When you take your business overseas, you have the option of establishing a subsidiary in your country of expansion. This process comes with challenges, but it also offers its advantages. Globalization Partners offers subsidiary outsourcing to simplify the process.
How to Set up a Tuvalu Subsidiary
When you incorporate a company in Tuvalu, you can choose to make it proprietary or public. Proprietary entities cannot issue shares to individuals outside the company, while public entities can.
Establishing a subsidiary starts with submitting an application for incorporation to the Registrar of Companies. You must submit your company name, Memorandum and Articles of Association, and a list of your directors and their addresses along with this application.
Your company name may not be any name that already exists in the country. The Registrar will not permit incorporation if you file for a name that already exists. They will provide alternative names and allow you to resubmit your application.
When you receive your certificate of incorporation, you’ll get a taxpayer identification number (TIN) that allows you to pay taxes and submit income tax for your workforce. You’ll need to register with the Tuvalu National Provident Fund (TNPF) to contribute to employee pensions. You should also open a bank account in your company’s name.
Tuvalu Subsidiary Laws
Your entity must follow the relevant subsidiary laws when you apply for incorporation. One of the more notable laws is the required Memorandum and Articles of Association. The memorandum must include:
- The company name
- The address of your registered office
- The proposed share capital
- The number of directors and the minimum and maximum for the company
Companies must have at least two directors, but a company may set a higher minimum for their entity. Business owners are also required to own or rent a property before applying for incorporation.
The Articles of Association act as bylaws for your subsidiary by describing various processes of the company. These processes include the election of directors, financial reporting, and other procedures.
The two resources you need for incorporation are money and time. Your expenses for the process will include initial investment capital, application fees, and property costs. You should also consider the costs of flying into the country and finding accommodation while you’re sorting out your new entity. You may also want to pay for a lawyer to discuss your Memorandum and Articles of Association to ensure all processes are compliant.
The application process may take as little as a few days, but this time frame doesn’t consider the time spent writing your Articles, finding a property, and identifying your directors. Make sure you have the resources you need before you commit to the process of establishing a subsidiary in Tuvalu.
While the incorporation process can be challenging, it does offer benefits. Your subsidiary will have a separate identity from your parent company, which is advantageous to your liability and workplace culture.
Your parent company will not be responsible for legal damages incurred by your subsidiary with a separate liability. This setup can help you reduce losses and maintain your success. On top of independent liability, your subsidiary will be able to modify its operations and workplace culture based on the country it’s in. Your employees will feel comfortable, and you’ll establish a presence in the area.
Subsidiary outsourcing with Globalization Partners allows you to reap a subsidiary’s benefits without working through the application process. As your Employer of Record, we’ll hire your team through our subsidiary. We’ll take on legal responsibility, and you’ll get to manage your workforce through an established entity.
Choose Subsidiary Outsourcing With Globalization Partners
Globalization Partners provides the foundation you need for your international expansion. Get in touch with our team today to learn more.