Compliance Issues to keep in Mind while Expanding your Business to Brazil

Brazil today is proving itself able to face turbulences and global financial crisis soundly and, as a result, is gaining increased attention from international media and global investors. After India, China, Indonesia and the U.S.A., Brazil represents the fifth largest market opportunity in the world. Recent International Monetary Fund (IMF) reports indicate that Brazil leads all other South American countries in terms of infrastructure and technological development.

In an international business expansion, people seeking to expand their global enterprise into Brazil encounter challenges while doing business within this rapidly evolving economy. There heavy business regulations accompanied by numerous bureaucratic hurdles spread out among various governmental agencies. Below are the top five corporate compliance concerns facing businesses looking to expand to Brazil:

• Brazil Lacks a “Place of Business” Concept

Brazil is one of the few countries that lack recognition of a “place of business”, from an organizational and logistical standpoint. Brazil’s strict requirements stifle the establishment of ground teams or pop-up operations. Foreign business entities must exercise a lease on premises from day one to initiate business dealings within Brazil. The setup of a branch office in Brazil requires presidential approval, with the only viable option to setup a subsidiary even if only to hire one employee. This requirement demands that businesses be very certain and very prepared for the expense of establishing a presence in Brazil before ever setting foot in the country.

• Fulfilling the LTDA Requirements

The most common business entity is the “Limitada.” While this is touted as the simplest office to establish in Brazil, it is by no means a simple and flexible process to create. Organizations must contend with a labyrinth of steps and these steps and time estimates may differ from state to state. One reason the process can take so long is that the filing requirements are spread out across various governmental agencies, both federal and state. Compliance issues surrounding the Limitada not only police the establishment of a business, but its closing as well.

• Corporate Tax Filings

Brazil has different categories of indirect taxes, both federal and state thus VAT, sales and taxes meet multiple filings requirements and making expert accounting help a key consideration for any organization setting up shop in Brazil. These filings do not occur in concurrence or in consideration of corporate calendars. For companies setting up cost centers in Brazil, the regulators do not recognize the generally accepted OECD “cost plus” model for intercompany agreements.

• Employment Law

Employment represents another myriad of regulations for foreign entities in Brazil. Organizations seeking to establish a presence in Brazil are wise to closely study employment laws in the country, as they will inevitably find themselves tethered to a number of complex national-to-foreign worker ratio requirements, unemployment insurance regulations, social security taxes, termination restrictions and payroll laws. When hiring in Brazil, it

pays to be very certain of the employees brought on board to a new company, as termination is very difficult.

• FCPA Regulations

Pay attention to the Foreign Corrupt Practices Act (FCPA). Last year legislation was introduced in Brazil designed to require Brazil to comply with international agreements for combating bribery. This legislation is designed to bring Brazil directly into the international mainstream regarding legislation to prevent bribery and corruption addresses civil and administrative liability for corporations for corrupt acts relating to Brazil’s national and foreign public administration.

Depending on the opportunity there are many doing business in Brazil. While Brazil offers a wealth of opportunities to prospective investors looking for international expansion, it is also a country beset with bureaucratic and cultural difficulties .It is imperative to do your homework in advance and take the help of a professional advisor, who can make your expansion easy by providing unlimited assistance in areas of significance like regulatory filing requirements, tax equalization expat, etc.

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A Look at the Change in VAT Rates and Corporate Tax in France

As part of a range of austerity cuts following the latest Euro currency rescue agreement, the government of France announced plans to impose a ‘temporary’ corporate tax surcharge of 5 percent for 2012 and 2013 for large companies. The French government also plans to increase the 'reduced' value-added tax (VAT) rate of 5.5 percent to 7 percent, with certain limited exceptions. The move is part of France’s second austerity package designed to increase corporate tax revenue and reduce government expenditure and debts. It is said that the extra cuts make the 2012 budget one of the toughest since 1945.

What are the New Corporate Tax Proposals?

