Starting a Company Remotely Abroad: Russian Entrepreneur’ Path to Global Market

In today’s world of modern technology and global markets, an increasing number of entrepreneurs are contemplating the feasibility of remotely establishing a company abroad. For Russian entrepreneurs, this represents a complex yet highly promising endeavour. Setting up a company abroad offers the potential to extend your global presence, alleviate tax obligations, and explore expanded investment prospects. In this article, we will delve into the key facets of this undertaking.

THE MAIN MOTIVATIONS FOR INCORPORATING A COMPANY ABROAD

Worldwide access and diversification of the customer base. One of the primary motivations driving Russian entrepreneurs to establish companies in foreign jurisdictions is gaining entry to fresh markets and clientele. In today’s Internet-driven business landscape, consumers actively seek products and services beyond their local boundaries. Consequently, for enterprises aiming to broaden their customer base and boost sales, launching a company abroad presents distinctive prospects.

Unlocking Investment Opportunities. When you register a company overseas, it offers extensive access to international investors and venture capital funds. Foreign investors frequently exhibit a greater inclination to invest in businesses incorporated within their own jurisdictions. This preference arises from a higher level of trust in local enterprises, a more straightforward mechanism for investment oversight, and an indication of the company’s global outlook and growth potential. Furthermore, it paves the way for diverse funding sources, including equity issuance, securing loans, leveraging crowdfunding, and various other avenues.

Risk Mitigation. Spreading business operations across multiple jurisdictions can help mitigate the risks associated with shifts in national legislation, political instability, or economic crises within a single country. This factor holds significant importance, particularly for investors, as it provides reassurance regarding the stability and long-term resilience of the company.

Tax Benefits. Numerous countries provide significantly lower tax rates in comparison to Russia. This can encompass reduced taxes on profits, capital investments (profits derived from the sale of shares or other investments), and the absence of specific types of taxation. Furthermore, many countries have double taxation agreements in place, with some offering more favourable tax incentives for small and medium-sized enterprises (SMEs).

Privacy and Anonymity. In several offshore zones and jurisdictions, entrepreneurs have the option to maintain confidentiality regarding company ownership and financial transactions, a critical aspect for asset protection.

STAGES OF INCORPORATION

Launching a company abroad necessitates meticulous planning and the consideration of numerous factors:

  • Selecting the appropriate jurisdiction. This choice is contingent on your specific objectives, tax benefits, capital needs, and more.
  • Administrative and legal structure. Options include a limited liability company (LLC), a joint-stock company (PLC), a branch, a representative office, among others.
  • Tax liabilities, encompassing the evaluation of tax rates, tax reporting requirements, and potential tax advantages.
  • Finding a registrar or law firm to assist with document preparation, communication with local authorities, and other administrative procedures.
  • Email-based KYC verification, typically involving the submission of a passport copy, bank statements, and other documentation.
  • Conference call as part of KYC and security procedures for client identification and discussing details.
  • Passport verification. Confirming the authenticity of your personal documents.
  • Client interview to clarify business objectives, plans, and particulars.
  • Price negotiation.
  • Drafting articles of association and memorandum of association to align with local regulations and requirements.
  • Commencing the incorporation process. Once all preparatory steps are finalized, the incorporation process commences, involving the submission of necessary documents and registration with local authorities.

WHAT TO CONSIDER

A Russian entrepreneur looking to establish a company overseas may face several challenges that require careful preparation.

It’s important to realistically plan the time required for company registration and business startup. The company registration process can be complex and time-consuming due to bureaucratic procedures and requirements. It’s also essential to consider restrictions on foreign investments in certain sectors and the requirements for having local directors. When opening a company’s bank account, there may be limitations on the types of companies that can open accounts, along with the obligation to provide specific KYC documents, restrictions on currency transactions, transaction size limits, and specific requirements for minimum deposits for opening and maintaining the account. A Russian entrepreneur seeking to set up a company abroad may encounter various challenges that necessitate thorough preparation, particularly in light of sanctions and banking restrictions affecting Russian citizens. It’s also worth noting that banks may alter their rules and requirements over time, necessitating continuous updates and compliance. When selecting a jurisdiction, it’s crucial to ascertain whether the country is susceptible to political and economic fluctuations that could impact your business. Assessing the level of stability in the chosen country is vital.

Our company can assist in opening companies in the following jurisdictions: Cyprus, Gibraltar, Guernsey, the Isle of Man, Malta, Portugal, Switzerland, the United Kingdom, the Bahamas, the British Virgin Islands, Abu Dhabi, Bahrain, Dubai, Oman, Qatar, Saudi Arabia, China, Hong Kong, Singapore, Mauritius, and South Africa.