Foreign Companies

It has become increasingly important for local companies to tap into resources internationally, be they technical skills and knowledge, financing, raw material, as well as to build networks that would facilitate the exportation and importation of goods. The role of the internet in global trade has been vital in facilitating these networks through communication.

Foreign companies are legally identified under various names in different countries, such as Foreign Corporation in the United States, Overseas Company in the United Kingdom, External Company in Barbados and Foreign Company in many other territories. Just of special note, the Barbados Foreign Sales Corporation is different from the external company and operates under the island’s low tax offshore system and engages solely in foreign trade transactions. An external company, can however, eventually apply to be considered and treated like a Barbados Foreign Sales Corporation should there be a change in business activity, is permitted to operate as such by the country or state of incorporation and becomes licensed under the Barbados Foreign Sales Corporation Act, 1984.

Offshore corporations are tax exempt business companies. In some offshore tax havens offshore corporations are fully exempted from all local taxed on revenue earned internationally. Dual citizenship programs have several advantages. We assist with Dominica economic citizenship and St. Kitts and Nevis Citizenship-by-Investment which have very specific aims that are mutually beneficial to second citizenship candidates. These are to stimulate investments in the Dominica and St. Kitts real estate sector and accumulate donations for diversifying the sugar industry through the Sugar Industry Diversification Foundation (SIDF). Grenada citizenship program was intended to offer similar benefits and opportunities. Dominica second passport system is well regulated. Applicants of the Second Passport Program in Dominica who are given Dominican passports are persons who have a successful interview with the designated second passport issuing team in Dominica. Several years ago, the Grenada Citizenship Program was operational but was stopped indefinitely. A citizen of Dominica will travel freely to Caribbean countries as holders of Dominican passports.

The laws governing foreign companies may differ in some ways in that some may be stricter than others, while others may provide a larger degree of flexibility and more capacities in terms of the legal actions and legal forms that foreign companies may take. Fiscal requirements for foreign companies may also differ and may be partly influenced by governments’ policies on foreign entrepreneurship and investment in their respective countries. As such, foreign companies may be extended grants, tax relief and other exemptions on import and export charges that would help lower overall operating costs and encourage continued business and employment in the territory.

Flexibility in laws for foreign companies may include provisions for these entities to be able merge and consolidate with local or other companies that are registered and incorporated under the local legislation, or to continue into or out of the jurisdiction. Empowerment by local legislation, depending on the provisions granted, gives foreign companies and investors a greater sense of security, freedom and reduces restrictions that may stifle the ability of a foreign company to grow even beyond the borders of the country or state in which it operates. In other words, foreign companies should be comfortable and at a certain extent of liberty to leave or dissolve in accordance with legal requirements if they no longer feel comfortable operating in a given location due to various factors, inclusive of change of government and the introduction of new (disadvantageous) policies, unanticipated tax hikes, civil unrest, irreparable damage and loss resulting from natural disasters, or disappointment in the undertaking as not having satisfied its objectives and purpose.

Proper regulation of foreign companies while creating an attractive business and investment environment that is mutually beneficial to the country, its citizens and foreign investors can have positive domino effects. By being enable to generate significant profits, foreign companies are able to repatriate profits, offer increased incentives and better working conditions to their employees and governments would be able to augment revenue from taxes or other fees, all of which help increase cash flow in one way or the other. But the proper regulatory mechanisms must be implemented and functional so that a situation where foreign companies thrive at the expense of the people and government of a country does not arise.

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