Manufacturing is the largest economic sector in the world, which is also one of the most important, directly and indirectly accounting for a large part of all economic activity and all jobs worldwide. It processes items and is dedicated to either creating new goods or adding value by producing finished goods for sale to customers or intermediate goods to be used in the production process. After the industrial revolution that began in Britain a few centuries ago, labour-intensive textile production was successfully replaced by mechanization and the use of fuel. Today, manufacturing creates jobs, technological development and an increase in international investment.
For this reason, some jurisdictions are leveraging manufacturing output and value-added exports to increase their operations, business performance and revenue, and to address the challenges and opportunities that manufacturers face every day in conducting their businesses.
According to Deloitte's 2016 Global Manufacturing Competitiveness Index, China, the United States, Germany, Japan and South Korea are ranked as the top five most competitive manufacturing countries in the world. These countries generate about 60% of global manufacturing GDP.
China Canada and its provinces compete on a global scale for investments that result in low production costs, low wages for factory workers, and the adoption of globally popular product mandates. As a result, there are some significant trends in Chinese manufacturing that can easily be highlighted. These trends include creating a globally competitive, expansive manufacturing business model, helping to create a competitive business environment for manufacturing in China and increasing sales in domestic and overseas markets. This fact can encourage start-ups to grow, invest and compete with other successful manufacturing companies.
United States The United States is successful in attracting investment in many of the world's most active industries, such as aerospace, auto assembly, pharmaceuticals, to name a few. The USA has signed an agreement with Germany to implement a dual vocational training program for the advanced manufacturing sector. US business policies focus primarily on technology transfer, sustainability, monetary control, and science and innovation, giving manufacturing companies (automotive in Detroit and high-tech in Silicon Valley) a competitive advantage.
Germany Germany retains a relatively high share of manufacturing exports. The country provides long-term support in government-sponsored science labs and national programs created to foster manufacturing innovation in areas such as solar and wind power and renewable energy (renewable energy sources accounted for 28% of the country's electricity generation in 2014). In addition to an energy revolution in the manufacturing industry, the country is striving to phase out nuclear energy.
Japan Japan has a technology-intensive manufacturing sector that dominates the global manufacturing landscape in most advanced economies. The country maintains manufacturing competitiveness as there is a close link between manufacturing competitiveness and innovation. Japan has strong potential to become one of the most advanced manufacturing jurisdictions in the world. The Robot Revolution Realization Council was established in the country in 2014 as part of the Japan Revitalization Plan, introducing infrastructure and energy resources for next-generation vehicles. Japanese companies account for 50% of the global factory robot market.
South Korea As the world leader in the manufacture of liquid crystal displays (LCD), smartphones and memory chips, automobiles, and the world's largest shipbuilder, South Korea is actively pursuing growth in free trade agreements with more than 50 countries. The country invests heavily in education and produces a large number of researchers every year. It is also known that supporting manufacturing innovation in South Korea with venture capital investments to boost high-tech startups is identified as a strategic priority.
In terms of political and civil liberties, Nepal ranks second. The citizens of Nepal enjoy partial freedom. While the majority of citizens in Nepal are able to exercise their free will to some degree, some political engagement may be restricted and certain population groups may be barred from certain freedoms or expressions of opinion. In terms of economic freedom, companies in Nepal rank fourth. The citizens of Nepal are considered to be largely restricted when it comes to their economic decisions. The government has complete control over the majority of businesses and there is a high level of corruption in the economy. For these reasons, this country is considered unsafe for foreign investment as lenders may not have full control over their own financial decisions. In terms of journalistic freedom, Nepalese media ranks 3rd. In Nepal, journalists face a difficult situation. Censorship is widespread and media not favored by the ruling authorities can be banned.
Material matters are becoming increasingly difficult for tax purposes in Europe and globally, therefore some clients may prefer a stronger physical presence at the place of exercise than virtual office services. One of the possible strategies for increasing substance is the establishment of a functional office. Content issues usually arise when local tax authorities require confirmation that the company's operations are taking place in the country where the company is registered: they want to see that commercial activity actually exists in the specified jurisdiction.
A company of substance is a company abroad that resembles a classic “offshore” company but has what is called “substance” (presence), i.e. a business, in other words – an administrative office. It's more like a real local company but has ties to the onshore business.
For more and more entrepreneurs, the economic substance of their company is becoming too much for them. Creating economic substance has become quite the gamble as tax authorities, banks and government institutions delve ever deeper into the two main questions: 'Where is the real place of governance and control of the company?' and 'Who is the beneficial owner?'
Confidus Solutions can offer Substance Office in various jurisdictions worldwide including numerous famous offshore jurisdictions. However, considering the complexity and efficiency of content delivery, we would strongly recommend considering the following jurisdictions as your first choice: Latvia, Cyprus, Lithuania and Hungary - as we can offer more advanced services in these states instead of just a virtual office, as well more solid reasons to believe that the company operates in the specific location. The question of the actual place of management and control of the company has recently become not only for tax authorities, but also for business partners, suppliers, banks and opponents due to the implementation of interstate tax legislation and the rapid development of international trade and online trade of crucial importance.
