Your chosen International Business Strategy can greatly affect the tax you pay.

If you are planning to establish an international business, it is important to get the right strategy from the start. You have choices over where you locate your head office or main administrative centre, as well as over how you operate in other countries.

You can choose to locate your business in any country, but as there can be advantages and disadvantages to all locations, a careful choice to begin with can save incurring unnecessary costs later. 

The UK is often seen as an ideal location for an international business, for reasons including:

  • The UK has a stable political and legal framework, including the tax system, allowing you to be reasonably certain that a structure that is good now, should remain so in the future.
  • The UK has relatively low rates of tax for businesses.

Research & development is significantly rewarded in the UK, so it is a great location for a core development part of the company, which then exports and sells internationally.

The UK has an extensive and developed system of double taxation treaties (DTTs) with other countries, so no matter which country you have dealings with you can be certain of the tax position that you will face.

Once you have developed your UK base, you are likely to start to deal with customers in another country. You generally have the choice to trade with that customer from an existing location, or to establish a presence in that country. By creating an establishment, it is likely that the profits arising in that establishment will be subject to local tax, rather than UK tax, under the terms of the DTT between the UK and that country. This may be beneficial in terms of tax rates, or in terms of other local administrative requirements

Tax Innovations has extensive experience of designing international business structures and assisting with their implementation. Our dedicated team of experienced tax advisors are ready to advise you on the ideal international business strategy, tailored to the needs of your own particular business.

If you would like more information regarding international business strategies and structures, please contact Tax Innovations on 01962 856 990 or customerservice@taxinnovations.com.

For an initial consultation please call us on 01962 856 990 or visit our contact page.