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Thread: Creating a company from outside the U.S.

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    Default Creating a company from outside the U.S.

    What are your thoughts on (legally) creating and basing a company outside of the U.S. for tax and manufacturing reasons?

    I am considering starting a Chinese business in order to cut down costs and taxes, etc.

    Thoughts?

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    Diamond Member Corzhens's Avatar
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    Default Re: Creating a company from outside the U.S.

    My husband had worked for a software house organized and established by a Japanese in the Philippines. The main client is that Japanese's company in Japan who gets the projects, mostly programming work, and pass on the project to the company here in the Philippines that they pay so little. That is a good outsourcing trick because they had saved a huge amount considering that labor is expensive in Japan, much more the skilled people like programmers and systems analysts. They also saved a lot in taxes because they pass on the taxes here in the Philippines thereby somewhat freeing the Japanese company of the tax burden.

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    Default Re: Creating a company from outside the U.S.

    I think it is a perfectly reasonable decisions since as a business owner your main goals are to spend as little as possible and make as much as possible off of your investments. If proper plans are laid out and possible challenges can be for seen and minimized then I think it would be a wise decision. Personally I don't think it would make much sense to risk more than what you have to as long as you can assure yourself that the alternative path is manageable.

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    Default Re: Creating a company from outside the U.S.

    I wouldn't take it in a so positive side. Yes, some business does it, but you also got to be under other laws that you control less, know less, and where your lobbying is less present. Finally, the management of outsourcing is more complicated without many contacts.
    While doing something outside of US isn't necessarily bad, it depends of what you do, of the transport costs, on the environmental costs that, sooner or later, you will either pay or have to pay, the taxes you pay at customs rather than the one you pay in country. Many peoples goes through a gray area and can be profitable, but it is a gray area. If ever, someone finds something unfair here, you will have to adapt. So think about it, it is not only good things.

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    Default Re: Creating a company from outside the U.S.

    I have never been a fan of it. I am an American, so really, it would be counter-intuitive of me to create something that is outside of my homeland(which is where I currently live).

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    Default Re: Creating a company from outside the U.S.

    Quote Originally Posted by AtlantaSports View Post
    I have never been a fan of it. I am an American, so really, it would be counter-intuitive of me to create something that is outside of my homeland(which is where I currently live).
    Well, if you are going to cover the United States, yes, the dilemma seems pretty simple when you already have an opinion on it and it is not driven only by money in the short term. But in complex cases it gets...obviously, more complex.

    What case I case think about is a company that has to make deliveries across North America, Europe and Australia. How the company should handle it? The company can manufacture the final produce in-land at US, and then deliver the product directly via boat or plane to Europe & Australia. But environmentally-speaking, and in the cost perspective for, you are doing the thing really wrong. So, what you got to do?

    If you export high volume, you would better manufacture some parts in the US, and then finishes them up in Europe & Australia, and these parts would be chosen to take the less space possible. This is the case for example with bottle of any drink, where they'll rather give the plastic and the drink inside a kind of "tank" so you pay less for delivering more bottles, so you avoid round trips and the environmental impact is less bigger.

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    Default Re: Creating a company from outside the U.S.

    I am sort of half and half on the situation. My job outsourced after reassuring us that the new office that was opened in Dominican Republic would not effect our jobs 5 months later we all got laid off. On the other hand as an aspiring business owner I do understand the cost factor. So I do understand and see both sides to it.

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    Default Re: Creating a company from outside the U.S.

    @mscaver86, the primary reason of putting up a company in another country is to avail of the cheap labor. So you can expect some employees to be laid off in favor of the outsourced in that other country. On a business point of view, it is a good move since the company will be on the advantage. However, the sense of nationalism seems to be waning since the number of hired employees abroad may be equal to the number of employees laid off in the mother company. It is happening since a long time ago. One company is Marks and Spencers of London with factories in Thailand.

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    Default Re: Creating a company from outside the U.S.

    Quote Originally Posted by kirachan View Post
    What are your thoughts on (legally) creating and basing a company outside of the U.S. for tax and manufacturing reasons?

    I am considering starting a Chinese business in order to cut down costs and taxes, etc.

    Thoughts?
    well, what business are you running ? or want to set up in china. i am chinese with over eight years experiences in foreign trade.
    we can talk about this topic
    thanks
    Cassin

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    Default Re: Creating a company from outside the U.S.

    Quote Originally Posted by mscaver86 View Post
    I am sort of half and half on the situation. My job outsourced after reassuring us that the new office that was opened in Dominican Republic would not effect our jobs 5 months later we all got laid off. On the other hand as an aspiring business owner I do understand the cost factor. So I do understand and see both sides to it.
    It really is unfortunate that these decisions have to affect employees but as you've mentioned it's just unavoidable sometimes. I think you have a great way of looking at things though and surely it will be a very helpful tool for you in your career since not all employees are able to see the bigger picture and see things from the perspective of the company.

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