Administrative office in Cyprus Administrative office in Latvia Administrative office in Bulgaria Importance of economic substance Establishing economic substance in a registered jurisdiction can be critical to verification by local tax authorities. However, the process of creating substance must be carefully evaluated beforehand, as under certain conditions it can run counter to your initial goals and business structure. The substance needs to be addressed in order to avoid a higher tax burden on your business and to avoid major tax disputes with your tax authority.
Corporations have relied on “offshore” or non-resident structures for many years to reduce or defer taxes and improve returns for investors. This is particularly popular with private equity and real estate structures. But increasingly, and particularly within the EU, tax authorities are demanding more if the reason for tax non-resident status and/or local tax exemption is to be given. Usually "more" is interpreted as having more substance and physical presence in the indicated jurisdiction.
Today there are still many structures that are set up in such a way that there is what is known as double non-taxation, meaning that there is no effective tax levied in either country on the total proceeds generated within the structure. The primary goal is to prevent the granting of treaty benefits to international corporate structures that are only geared to the advantageous conditions of the applicable double tax treaty.
When there is an advantage in having a substance Having substance is an advantage if you are contemplating the formation of an offshore or onshore entity and want the highest possible protection in terms of recognition by international and local tax authorities. To avoid problems, your international corporate structure must be set up as an actual and "real" corporate structure.
Based on the actual role the company plays in your worldwide structure, there must be a relevant level of "real" activity. In practice, this means, for example, that the registered office of the company should not be the same as that of hundreds of other companies and the director of the company should not be the director of hundreds of other companies at the same time. That means your company address should at least be unique and the managing director should have a real function in the company.
Once a foreign entrepreneur has decided to invest in Ireland, he or she can either start a new business or buy a shelf company. Shelf company, also known as readymade company, is a legal entity that has been previously incorporated and is on a shelf ready for immediate purchase.
There are basically two types of shelf companies. They may have different names, but the main idea is that the first type of shelf company is clean, meaning that no transaction has ever taken place in this business. The other types of shelf companies tend to be older and have operating histories. While the investor must exercise caution before acquiring an aging shelf company and do their due diligence to avoid buying a company with debt or other liabilities, there are various advantages and reasons why investors should choose a shelf company, which is active operated some time ago.
One of the main reasons investors may prefer acquiring a shelf company to forming a new legal entity is the time difference between the two processes. When starting a new business, an entrepreneur must go through a complex and time-consuming process, while a shelf company has already been formed, allowing business to begin almost immediately. Generally, new shareholders in Ireland can obtain a company number in as little as 24 hours or even on the same day. Another important advantage is the additional credibility with suppliers and customers, if a company was founded not recently, but a long time ago. If you are a sole proprietor or in a past incorporated partnership with a legal entity, you may also receive tax planning benefits.
Process of acquiring a shelf company in Ireland If you are buying shares in a shelf company in Ireland you must notify the Companies Registration Office. While the share transfer process is similar to incorporation of a new company, it requires significantly less time and documentation and the company can be used immediately. The new shareholders of the company must submit the share purchase agreement and, if the buyer is a legal entity, also an extract from the commercial register. The share purchase agreement must be notarized and the articles of incorporation must reflect any material changes such as
In general, the easiest way to acquire a shelf company, especially if you are a foreign entrepreneur, is through companies that provide such services. These companies acquire dormant businesses and hold them until someone is ready to buy them. They also form new companies for the same reason, but the main difference is that these shelf companies have never had any operations. The process is relatively uncomplicated and if in doubt, professionals are at your side and in a few simple steps you can acquire a ready-made company:
Find a company that offers shelf company acquisition services. Conduct due diligence on this company as you need to trust them with their research and ability to provide high quality shelf companies with no liabilities. Place an order and provide all the information required for the process. An official document allowing to act on behalf of the new shareholders must be signed. In principle, the service fee and the price of the shelf company must be paid before the documentation is processed. Your service provider transfers the shares to the new shareholders, changes the directors, secretary and registered address of the company and can change the company name if necessary. Some service providers also offer their premises for the registered company address. Typically, prices vary depending on the service provider and the quality and age of the shelf company.
The main function of a trust is to manage assets on behalf of their owner for the benefit of the beneficiaries. For this purpose, a trust may choose any activities it deems effective and advantageous, unless the relevant contract specifies otherwise. Some of the functions of a trust include:
Managing finances Managing investments Paying bills Accounting Preparing financial reports Distributing profits In addition, a trust can perform almost any other management function specified by the contract. Depending on the particular case, they may also offer financial planning, tax optimisation schemes and similar services.
Trusts can be useful to anyone who possesses considerable assets. Trusts are usually set up to secure assets and property and to optimise taxation. They also have inheritance applications: assets held in trust do not require probate as they are no longer part of the settlor’s estate, and so are unaffected by the contents of his/her will.