Subsidiary company abroad

[JCKST1]

Hi guys


Quick question, I am in the early stages of looking at opening a Subsidiary company within the EU. Its a long story but due to supplier problems it will be beneficial to have a subsidiary company/branch outside of the UK for stock to go to, we can then distribute from there or send to our branch in the UK for sale like normal.

I am in the early stages of talking to my UK accountant and arranging an appointment later this month with one over seas but my query is regarding the name of the branch abroad. Does it have to have the same name as the UK company and same director?

My other half works for the company but not as a director my plan would be to put the branch/Sub in her name and hopefully change the name so its different from the UK company. Does anyone know if this is possible?

[anonymous-user]

JCKST1 said:

Hi guys


Quick question, I am in the early stages of looking at opening a Subsidiary company within the EU. Its a long story but due to supplier problems it will be beneficial to have a subsidiary company/branch outside of the UK for stock to go to, we can then distribute from there or send to our branch in the UK for sale like normal.

I am in the early stages of talking to my UK accountant and arranging an appointment later this month with one over seas but my query is regarding the name of the branch abroad. Does it have to have the same name as the UK company and same director?

My other half works for the company but not as a director my plan would be to put the branch/Sub in her name and hopefully change the name so its different from the UK company. Does anyone know if this is possible?

Whoever owns it can call it anything it wants.

If it is a subsidiary of the English co, then then English co will own it - meaning the English co will own the shares in the foreign co. If your other half owns the shares in the foreign co (which is what putting it "in her name" suggests you're thinking) then it won't be a subsidiary of the English company. It will just be a foreign company owned by your wife.

Most countries have a system of law that means that the shareholders in a company appoint and can remove the directors of the company. So the identity of the director(s) of the foreign co is down to whoever owns the shares in the foreign co.

[Stupeo]

Depends on the local government regarding the name, directors, shareholdings etc.

I've just opened an Indian Subsidiary for our business and it took us a while just to get approval for the company name! There was also some restrictions on directors and ownership laws, especially for a company that is majority owned by a foreign entity.

Thanks,
Matt

[JCKST1]

Thanks guys.


I have spoken to a couple of accountants (one in Spain and one in Poland) regarding this, Poland is a cheaper option but there is problems with buying/selling excl VAT whilst being a sole trader. Spain is slightly easier but you have a 280euro per month self employment bill which isn't exactly ideal. Still on the look out and will consider other options providing there is good transport links to the UK and easy/reasonable set up and maintenance fees of a company.

[KevinCamaroSS]

JCKST1 said:

Thanks guys.


I have spoken to a couple of accountants (one in Spain and one in Poland) regarding this, Poland is a cheaper option but there is problems with buying/selling excl VAT whilst being a sole trader. Spain is slightly easier but you have a 280euro per month self employment bill which isn't exactly ideal. Still on the look out and will consider other options providing there is good transport links to the UK and easy/reasonable set up and maintenance fees of a company.

In this post you are talking about 'sole trader'. A sole trader is not a 'company'. Which scenario are you actually talking about?

[JCKST1]

I did initially think a sub company would be the best option however looking in to it a sole trader set up (VAT registered) would work and be cheaper to maintain compared to a company.

[anonymous-user]

Lots of countries require a majority of directors to be nationals, and or residents, check.

[KevinCamaroSS]

Berw said:

Lots of countries require a majority of directors to be nationals, and or residents, check.

This. Many countries will also not allow a foreign national to be a sole-trader (if such a legal identity exists) if not resident in the country.

[StevieBee]

KevinCamaroSS said:

Berw said:

Lots of countries require a majority of directors to be nationals, and or residents, check.

This. Many countries will also not allow a foreign national to be a sole-trader (if such a legal identity exists) if not resident in the country.

Double this! All EU countries require - as a minimum - 51% of company ownership to be held locally, as in; by a national or national body. You can set up a sole trader business but the sole trader would need to be domiciled in the country. At the moment, there is no restriction on the nationality of the sole trader but this is highly likely to change after the end of March next year.

It sounds to me that you are simply to looking to set of a business of convenience rather than a growth-based enterprise. That being the case, might be worth you looking at something called a European Cooperative Society (sce). This is a business platform that enables two or more entities (corporate or individuals) to create a new business but combining the financial credentials of each with physically merging. It's also relatively simple.

Do be prepared for a lot of faffing around. You will need to prepare many documents, copies of registrations, all of which will need to be notarised.

A good source of free help and advice is your local Department for International Trade rep.

And if you're looking for a country, I would recommend you head east. All of the former eastern block countries are very keen to build their commercial offering so are incentivising foreign investment greater than say, France, Germany, etc.

HTH and Good Luck