How to set up a subsidiary abroad

1. 1

   Discover

   Step 1: Decide what the company must do, and where

   Write down what the local company will do (sell, hire, hold stock, sign contracts, manufacture), how many people it needs and how long you plan to stay. That list decides the structure, and whether you need premises at all: a company that only signs contracts and invoices may need no more than a registered address at first.

   Compare the shortlisted countries on how easy it is to set up and run a company there. The World Bank’s B-READY project measures, economy by economy, the rules, the public services and the time and cost of starting a business, for domestic and foreign-owned firms⁹.

   What this step produces

   • A one-page purpose memo
   • A shortlist of two or three countries

   Common mistake: Choosing the country on its headline tax rate alone, before writing down what the company will do there.

   With Promote:Global

   Where to invest compares up to five countries for setting up, weighted by what matters to you, and gives each a location fit out of 100 from investment momentum, market, logistics and trade access, every figure with its source and year. The scores compare the candidates; they do not grade a country. A market’s page adds the investment climate: foreign investment inflows, World Bank governance indicators and B-READY. Not sure a company of your own is the right step yet? The iPhone’s route advisor asks four questions and ranks up to three routes.

   Where to invest Markets

   

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2. 2

   Prepare

   Step 2: Choose a subsidiary, a branch or a representative office

   A subsidiary is a new local company, with its own legal personality, whose shares your company holds. A branch is your company itself, registered to operate in the country: it has no separate personality, so the parent answers for its debts and acts, and its results usually flow into the parent’s own tax return, where a subsidiary files its own^3,4.

   A representative office is lighter still, and in many countries it may only do market research and liaison work, not sign contracts or earn income, as Singapore and the Netherlands both describe it^5,6. The words mean different things in different countries, so compare the options against what the operation will actually do, not against a template⁶.

   What this step produces

   • A structure memo with the reasons for the choice

   Common mistake: Choosing a branch to save setup work, then finding the parent carries the liability and a taxable presence anyway^3,4.

   You do this step yourself

   This choice is yours, with a lawyer or accountant in the country. Promote:Global gives no legal or tax advice, and its routes do not include a branch or a representative office: the plan it writes for this route is for a company of your own.

3. 3

   Connect

   Step 3: Check the entry rules with the investment promotion agency

   Find out whether your sector needs a license, an approval for foreign investment or a minimum local share. Lists differ by country: a U.S. government guide to Belgium says no prior authorization is needed except in a few sectors such as banking, insurance, pharmaceuticals and broadcasting³, while Kenya limits foreign ownership of agricultural land and of some professional services firms⁷.

   Ask the investment promotion agency, or the country’s one-stop shop, before you pay anyone to register; UNCTAD recommends that governments give investors a single enquiry point and a lead agency¹. Ask about incentives only if the company will invest in premises, equipment or jobs on a scale that could qualify.

   What this step produces

   • A note on restrictions and approvals, from counsel or the agency
   • A checklist of local requirements
   • A named contact at the agency

   Common mistake: Registering first and asking later, then redoing documents the registry rejects.

   With Promote:Global

   A market’s page lists the official trade and investment bodies for the country, from a public directory, for you to contact directly. Investment promotion agencies can also publish investment opportunities on Promote:Global, which every signed-in company can browse, those matching its markets and sectors first, and express interest in. The plan’s Engage the investment promotion agency step carries Find an advisor for this market. Promote:Global does not hold sector ownership limits or incentive packages: ask the agency what applies to you, and keep the answer as a note on the project, which Meridian reads when you ask about it.

   Markets

   

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4. 4

   Prepare

   Step 4: Choose the legal form, the directors and the address

   Most foreign owners choose the country’s private limited company, such as Germany’s GmbH. Some forms carry a minimum capital: a standard GmbH needs 25,000 euros of share capital, at least 12,500 of it paid in when it is registered².

   Rules on directors and addresses vary. Germany treats the nationality and residence of shareholders and managing directors as irrelevant, but wants a German business address². Singapore sets local residency requirements for the people who register and run a company there, and lists which pass holders meet them¹⁰. If you appoint a local nominee director to meet such a rule, understand the liability that person takes on, and the control you give up.

   What this step produces

   • Draft articles of association
   • A board plan
   • A registered address

   Common mistake: Discovering a residency rule for directors or the company secretary after the papers are drafted.

   With Promote:Global

   The plan’s Choose the entity type step carries Find an advisor for this market, which opens advisory firms with experience of the market. Find service providers lists firms under legal and corporate, and under domiciliation for a registered address. Firms list themselves, Promote:Global does not check them, and whether one is listed for your market varies.

   Advisors and service providers

5. 5

   Prepare

   Step 5: Prepare the parent company’s documents

   Registries usually want an extract from your home commercial register, your constitutional documents, a board resolution approving the subsidiary and proof of who may sign for the parent, such as a power of attorney, often notarized, apostilled and translated². Ask the registry or your notary for the exact list and form before you start, and prepare them in one round.

   What this step produces

   • A commercial register extract
   • A board resolution and a power of attorney
   • Notarized, apostilled and translated copies

   Common mistake: Sending parent documents unlegalized or untranslated, so the registry rejects them².

