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How AI Is Fueling Creative Innovation for Startups Abroad
When most people think about starting a business overseas, their minds immediately jump to logistics: registering the company, navigating local laws, and finding office space. But one of the most exciting (and often overlooked) aspects of expanding internationally is tapping into the global pool of innovation especially in the realm of artificial intelligence (AI).
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Substance & De-offshorisation
The challenge The Organisation for Economic Co-operation and Development (OECD)is currently committed to a process called ‘de-offshorisation’ which, in real terms, calls for a complete dismantling of the offshore corporate sector.
In line with this initiative, the OECD has ramped up its Common Reporting Standards (CRS) technology and has sent committees to many small economies to push for the implementation of the global action plan on Base Erosion and Profit Shifting (BEPS).
These actions mean that countries that do not implement BEPS will be blacklisted. The fallout of this initiative has already affected the British Virgin Islands, St Vincent, the Grenadines, Belize, and the Seychelles.
Many more countries have begun to dismantle their offshore tax legislation and now insist on substance or taxation, or both.
The solution: Redomicilation
The immediate solution is to redomicile from countries that are changing their tax rules to countries that don’t intend to change their tax rules – or move to destinations that already have a system in place that satisfies the OECD.
The long-term goal is to also provide substance to the extent that your company will be recognised as a centre of management of your business.
A further related solution is the use of the trust. So far and in the near future, the OECD does not have a policy of blacklisting or attacking jurisdictions that have a comprehensive and well-accepted trust regime in place.