What is an international company, and who is it for?
Updated: 2 days ago
An international company is a company incorporated in one country and used by people or businesses based in others. Many are set up in jurisdictions with simple company law and a neutral legal system. Others are set up simply because a business trades or invests across borders and needs a base that suits it.
There’s nothing unusual about it. Large businesses do this routinely, and so do founders, investors and freelancers with international clients. What matters is the reason for the structure, and whether it is set up and run properly.
What it can do
Hold shares, property or intellectual property in a neutral legal setting
Contract with customers and suppliers in several countries
Act as a holding company above operating businesses
Provide a common vehicle for partners or investors from different countries
Give you a base in a particular region, such as the EU, Asia or the US
What it can’t do
Remove your tax obligations where you live. Most countries tax residents on worldwide income, and many have rules aimed at foreign companies controlled by their residents.
Keep your ownership secret from authorities. Companies and their agents collect and verify owner information, and tax authorities exchange information with each other.
Work without any real activity behind it. Banks and authorities look at what the company does, where decisions are made and who benefits.
Guarantee a bank account. Banks decide for themselves, case by case.
Why the rules are tighter than they used to be
Over the past decade, governments and banks have introduced stricter identity checks, registers of beneficial owners, annual reporting and, in many places, rules requiring real activity for certain kinds of business. Information about accounts is also shared between tax authorities under international standards. None of that makes international companies unlawful. It means they have to be set up and run with proper records, honest reporting and a clear commercial purpose.
Who it suits
Businesses with customers, suppliers or partners in several countries
Investors holding assets or shares across borders
Founders who need a neutral company for investors or joint ventures
People relocating, who need to plan the structure before they move
Who it usually doesn’t suit
Anyone whose main aim is to avoid tax in the country where they live
Very small businesses where annual costs and paperwork outweigh the benefit
Anyone who needs to trade in their home market without a presence there
Anyone who can’t yet say what the company will do
What to do next
Start with what you want the company to achieve, then work backwards to a jurisdiction. Our guide on choosing a jurisdiction shows how. If you’d like to talk it through, book a consultation.
This article is general information, not legal, tax or financial advice. Please take advice from a qualified professional in the country where you live.