The corporate tax proposal mainly focuses on two measures that would affect business taxpayers. A temporary 5percent surcharge on corporate income tax would be implemented in 2012 and 2013 for companies having an annual turnover of €250 million or more. The “reduced VAT rate” which is currently at 5.5 percent will be increased to 7percent for all goods and services (with an exception to food and certain goods/services provided to disabled persons).

Tax proposals for Individual Taxpayers

The French government also introduced an exceptional 4 percent individual income tax on taxpayers with income of €250,000 or more if single and €500,000 or more for qualifying couples which is currently being considered by the French Parliament. Some of the proposed measures concerning taxation of individuals, if enacted, would increase the individual income tax 'flat rate' that applies for dividends and savings income from 19 percent to 24 percent.

Take the help of an expert

When doing business overseas, the last thing any organization wants to do is to pay your hard-earned profits as unnecessary taxes, especially in the current economic climate. It is best to partner with an expert to help simplify the process and overcome any challenges in taxation. A business consultant will have a  complete up-to date information on how to keep up with the ever changing laws pertaining to expat tax, global transfer pricing, regulatory filing, to name a few. A dependable professional partner in an international expansion can help get rid of any concern regarding your overseas expansion project, thereby allowing you to focus on building your business.

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Pointers for International Business Expansion in Qatar

Malta has a booming industrial sector with more than 400 locally and 200 foreign owned manufacturing companies. The workforce is highly trained, flexible and multi-lingual and ensure that the country has competitive advantage owing to its high quality production at expenses that are extremely competitive. In addition to that, Malta provides transportation infrastructure, a state of the art telecommunication system and air links to North Africa, Europe and other Middle Eastern destinations. Furthermore, Malta has a strategic location, being at center of Mediterranean and has access to Freeport markets and harbors that makes it an excellent manufacturing base.

Why expand your business internationally to Ireland?

The primary reason for international business expansion in Malta is its advantageous location that places it in close proximity to the Middle East, Africa and Europe that renders it favorable fiscal conditions and a vast talent pool. The biggest advantage of setting up or expanding your business internationally in Malta comprises of specialized services that are cheaper than other parts of Europe. Furthermore, there are lesser delays for company registration processes and lucrative tax rates. Malta is highly appropriate for English speaking investors, as the language is official in the country and is spoken widely in the entire Maltese community.

What are the prospective business opportunities?

Prospective business expansion scopes in Malta include exports and manufacturing. All products that are manufactured in Malta are exported worldwide. They comprise of the electronic components, semi conductors, medicinal, plastics, rubber, pharmaceuticals, sub-assemblies, software, food products, garments, machinery and fabricated metal products.

Do you need the help of an expert?

Entrepreneurs who are looking forward to expand their business internationally to Malta have realized the importance of an expert consultant who would assist them to look into different aspects of business expansion that might be overlooked otherwise. For example, a consultant might point out the requirement for an internal audit compliance as an essential tool to manage efficiently worldwide risks that a business might witness. In the same way, other essential aspects to look into are the eu vat rules and transfer pricing audit. 

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Understanding the Changes in the Expat Tax Regime in Netherlands

With proposals to amend the Dutch expat tax regime, the Dutch State Secretary for Finance announced that changes would be made to the ‘30% ruling regime’ for expatriate employees in the Netherlands. The amended regime will entitle qualifying expats to a net tax allowance of up to 30% of their total remuneration and the changes are expected to come into effect in 2012. Expatriate employees in Netherlands, working on a temporary basis can avail of “the 30% ruling regime”, resulting in a 30% tax free employment income in their hands. This provision was introduced by the Dutch Government to compensate them for specific expatriate costs.

On 20 September 2011 the Dutch Government presented the 2012 Tax Plan, which includes proposals to amend the Dutch expat tax regime. The amended regime will entitle qualifying expats to a net tax allowance of up to 30% of their total remuneration. The changes are expected to enter into force as per 1 January 2012.

