Winding down entities – What to consider before going ahead

Entering a new host country and setting up a new entity in order to do business there is an exciting time for any organisation. In administrative terms however, the amount of work required and the check list of items to cover off before being able to legally and practically employ people is almost overwhelming. By contrast, at the other end of the entity lifecycle, the tasks required to wind down an entity may initially appear much less demanding.

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May 04, 2018
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Entering a new host country and setting up a new entity in order to do business there is an exciting time for any organisation. In administrative terms however, the amount of work required and the check list of items to cover off before being able to legally and practically employ people is almost overwhelming. By contrast, at the other end of the entity lifecycle, the tasks required to wind down an entity may initially appear much less demanding. Fill in some forms, pay employees, move out of the office, no? Well, not exactly. When you consider that every aspect of the admin required to set up an entity also requires action when you decide to close an entity, you can begin to see that its no small task.

So the first question you may wish to clarify is – is this wind down completely necessary? Is the company sure that the entity won’t be required in future? Having to wind an entity down and then start it up again a few years down the line makes absolutely no sense if it’s possible for the entity to lie dormant in the meantime and there are no negative tax or particularly onerous ongoing complications involved in doing this. It may be that there are advantages to having a presence in a specific country – even if only for the purpose of retaining visibility in that location – rather than simply closing the business.  Take advice and explore every option before taking action...read more

Shield GEO makes international employment simple. Our customers use Shield GEO to employ and payroll hundreds of workers in over fifty countries. Find out more.

Go to the profile of Tim Burgess

Tim Burgess

Director, Shield GEO Services Ltd

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