We assist with the actual set-up of a new entity and its maintenance.
This includes designing the international legal structure between parent, subsidiary and affiliated companies and setting up an entity abroad, as well as (re)structuring intra-company relationships and other foreign company matters, including periodic corporate formalities.
As Legal Architects, we analyse the current corporate structure, and the risks associated with client supplied products and services. We then design a structure that minimises liability, segmenting, isolating and minimising risks. In addition to work permit and immigration aspects, we also take into account export and import aspects that are important in the Commercial area, both in terms of mandatory company registrations abroad (or preventing those) and in terms of related tax aspects.
The appointment of a group director as the managing director of a foreign branch may result in a work permit requirement, regardless of costs being passed on to the foreign branch. This must be determined and addressed in advance.
An incorrect ratio of share ownership within a group may lead to restrictions. For example, it can jeopardize intra-company transfers. The latter applies when a group employee is temporarily or permanently assigned to a foreign branch.
The use of an entity that supplies on the basis of incorrect Incoterms® may unintentionally become part of a foreign jurisdiction. To prevent this, a foreign group company becomes the importer of record in that country and imports Incoterms® DDP, while the group company that supplies remains outside the foreign legal system.
We are also Legal Consultants. This means that we not only design but also implement what we come up with. We direct and manage the process of legal and other matters involved in business expansion to and within other countries, taking that process off your hands.
Establishing a foreign branch involves several phases, which we will go through together step by step.
It begins with the pre-establishment phase. During this phase, we analyse the client's corporate structure, including the organization of its management. In addition, we assess the various options for managing the foreign company and for transferring specialists and managers to that entity. We then prepare a blueprint of the current situation, keeping in mind the changes that will apply after completion of the establishment phase.
Key components of this phase include:
Once the approach has been discussed and approved, we proceed to the establishment phase.
We closely cooperate with our clients, including during the establishment phase. Although the focus in this phase is on the legal aspects of setting up and establishing the new foreign company, a number of other issues are also addressed.
Our network is the client's network. We arrange introductions to local accountants, lawyers, banks, insurers and government agencies. If relevant, we also arrange introductions to other parties.
During this phase, a large number of KYC-related documents* usually need to be provided. Depending on the subject matter and country, these documents must be certified or legalised.
Once the paperwork has been prepared, the new entity is established. Registrations, authorisations and permits are applied for, while the new organisation takes shape.
During the establishment phase, Van Velzen C.S. acts as Legal Architect and Legal Consultant and takes care of:
Once the entire process of preparations and formalities has been completed, the new branch can start operating.
* KYC stands for Know Your Customer. Nowadays, documentation must be submitted to lawyers, accountants and banks before a client relationship can be established. KYC is normally provided in English or the local language. Van Velzen C.S. has a network of parties that translate and legalize documents.
After the start, there are usually a number of matters that need to be addressed:
The foreign entity is subject to foreign rules. For example, business licences must be renewed periodically, reports must be submitted, and other company formalities must be complied with. Important decisions made by directors and shareholders must also be recorded. Our compliance and corporate housekeeping staff and our foreign service providers take care of all these matters during the existence of the foreign entity.