The current conditions for application of the ruling are:

For a non-resident taxpayer hired abroad by an employer resident in the Netherlands:

• The employer must be obliged to withhold wage tax;
• The employee must possess specific expertise which is not easily available in the Dutch domestic labor market;
• Specific expertise is determined by a combination of the following conditions:
• 
  (i)The employee's level of education;
• 
  (ii)The net salary range with regard to the employment in the Netherlands compared to that in the expatriate's country of origin; and
• 
  (iii)The employees must meet the required work experience with respect to the specific employment. If the expatriate possesses experience of at least 2.5 years in a comparable employment, the experience criteria are deemed to have been met.

If the condition (iii) is not met, they could still qualify for the 30% ruling, if conditions (i) and (ii) are met.

Duration
The duration of the 30% ruling regime is of 120 months, which commences from the date of employment in Netherlands. This time period could be reduced if employment or stay in the Netherlands has been terminated within a period of 15 years before the start of the new employment and provided the employee was appointed or residing in the Netherlands 10 years prior to being hired.

Proposed Changes

• Expertise - the employee needs to possess specific expertise, which has limited availability in the domestic labor market; will be deemed to be met if the employee earns a minimum salary;
• Time Period - the period which is taken into account for a reduction of the duration of the 30%-ruling will be increased from 10 to 25 years;
• Place of residence - Employees living within 150 km from the Dutch border are no longer entitled to the ruling;
• Education - Younger employees, who started work after undertaking Ph.D. studies in the Netherlands, can apply for the 30% ruling.

The minimum salary required to meet the special skills criterion under the 30%-ruling is set at EUR 50,619.
Expatriate taxation is very important for any international business expansion, and any kind of neglect could cost the company a heavy price. As the expat tax system varies in each country, taking the help of an expert will help in understanding the system of a country and avoid any unnecessary expenditure. A professional business consultant can provide the necessary guidance on tax equalization expat, etc.  and ensure that your international business project a successful one.

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The Essentials to Consider Before Expanding Your Business to Ireland

The well-developed infrastructure combined with competitive operating costs, low corporate taxes and financial incentives make it one of the most lucrative places in Europe for foreign investment. Being an abiding member of the EU and having an economy expanding at a regular rate, Ireland is one of the most preferred locations for business in Europe. Having favorable tax environment, competitive operating costs, a productive, well-educated and versatile workforce, and a well-developed infrastructure with outstanding support services, the Irish government has a made it an attractive place to expand your business.

Understanding the economic climate
With financial incentives in the form of tax credits for investors and good infrastructure, Ireland has a thriving economy. It has a contemporary economy with a growth that is averaging at six percent.  Agriculture used to be the most important sector in Ireland, but this has now been overshadowed by industry and services. Mainly because of its size, exports in Ireland are a major part of the economy that is dominated by foreign multinationals. The exports now account for almost three quarters of the national output. The best potential for growth are in Chemicals and pharmaceuticals/ biopharmaceuticals, E-commerce, Information and communications technology, Software, Internationally traded services, including financial services, Medical devices, Construction, Energy, Environment , Food and drink, Healthcare, Transport  etc

Government Incentives
From an incentive regime to a single low-rate, the taxation policy for businesses is presently being changed. Ireland has a single low-rate tax on trading income of 12.5 percent, following discussions with the European Commission.  This rate applies to income from all business activity and creates many new opportunities for foreign businesses. Incentives are also available to inward investors in the form of tax incentives and financial aid. Financial assistance is administered by various government agencies. Grants are obtainable for manufacturing and internationally traded services, with the IDA having the capacity to offer monetary aid in the form of capital and employment grants for new business.

Taking the help of an expert
While expanding business overseas, it is always good do a thorough market research. Although Ireland is one of the easier countries to expand into, taking the help of an expert can no doubt make things much smoother. A reliable partner can offer specialist expertise advice on the overall operational, administrational and executive aspects of your business, be it legal, HR, Payroll, international accounting or expat tax advice.

Also read on -  sas compliance, expatriate tax advice

Expanding Your Business to Switzerland? What you need to know

Switzerland has almost been forced to build its wealth on foreign trade as it has really has no resources, but only has a limited surface area. The Swiss economic policy is based on the principle of free trade and industry guaranteed by the Federal Constitution, with low import duties and only a few import quotas. Most Swiss manufacturers are dependant on foreign markets to make investments in research and development worthwhile.

