Economic Substance: Establishing a local presence

Those involved in today’s business services industry know better than anyone else what is happening in the market. Inter- national trends in taxation and  real estate are heading towards a common denominator: substance and local presence.

The need for real operations in a jurisdiction is key to enjoying the benefits of international  tax treaties, or avoiding import levies. As international trade tensions increase and potential  barriers to trade become more apparent, many third-country companies are looking to establish  a physical presence in the EU. Brexit is just one example of a political development creating  the need for EU-inbound relocation.

Business establishment and relocation (BER) is a complex process, and requires specialist  legal and tax advice in order to ensure a smooth process.

Any business wishing to relocate must employ a tailored mul- ti-disciplinary project team with  operational leadership from a non-lawyer professional project manager. This project leader should  be focused on getting the job done in time to meet pre-agreed deliverables.

Using a BER team (BERT) is a cost effective way to produce results in a far better, more  transparent and integrated manner than traditional advisors.

The BERT process covers;

• high level country selection and cross-cultural business assessment

• real estate – industrial, offices, logistics lease and develop- ment and zoning, etc.

• immigration permits and all kinds employee residential matters

• local (interim / transitional) management, selection and providing company management

• hiring & staffing – employment law, works council, unions, work permits, employee tax  benefits, HR and old age pensions

• business permits and licenses, “red tape” matters

• business partner selection, trade agents

• joint-ventures and business acquisition and business integration

• merger control and completion – national and Brussel (EU)

• incorporation – banking and company management

• privacy regulations, IT-security, intellectual property pro- tection

• taxation – rulings – CIT, VAT and dividend withholding tax and intercompany pricing

• banking and accounting – company management services

• foreign investment incentives and regulations (municipal, Ministry of Economic Affairs)

• press and social media communications

• head hunting

Good BERTs work closely with their client’s management and available professionals to make  the relocation or estab- lishment a success. Project managers should report on the progress of  the affairs and provide transparent information directly to the client on a secure project  information platform that is 24/7 accessible.

Working with a BERT is seen as a competitive advantage in order to efficiently and successfully get  access to foreign mar- kets. This applies in particular to clients who are not serviced by  well-known giant international accounting firms.

Amsterdam law firm Wintertaling Advocaten & Notarissen have specific expertise in business  establishment and relocation, representing a range of foreign clients. Their team members are  selected from an advisor base of over 300 advisors cov- ering 20+ disciplines, including legal and  tax disciplines. They may operate from all parts of the Netherlands and elsewhere in Europe where  needed. Law firms typically tend to welcome clients and then decide how a case is to be handled,  but the Wintertaling BERT takes a different approach. They envisage smart process phasing with  go/no go decisions aimed to stop projects losing traction or going off-track with a complete  disregard of the initial objectives.

Wintertaling will assess their clients’ objectives as a pre-pro- ject kick-off, and regularly  evaluate during the process. Critical aspects are identified, such as strategic objectives,  selection and appointment of BERT professionals, commitment on agreed deliveries and  timelines, budgeting, methods of data supply, access and data storage and access to virtual work  spheres.

Project team-working methods are no new thing in the consul- tancy world, but in the conservative  legal industry, the intro- duction of a professional multi-disciplinary services model is innovative.

Mr. Edo Smid, partner of the Amsterdam based law firm Wintertaling advocaten & notarissen,  has proven experience in supporting foreign businesses that wish to enter the EU  marketplace, in particular via the Netherlands as a EU gate- way. Mr. Smid and his team provide  multi-disciplinary strategic advice paired with operational support that goes beyond legal and tax  advice only. All professionals are highly skilled and handpicked.

This article is taken from the recent IR Digital doucment: IR GLOBAL – MEET THE MEMBERS: The Netherlands