The world and dynamics of business are changing fast, driven by technology that permits new opportunities. As part of the response to COVID-19, millions of people around the world faced a new reality of working at home. Simultaneously, business owners and managers wonder how they can safeguard revenues when people are confined to home.
Although the internet and eCommerce have been with us for quite a while now, a staggering number of businesses fail to exploit this sales channel that can truly be a game changer. The premise is simple enough: instead of selling through a physical outlet or face-to-face meetings, an online platform permits a business to reach a much wider audience, potentially worldwide. Certain types of business lend themselves more easily to scale internationally – apart from countless online stores of physical products, intangibles, services and intellectual work may often be done remotely.
Most entrepreneurs looking to expand internationally focus heavily on distribution and operational matters, while inadvertently failing to consider less immediately critical matters such as taxation, legal obligations in foreign countries or protection of business assets. When entrepreneurs make the step from operating as a sole trader to a corporate structure or formal partnership, they incorporate the legal entity in their own jurisdiction – and why wouldn’t you keep things close to home? Here are four aspects we advise any entrepreneur or business to consider in their choice of jurisdiction in which to set up shop.
Reputation and standing
Right now you may be comfortable selling in your local area, or just starting out you are happy just to make a good sale. Professional potential buyers of your services will be doing background checks on your business and you want the country you choose to stand up to scrutiny. It should therefore be a jurisdiction with an establishment history of hosting international businesses – this will also be helpful as the service providers you will need to support your activities along the way will be seasoned and established.
Fiscal matters
Although some people are still tempted by so called “no tax” jurisdictions, the truth is that what you save in taxes you will pay in higher service fees, as governments do collect revenue in one form or another. It is also proper to pay one’s fiscal dues for the healthy running of the economy, to find adequate infrastructure services when required not to mention the long term social investments in education and healthcare. Nonetheless, certain jurisdictions do offer more favourable fiscal regimes that continue to attract serious businesses.
Legal Protection
Legal protection is something that, like a seat-belt, you wish to never need, yet if you do call on it you expect it to function flawlessly. You want to consider jurisdictions that establish a complete separation of personal assets of the shareholder from the legal or corporate entity. In the event of a breach of contract you need the commercial and civil law courts to provide opportunity for fair redress in a clear and timely manner. Intellectual property is a valuable business asset that often goes ignored until it is to late: remember to protect these in any country you seek to do business in. It has often been the case that your business name, logo or design (or one very similar) is already in use by a local party and you may need to request their permission or to alter your own assets to avoid conflict that consumes resources you can ill afford.
Banking relationships
Banks are at the front of worldwide action to combat money laundering and to prevent the financing of terrorist activities. As a result, their on-boarding and ongoing client monitoring processes have become vastly more sophisticated and stringent than they were even just a couple of years ago. This has made finding a banking partner more complex; in fact many financial institutions are now only accepting applications from trusted introducers who help to prepare the client for the account application process. An increasing number of businesses are finding in e-Money institutions a suitable banking partner for their daily operations with ease of use, seamless transition across devices and rapid service and turnaround times.
Our slogan an 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.
Inter-Serv is a business too and we are also dealing with the challenges posed by COVID-19. We have been monitoring the situation since it emerged in Asia in December and as it spread closer to home, we pro-actively mobilised and invested to permit our entire workforce to operate remotely. We hoped this would not be necessary, but when it became so, we were ready and able to do so seamlessly.
Malta’s Business Registry is also fully operational online, permitting the registration of new companies, partnerships and foundations, as well as any changes to existing entities. We believe that the business world will be forever changed, even after COVID-19 is tamed. We can help you to make sense of these troubled times and forge a way forward despite the turmoil.