Is it viable to expand to Switzerland?
Switzerland has a sophisticated and amenable business culture and wealthy, discerning populace. There are many business opportunities here for companies that are interested in expanding business overseas. Switzerland has a high export rate when compared to other countries, in terms of the percentage of GDP. As it has a small domestic market, there is a large dependence on foreign markets.

Economic Overview
Switzerland has the second highest European rating after Ireland in the Index of Economic Freedom (2008). The World Economic Forum's Global Competitiveness Report currently ranks Switzerland's economy as the second most competitive in the world. It has private sector economy and low tax rates by Western standards, and when compared to the other developed economies, the overall taxation here is the lowest.

The main business opportunities and important cities here
Switzerland is one of the world’s largest per capita food importers, with sectors growing in convenience foods, ethnic foods and organic foods. It also maintains a leading position in medical and pharmaceutical products. Switzerland is home to many highly skilled 2nd, 3rd and 4th tier suppliers, mainly to the German but also to other multinational automotive companies or manufacturers, and importance in going green coming from many states and governments now, eco friendly and organic chemicals are a growing industry here. Zurich, Bern, Geneva, Basle, Lausanne are some of the main cities worth considering when expanding here.

The challenges a foreign investor may face
With regard to the institutional framework and economic environment, Switzerland still faces some challenges. There could also be challenges in the other forms like trade barriers in certain sectors, lack of mutual recognition of foreign standards, a half-heartedly liberalized domestic goods market, and still far too many difficulties in hiring qualified foreign labor, etc. It could also include bureaucracy in the public sector too.


Taking adequate measures to overcome the challenges
Before expanding you business to Switzerland, it is necessary to research your chosen location, your target audience and potential growth of your chosen market. Business etiquette in Switzerland is the key to building the right kind of relationships. And this can be achieved by taking the help of a reliable business partner. You can find global expertise on all areas of business, be it HR, legal, finance, international financial accounting or regulatory filings. With large investments involved, you want to opt for best when choosing expert who can guide you in your international expansion. Your business can be made a success.

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Key Elements to Consider Before Expanding to Luxemburg

Being one of the richest cities in the world, Luxembourg is home to the European Investment Bank and is and is an attractive place to consider for a business expansion. What attracts entrepreneurs who are interested expanding here are its high-income, stable economy and low unemployment and inflation. Luxemburg is also a founding member of EU, NATO and UN, and has a highly developed economy with one of the highest GDP per capita in the world. Although the majority of the country’s output is accounted by the banking and financial services, there is a tremendous reliance on international trade, mainly due to the size of the country.

The main areas and cities for Business
The main areas for growth in business opportunities are finance, consumer goods, technologies, media technologies, etc. A well planned and researched business plan can help a business to obtain credit from a bank in Luxemburg. There is also a participation fund for small to medium sized enterprises (SME) and the self employed who are interested in getting finance for their business. Due to the size of the country, Luxemburg does not have too many cities, although there are a few like just a few Luxembourg, Esch-Alzette, Differdange, Dudelange, Echternach, which are good locations to conduct your business.

Taxation in Luxemburg
Taxation in Luxemburg can be quite high. Companies are subject to the Communities Income Tax (IRC). There is also a surcharge of 4 percent that is payable to the unemployment fund. At an average of 7.5 percent, there is a municipal tax that is also levied. Additionally there is a municipal commercial tax (ICC) that is applicable to commercial, industrial, mining, and craft entities established in Luxembourg at a rate of 3 percent. The VAT is the least in the EU, which is at 15 percent.

Challenges Foreign Companies Face
When expanding business overseas it is important to plan ahead and beware of the potential pitfalls. Before expanding your business, it is vital to do a thorough research of the market place. It is not always possible to be prepared gain a complete understanding of the laws of another country and therefore make sure you have a smooth transition. To get advice on the overall operational, administrational and executive aspects of your business, it is best to take the help of a professional. A business expert can give you all the essential help to follow the legal norms and fulfill all regulations in your business expansion right from international financial accounting to regulatory filings to taxation.

Read more on - Expat tax advice