CCW Business Solutions: International Services
Expanding your business overseas requires confidence. Doing so in new and remote markets requires assurance. Assurance that you are getting the right advice, first time, from people who are interested and understand your business and committed to your success.
We work with our clients to determine the most appropriate registration types to put in place in each of their target countries. In many countries the choice of options includes:
A Subsidiary is a separate legal entity to its parent company. It can carry out all types of legal commercial activity and can employ staff engaged in all functions, including sales, marketing, customer support, product development and R&D.
Establishing a subsidiary need not be costly or over-engineered. Depending on location it is usually possible to establish a subsidiary within one to six weeks. Certain countries, with more onerous registrations requirements, such as China, Brazil, India and Germany can take longer, sometimes up to six months to complete full registration.
Many of our clients establish a subsidiary because of the protection it affords to the parent company and use it to act as the parent company to regional branch offices. Others use it as a regional profit centre as part of a wider global tax planning exercise.
A Branch is often a quick and easy way to establish a full operating presence in an overseas country. Registration time is generally quite quick and costs are not onerous. One additional advantage is the speed with which a branch can be closed down should the parent no longer require it.
Note that a branch is not a separate legal entity to its parent company and as such represents an extension of the parent in to a new legal jurisdiction. Companies should be careful about the potential tax and permanent establishment risks that they might arise whilst operating through a branch in a foreign company. They should also consider the filing requirements and the potential for parent company data to be made available to the public in the overseas country.
We increasingly find this route can present more challenges as many legal systems are less developed in this area. As an example, it is not currently possible to invest in China directly through a branch and in Brazil it is almost impossible to establish one.
A Representative Office is generally a non-taxable business registration that can be used for preliminary market research and market entry purposes. Activities of a commercial nature are not typically allowed to be undertaken and customers cannot be invoiced from a Representative Office.
In China, while the same commercial limitations are imposed on Representative Offices, they are taxed on a ‘cost plus’ basis.
As with a branch, the Representative Office is not a separate legal entity to its parent and as such the parent continues to carry all trading and employment liabilities. Many of our clients use an interposing holding company to act as the parent to their international Representative Offices, however some countries impose regulations that restrict this practice (e.g. China and India) where others expressly prohibit it.
Bookkeeping and Accountancy
CCW Business Solutions provides all of its clients with a comprehensive range of financial accounting solutions tailored to meet your requirements.
Your finance team need regular visibility on performance of your international operations. We can provide this in a variety of ways to suit your particular requirements.
Typically this take the form of monthly financial statements for your own reporting purposes together with quarterly reports to support board presentations.
- Preparation of monthly management accounts reporting to an agreed timetable and to an agreed chart of accounts.
- Preparation of a monthly cashflow forecast for funding purposes.
- Periodic VAT/sales tax preparation and filing. Depending on country and/or the amount of tax payable these returns could be monthly, quarterly or annually.
- Accounts Payable management and processing of all invoices and expenses.
- Maintaining fixed asset register, where necessary.
- Maintaining accruals, prepayments and all other balance sheet controls and reconciliations.
- Bank account management including payment of vendors and employees expenses on your behalf, posting of all transactions and monthly bank reconciliations.
- Preparation of the monthly payroll and payment of salaries across all agreed countries. We will also make the payments of the withholdings to the local authorities together with the payment of any benefits and/or insurance premiums.
- Handling correspondence with your international employees including questions and queries related to expense claims, payroll and vendor payments.
- Quarterly review meeting with you to ensure deliverables are being met and that quality is exceeding expectations.
- Preparation and filing of quarterly VAT/sales tax returns where applicable.
- Preparation and filing of any other quarterly returns such as your Chinese Foreign Enterprise Income Tax (FEIT) Return or quarterly corporate tax payments on account.
- Prepare and file the annual financial statements for each of your international subsidiaries and branches, where required.
- Where required by law, work with your auditors to ensure local audit obligations are met.
- Complete and file annual corporate tax returns.
- Complete and file annual payroll returns
Getting your employees paid on time and the correct amount is clearly critical to the success of your international operation.
CCW Business Solutions is able to offer a truly global payroll service. Centrally coordinated, we will:
- process monthly payroll for your international employees.
- ensure all local withholdings and social security obligations are met.
- pay net salaries to your international employees each month, ensuring each employee receives a local payslip each month.
- prepare monthly payroll reports for entry in to your general ledger.
In addition, we also wire the withholding taxes and the employer and employee portion of the social security taxes to the local authorities whilst at the same time ensuring that any additional items, such as pension arrangements, are also taken care of.
Tax and Compliance
Operating in overseas countries presents a significant challenge. Each country has different tax laws and compliance requirements and filing deadlines vary greatly from country to country.
We ensure that your international tax filings are made and that your compliance deadlines are met by agreeing with you a timetable of deliverables at the start of each financial year. We then use our own local experts to ensure that these are taken care of for you.
Corporate Income Tax Returns
If you operate a branch or a subsidiary overseas you will be required to file a corporate income tax return. These returns are typically filed once a year, however some countries require more frequent filings. Wherever you are operating, CCW Business Solutions will ensure that your returns are prepared and filed in accordance with local rules.
Value added tax legislation is complex and can have a significant impact on how you might structure your international sales agreements. Whether you are shipping product, selling services or enabling your customers to download software online, there are VAT issues that need to be addressed upfront in order to avoid complication and penalties arising at a later date. CCW Business Solutions’ professional VAT team can provide full guidance and support on all of your VAT issues.
Inter-Company Services Agreements
Where you may have related party transactions between the US parent company and its overseas subsidiaries then these transactions and services should be documented just as they would be if they were with an independent third party. Our tax team can advise on and implement the documentation required in order to ensure you comply with local country transfer pricing legislation.
If you plan to grant stock options to your international hires you need to know the implications of doing so. The tax point can vary from country to country and the cost to the employer as a result of an employee exercising those options can be significant. With careful planning it can be possible to take advantage of some favourable local rulings and CCW Business Solutions can help you to do this.
Expatriate Tax Services
If you plan to send one of your North American employees overseas for more than six months you will most likely be required to withhold overseas taxes from their pay-cheque each month. This can present significant challenges, particularly for a US citizen who is taxed on a worldwide basis and who wishes to continue to contribute to the US social security system. CCW Business Solutions provides an end-to-end tax service that will give you and your employee peace of mind that they will not be suffering an additional tax burden as a result of their international assignment.
Working seamlessly as an extension of your HR and legal departments, we aim to make the process of employing and managing your international staff as painless as possible. Our suite of services:
- Country-compliant contracts of employment
- Offer letters
- Contractor arrangements
- New hire induction
- Country-specific employment law key facts
- Policies and procedures/employee handbook
- Performance management/development
- Absence management
- Stress management
- Health and safety obligations
- Discipline and grievance issues
- Collective employment relations; trade union/workers representation
- Redundancy management process (RIF)
- Benchmarking services
- Guidance on in-country benefit provision
- Tax-efficient in-country employee benefit solutions
- Stock, stock options and ESPP plans
- Total reward statements
- Flexible benefits
Immigration and global mobility
- Guidance on country specific immigration requirements
- Visa and work permit applications
- International assignment letters
- Cost of living allowances
- Global mobility and relocation services
- Advice on reciprocal tax and social security agreements
- Expatriate tax advisory services
- Repatriation services