   You do this step yourself

   A notary, lawyer or corporate service provider prepares these with you; Promote:Global does not legalize documents. Add this step before Register the entity with Add a step.

6. 6

   Prepare

   Step 6: Pay in the capital and register the company

   Check which comes first, the capital or the filing. In some countries the share capital must be in the company’s account before the registration is filed: in Germany it is paid in before the notary, who drafts the articles, files them electronically². Elsewhere the account is opened after registration. In Singapore a foreign owner registers through a corporate service provider⁵.

   Until it is registered, the company may not protect you: in Germany it has limited liability only once registered, so acting for it before then can make you personally liable². Where the law keeps a register of beneficial owners, as Germany’s transparency register does, the owners are entered in it².

   What this step produces

   • Evidence of the capital paid in, where it is due first
   • Certificate of incorporation and registry number
   • Beneficial-owner entry, where required

   Common mistake: Signing contracts or leases for the company before it is registered².

   You do this step yourself

   Promote:Global does not register companies or legalize documents: a notary, lawyer or corporate service provider does that with you. The plan’s Register the entity step carries Find an advisor for this market, and you tick it when the certificate is in hand.

7. 7

   Prepare

   Step 7: Open the bank account and register for tax

   Where the account was not needed for the registration, open it now. Banks usually ask for the registration documents, the beneficial owners, the directors’ identity and a business plan². Record the money you put in as share capital or as a documented loan, never as informal transfers.

   Then register for corporate income tax, VAT or sales tax where it applies, payroll and social security, and any trade or sector license. In Germany the local trade office must be told before operations start².

   What this step produces

   • Bank account and capital contribution evidence
   • Tax, VAT and payroll registrations
   • Trade or sector licenses

   Common mistake: Hiring staff before the company is registered for payroll.

   With Promote:Global

   The plan’s Set up banking & tax registration step carries Find service providers, where firms list themselves under banking, and under accounting and tax. A request to a firm carries your company’s contact card, shown to you before you send it, and the firm answers in Messages.

   Advisors and service providers

8. 8

   Prepare

   Step 8: Price intercompany dealings, and check permanent establishment

   Everything the parent and the subsidiary charge each other, for goods, services, brands or loans, should follow the arm’s length principle in the OECD Transfer Pricing Guidelines: priced as unrelated companies would price it, set out in written intercompany agreements and documented⁸.

   Check separately whether the parent still has a taxable presence of its own. Under Article 5 of the OECD Model Tax Convention, a fixed place of business or a person who habitually concludes contracts for the parent can create a permanent establishment, and in November 2025 the OECD updated its commentary on when a home office counts as a place of business¹¹.

   What this step produces

   • Intercompany agreements
   • A transfer pricing file
   • A permanent-establishment memo

   Common mistake: Invoicing the subsidiary for months with no written agreement, which makes later adjustments hard to defend⁸.

   You do this step yourself

   Promote:Global gives no tax advice and drafts no agreements. Your tax advisor sets the prices and writes the memo; keep a note of the decision on the project.

9. 9

   Grow

   Step 9: Hire the first people

   Use employment contracts written for local law, not your home template, and register as an employer before anyone starts. Decide early who may sign for whom: the subsidiary is taxed on its own profits, but if its staff habitually conclude contracts in the parent’s name, the parent can have a permanent establishment in the country as well¹¹.

   What this step produces

   • Job descriptions
   • Local employment contracts
   • A signing-authority list

   Common mistake: Letting the subsidiary’s sales lead sign deals in the parent’s name.

   With Promote:Global

   First hire compares hiring through an employer of record, as a contractor or through your own company, in up to four countries: the minimum wage with its year, an estimated employer cost, notice and leave rules, and a recommendation. It is free, says where it has no data, and is orientation, not payroll or legal advice. The plan’s Hire the local team step carries Find service providers, with recruitment and HR, and payroll and benefits. Promote:Global does not recruit or run payroll.

   First hire

   

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10. 10

    Grow

    Step 10: Calendar the filings that recur every year

    Put every recurring duty in one calendar: the registered address, annual accounts, tax returns, any audit, director filings, and the parent’s own filings about the subsidiary. Then go back to the investment promotion agency, whose aftercare can help with permits, problems and expansion once you operate¹².

    What this step produces

    • A compliance calendar
    • A six-month review

    Common mistake: Treating registration as the finish line and letting the registered address or a filing lapse.

    With Promote:Global

    The plan ends with Set a compliance & reporting cadence. On the project you can keep certificates and documents with their status and expiry date, and an expired one blocks the project until it is renewed. Promote:Global files no accounts or returns: your accountant does.

    Projects

The plan is the route’s own checklist, with no customs steps by default. Where the work moves goods across a border, such as equipment, ingredients, samples or branded supplies, add those steps yourself. You can add, reorder and skip steps. In your own project, each step names your product and your countries. Building the plan uses no AI action.

On a project, Search for possible partners looks on the open web for corporate-services firms: company formation, legal, tax, or for whoever you describe, ranked by fit, for 1 AI action. A result is a lead to check before you contact anyone, not a confirmed partner.

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