Opening a service subsidiary abroad

[mcgrubso]

Hi,

We're considering making changes to our UK Ltd and wondered if anyone had any advice about the route we're currently thinking to take.

The plan is that the UK Ltd will found a German GmbH and that the GmbH will provide services to the Ltd (with an "arm's length" relationship).

The UK Ltd will continue to provide the actual product (an online service) but sales, support and marketing activities for that product will be moved to the GmbH.

We're planning to appoint one of the UK-based employees as the Managing Director of the Ltd, and they will deal with day-to-day running of that company. For the purposes of German tax, this is important because where the company is being managed from determines where the company has a Corporation Tax liability.

This seems like a nice simple setup for what we are trying to do but the question I have is whether the new MD of the Ltd will have any legal responsibilities, or perhaps more importantly, risks, associated with their new position.

Any thoughts on this are welcome.

Thanks.

 

[Hitman Negative PR Agency]

In my opinion, you need a formal plan of it. Chatting via forum is only a substitute.

 

[mcgrubso]

True.

I thought it was worth posting in case anyone had any advice though....as an addition to professional help rather than a replacement for it.

 

[Hitman Negative PR Agency]

Stick to professionals. Try to keep info about your situation as confidential as it gets. Your competitors never sleep!