Legal English


Resident companies have smaller benefits than non-residents: resident companies usually have to pay taxes on income (income tax), a corporation (corporation tax), the authorized (stock capital) and exported capital (export capital), etc. . Non-resident companies are often exempt from all or part of such taxes and may be limited to a fixed annual payments to the local budget (local budget) zone.

The discrepancy between the concept of "resident" in different countries may lead to the fact that one and the same person gets this status in two or more countries. In some cases, along with the concept uses the term domicile or domicile (domicile), which can be defined as "the concept of tax law in some countries, which means the primary residence of a natural person." This is a somewhat narrow sense of the term, too close to the concept of "residence." In reality, the residence is primarily associated with the tax legislation, and domicile has a much broader legal implications. In addition, the domicile can refer to a legal entity. In contrast to the residence, a person can usually only be domiciled in one country. The company may be domiciled in the country where it is registered, but her residency, which is important for tax governed country, where the center of the control and management of the company. Either way, the dispute resolution is based on the domestic law of each country or on terms and conditions consistent with international tax treaties (international tax agreements).

It happens that the term "resident" as used in civil (civil law), commercial (business law, commercial law, law merchant, law of the staple, mercantile law) and other areas of law, does not match the value in the tax laws, even in within a country. Domestic business is very interested in the creation of offshore companies, since thanks to the liberal tax laws for foreign investors such firms benefit when working with foreign partners (foreign partners). The organization (floating, formation of, promotion of) an offshore company, in addition to tax benefits, you need to find out local regulations on the registration and operation of the company, including:

- What is the most preferred form of the company (usually a joint stock limited company (joint-stock company ltd.);
- Does the company have the right to do business in the area, and how this affects the taxation;
- Governed by a charter capital (stock capital);
- Minimum number of founders (promoters); whether they should be residents of the area;
- What is the procedure for conducting meetings of shareholders (general meetings) and their frequency;
- Requirements for personnel (staff) and the need of local registered address (legal address), etc.

The creation of offshore companies to Russian legislation does not. Along with offshore zones, there is such a thing as a free trade zone, or FTA (free-trade zones, FTZ), also provides certain benefits in taxation. They are understood:

- Regional groups of countries within which the free trade (duty free trade). An example is the European Community (European communities);
- Part of the territory of the State where the imported goods are exempt from customs duties (customs, custom duties) during their stay in the area until further handling, sale, re-export, etc. Usually, this is a special area of a major sea port, railway junction, airport or areas adjacent thereto. In FTA suppliers may postpone the sale of goods to the increase in demand and therefore prices, demonstrate products to potential wholesale customers (retail trade (retail sale) in the FTA, as a rule, is not permitted), modify it, etc. Range of benefits provided by the FTA in different countries, has significant differences. Some FTA national law allows duty free exercise: processing, import and export of goods, (re) sorting, packing, (re) packaging (re) labeling, storing and exhibiting at trade shows and other business operations (commercial transactions), such as in Spain. In Malta, the transactions in goods in the FTA limited to re-exports. In FTA Argentina Duty-free import only goods of foreign origin, which are designed for use in high priority sectors of Argentine industry.

The very notion of a free trade area is treated differently - in many countries it is not only used in the above sense, but also in relation to free economic zones or free economic zones, SEZs (free economic zones), covering the whole economic regions where entrepreneurs receive benefits that apply to investment , production of goods, labor laws, etc. Under the SEZ are areas or parts of the territory of the nation-state in which, for both foreign and domestic entrepreneurs are particularly favorable economic conditions: customs, rent, tax, currency, visa, work, etc. Objectives of the establishment of SEZ may be: strengthening foreign trade, increased foreign direct investment, accelerated development of new technology and management experience, reducing the cost of acquisition of imported equipment, expansion of production competitive in the world market of consumer and industrial purposes.

The number of BMS worldwide exceeds 200, and are located approximately sixty countries. The concept and status of SEZs in various countries differ from each other. This is evident even in the title: in Costa Rica, Zaire, Senegal, they are called industrial free zones (industrial free zones), in Jordan and Venezuela - industrial zones (industrial zones), in China - Special Economic Zones (special economic zones), in Kenya, Nigeria, Pakistan, Peru, Philippines, Taiwan - export promotion zones (export impact zones).

Different and the benefits provided by national legislation in EPZs. In Mexico, foreign companies located in the SEZ are exempt (in whole or in part) from import duties on equipment, spare parts and raw materials for a period of 10 years from the establishment of the company, if they produce goods that are not produced in Mexico. In Guatemala, guaranteed: a complete exemption from all import duties and taxes on equipment, tools and materials used in the SEZ, exemption from income tax (legal entity income tax), resulting from activities in this area for 15 years, exemption from property taxes in the first 5 years, and income tax (income tax) - 12 years. FEZ Turkey, in addition to customs and tax exemptions are allowed for the first 10 years of activity of the enterprises do not comply with legislation relating to industrial action (strikes), lockouts (lockout) and conflict (conflicts).

During this period, all conflicts are subject to review of the Supreme Arbitration Committee (General Arbitration Committee).