particular business sector, what the taxation, accountancy and general start-up procedures are as well as the legal requirements for companies. The location is important for a number of reasons, starting with the possibility to have access to reduced business costs. Labour and workforce issues, as well as the overall costs of living, can also be taken into consideration. Choosing the right country for relocating a company is an important step that requires careful and informed planning.

Top reasons for company relocation

One of the main reasons for company relocation can be linked to overall lower business costs. Some countries like Ireland in Europe and Singapore in Asia offer lower tax rates and this can be also an important reason for many investors looking to cut down on the taxes on company profits. The competitiveness of the economy and the level of development for the financial market are important reasons to move a company to another country, especially for emerging financial start-ups that are looking for a country with sound financial institutions and a good regulatory regime.

Another reason for choosing to relocate a company can be linked to geopolitical changes. Company relocation has become morepopular in light of the Brexit, as companies are taking precautionary measures. According to CNN, companies in the financial services industry have moved “at least£800 billion ($1 trillion)worth of assets out of the country”, as per a report issued by Ernst & Young.While London is an important destination for many companies in the financial industries, in light of the recent changes, relocating to other countries like the Netherlands or UAE is a choice driven by the aim to reduce the uncertainty post-Brexit. In this case you, for example if you choose UAE for relocating, you may need company formation services in Dubai, one of the most important business hubs in the Middle East.

Popular countries for company relocation purposes

Singapore is the number one location for starting a business, as presented by  Forbes. The two main strong points of this location are the ease of doing business and the ease of accommodation for expats. Singapore has always welcomed foreign entrepreneurs and workers and this is reflected by the high percentage of foreign population in this state. Moreover, the city is very well connected to other Asian financial and business hubs and the employees enjoy high-payment. Two areas in which the city-state ranks less favorable are the cost of living and internet use.

Investors who are interested in exploring the business opportunities in this location can contact a team of agents specialized in opening a company in Singapore. Another option for relocating a company to Asia is Hong Kong, a direct rival to Singapore, a city that offers a favorable business climate and the advantage of being located close to Mainland China.

Investors and entrepreneurs also have a number of options for company relocation in Europe. The Netherlands and Switzerland are two of the options, both countries scoring well for the ease of doing business. Ireland is another option for relocating a company in Europe, mainly because of the ease of doing business and the low taxes.

What to take into consideration when relocating a company

Relocating the business headquarters is a process that can start with preparing a business plan: the details of the move can be summarized, along with an approximation of the costs for the process. The manner in which the business will target the new market is also important, especially when diversifying the client base is the primary reason for the relocation. Lastly, investors may want to prepare a financial prospect for the first year of the move. Other important issues to take into consideration when relocating a company can include the following:

  • The incorporation process: Different jurisdictions have different requirements for company formation and, in some of the popular locations, opening a company will only take a few steps. Hong Kong and Singapore are examples of these types of locations where foreign investors can easily open a private limited liability company. Legal structures can vary from one jurisdiction to the other, however, it is usually recommended to incorporate the same business structure: for example to maintain the limited liability company type of entity.
  • Banking: In some cases, it may be important to open a corporate bank account at the same bank as that in the country from where the company is relocated, when possible.
  • Legal issues: The tax laws, just as the corporate laws, vary from one country to the other; it is important to seek legal advice on the most important laws that affect companies in a chosen jurisdiction. Some of these laws can include the company’s law, the intellectual property law, the tax law and others; likewise, investors can also seek advice on the applicable tax incentives, if any.

Many companies choose to relocate their headquarters abroad mainly to have access to more favourable income and capital gains taxes. Regardless of the reason, moving a company is a process that involves several steps and relies on careful and considerate planning, along with a thorough understanding of the corporate laws and regulations in the new jurisdiction.


There are 0 comments on this post

Leave A Comment