Employee profit participation companies
Many business entities choose to establish international employee profit participation companies in order to mitigate taxation over profit shares and to motivate employees to be dedicated and committed. As in the case of real estate companies, professional services companies, financing and leasing companies , the choice of the right jurisdiction is of crucial importance. First of all, this international jurisdiction should be part of a wide double taxation treaty network, in order to achieve reduction of withholding taxes over dividend payments and protection from taxation over gains upon the sale of shares, while it should also definitely have a flexible exemption system.
Exploring the international corporate paths will definitely boost your business, especially in the case of incorporating employee profit participation companies. However, there are many things that need to be thought out. The mother companies should always consult with tax specialists in the chosen jurisdictions, who are aware of the local power structure and in regular contact with the local authorities and financial institutions. Also the international employee profit participation companies should have local directors in order to prove that the management is exercised within the jurisdiction and that the company is not just a vehicle for tax mitigation.