Establishing Foreign Companies with Clarity

Enhancing understanding of KYC/AML regulations

Establishing a presence in a foreign jurisdiction can be difficult, without the right help and guidance.

International anti-money laundering (AML) rules mean that full customer due diligence is required on companies or trusts – including shareholders, directors and any persons exercising control over the structure. Added to that, banks have seriously tightened up compliance with AML rules, requiring full oversight of ultimate beneficial owners (UBOs) and the source of any funds held in a newly-opened account.

Cultural changes towards compliance-driven objectives will be a key priority for those jurisdictions who have yet to fully comply with international objectives in this area but wish to avoid their reputation being tarnished by high-profile scandals similar to the Panama Papers or the Paradise Papers. This will inevitably make establishing a foreign presence even more difficult.

In addition to overarching international parameters, most developed jurisdictions also have multiple domestic regulations that need to be adhered to around company formation, the establishment of bank accounts and tax structuring.

The upshot is that it is extremely difficult to move forward in this area without the help of an experienced corporate service provider (CSP), resident in the foreign jurisdiction of choice. They will smooth the process, ensuring unnecessary delays are avoided and regulations and laws are adhered to.

Reliable corporate services providers remain one step ahead of regulatory changes and are able to offer a range of effective services over and above the initial tasks requested of them.

If the appropriate level of trust is developed between investor and CSP, those services can prove extremely effective and cost-efficient, particularly during the initial phase of establishment. CSPs can operate client trust accounts (CTAs), moving money on behalf of clients – or act as nominee directors and shareholders, giving clients a legal presence and a registered address in the chosen jurisdiction.

Many CSPs also offer a private client service, including financial administration and reporting, financial audit and internal control, payroll services, corporate governance matters and bank account management. This might also include discretionary management of assets or the creation of specialised trusts such as protected cell companies to enhance asset protection.

The conclusion might be that not only are CSPs critical to establishing a presence in a foreign jurisdiction, they are also crucial in maintaining that presence amidst changing regulations, cost pressures and inefficient bureaucracies.

In this discussion, you will hear from eight experts incorporate service provision. Each will highlight the ways in which they can help clients and offer details on the benefits and challenges of establishing a presence in their jurisdiction. We consider specific AML and KYC laws, the balance between regulatory and business-specific risk and examine the role of trust in increasing the effectiveness of the CSP offering.