Establishment of International Businesses
The Canadian tax system encourages Canadian businesses to expand internationally. Provided that a bona fide active business is carried on abroad, income from that business can often be earned at least partly through a corporation located in a low-tax jurisdiction. We are experts in structuring such arrangements, advising on possible locations, and implementing the necessary components, and we have experience in setting up companies in numerous jurisdictions around the world.
In assessing an international business arrangement, we
- work with the client to understand the overall business, how it will operate internationally, and how it will be administered outside Canada;
- assess the Canadian tax implications of the overall venture, including how to own the foreign company and how to finance it, and advise on the tax consequences of repatriating funds to Canada and of selling the business;
- advise on appropriate jurisdictions;
- prepare a detailed and comprehensive memorandum concerning the overall tax plan;
- assist with implementing the plan by obtaining local tax, legal, and other professional advice in the jurisdiction where the business will be located;
- make introductions, as appropriate, to professionals in that jurisdiction who can assist in implementing the business plan and administering the offshore entity;
- prepare any required valuations of the business or intangibles (for example, intellectual property); and
- provide a commentary on transfer-pricing issues.
Through our close associates, we can assist in developing and implementing an e-commerce initiative that may enhance an international tax plan.
We act in these types of assignments only if we are satisfied that a client intends to comply with all Canadian and foreign tax laws and to complete any required information returns and disclosures.