Registering an entity in another country can be time-consuming and complex. When you don’t have the necessary legal expertise, you risk incurring major penalties for mistakes or choosing the wrong structure for your long-term goals and wasting money in the process. At Safeguard Global, we understand the intricacies of entity setup and are ready to help you navigate the complex web of international labor laws and requirements.
We spoke with Linda Lim, Senior Director of Client Services at Safeguard Global, to understand exactly how we can help you set up the right entity for your specific business needs.
Walk us through the entity setup process when you work with Safeguard Global.
We start with a call to discuss crucial details related to the need for an entity, like the country of implementation and estimated headcount, and we offer guidance to help you select the right entity for your business. We provide a checklist of every document and piece of information we need to get the entity process started with the local authorities, and we arrange weekly check-ins to answer questions as the process moves along.
Here are some examples of the types of documents we ask for:
- Basic company information
- Resident Director information and passport copy (if required)
- Address and proof of address
- Shareholder names and information
- Notarization for applicable documents
How long does entity setup take with Safeguard Global?
Typically, entity setup takes 30–45 days. The timeline largely depends on how quickly our clients deliver the necessary information to us, and how fast local authorities respond. After that comes tax registration, which takes 4–6 weeks, depending on the country. You can’t hire or do business without this crucial second step, so to be fully operational takes 2–3 months in total.
How does Safeguard Global simplify entity setup for our clients?
We take on everything from administrative responsibilities to interacting with local authorities on your behalf. We act as a facilitator, ensuring you know what you need to provide and that you’re compliant with local laws so you can spend time on your core business. Lately we’ve noticed more clients choosing to incorporate in Brazil, Colombia, Mexico, Denmark and Finland. Each of these countries has its own unique requirements for setting up an entity, and our team is well-versed in all of them. We can also tell you if you’ll need a resident director or resident officer. That’s an individual who resides in the country where you plan to operate who serves as your company's representative on the ground.
How do clients decide which type of entity they need?
Safeguard Global can provide expert guidance about which entity is right for each client. We tailor our recommendations to align with your growth objectives and risk tolerance. Here’s a quick breakdown of each entity type:
Representative office
- A bare-bones entity used primarily for administrative operations
- Parent company assumes full liability
Branch office
- An entity that’s an extension of the parent company
- Unlike a representative office, it can be used to conduct business in-country, but it usually requires a citizen or permanent resident to complete the registration
Limited Liability Company (LLC aka subsidiary)
- Operates and conducts business in-country as a separate legal entity
- Often requires an in-country representative e.g., Resident Director for registration
In many cases, our clients opt for an LLC due to its lower risk profile that shields the parent company from legal liability. No matter which type of entity is right for you, we’re there to guide you and be sure everything is submitted correctly to the local officials.
Why is Safeguard Global the best partner for setting up your entities in other countries?
Our comprehensive services set us apart. After entity setup and tax registration, we offer payroll and accounting services, including vendor invoicing and tax collection and payment.
Some countries, such as Brazil, China and Mexico, require the use of a local organization and/or documentation in the local language. Finding all of these services under one roof is difficult, and our one-stop-shop approach means you won’t have to engage multiple vendors like law practices and accounting firms to get up and running. Depending on which services we provide after setup, we might work with a client’s legal counsel, their CFO or finance department representative, HR and/or accounting.
Give us an example of a successful entity setup.
Our clients span a variety of industries and geographies. In our Global Peerspectives series about real-world international expansion, Mithin Kumar, General Manager of Poshmark India, shares his story of a successful entity setup. Poshmark is an online marketplace where you can buy secondhand goods like clothes or home goods, and the company partnered with us to establish an entity in Delhi, India. Poshmark had been working with Kumar and his team on app development. Rather than acquiring Kumar’s company, Poshmark realized it would be better to establish an entity in India and hire Kumar and his team directly. That’s when the company turned to us for help.
“Setting up our India entity was very easy for us, considering (Safeguard Global) had done this for multiple companies in the past, so they knew exactly what was supposed to be done,” Kumar said. “They did all the paperwork for us. We just had to review and sign all the necessary documents, and so it wasn't really painful for us at all."
Poshmark India’s experience is very common. What our clients like about working with us is that we take the majority of the work out of their hands, and since we are familiar with laws and regulations in roughly 200 countries, the entire process is very efficient.
What services do you offer after entity setup is complete?
Once the entity is set up, we offer annual compliance updates to keep you up to date on local laws. If you partner with us for accounting services, we also file annual tax returns and update any changes in address for you. If your strategic objectives change and you need to close down operations in a country, we also offer support during the liquidation process. This is notably more intricate than the initial setup and typically takes six months to a year.
Expanding operations internationally with Safeguard Global
In the complex landscape of entity setup, Safeguard Global can be your trusted partner, ready to simplify the process so you can avoid risk and reach your expansion goals.