Andersen Tax

Andersen Tax


International Expansion

For most venture-backed companies, planning for international expansion starts when a few oversea sales begin to trickle in; once the leadership team starts to survey larger opportunities, it becomes imperative.

Taking a company global is a complex process that requires critical understanding of multiple factors and a consistent approach by your leadership team and all stakeholders. But while most companies start expanding internationally as part of their natural growth stage, even the earliest stage companies can lay a foundation of planning well before those first sales come in.

Early Planning Sets the Stage for International Success

Identify your objectives, goals and strategic intent

  • Why does it make sense to have an international plan?
  • When will it make sense to “pull the trigger”?
  • Do you have a defined short-, medium- and long-term strategy?

Ensure your infrastructure is scalable

  • Internally does your organization have the structure needed to successfully execute your strategy?
  • Are your legal, tax and finance teams able to scale with you as you go global?

Perform extensive due diligence & risk analysis

  • Have you analyzed the impact that going global will have on all facets of your organization?

Two Options to Start:

U.S. Company  with Foreign Sales

  • US company expands into foreign markets by selling directly from the US.
  • Foreign sales are included in US taxable income.
  • Because the tax rate in the US is 40% (including state taxes), the result is a high Effective Tax Rate (ETR).

U.S. Parent Company with a Foreign Subsidiary

  • US company establishes foreign subsidiary to manage non-US sales.
  • Foreign sales are not included in US taxable income until repatriated.*
  • If the foreign subsidiary is located in a low tax jurisdiction the result may be a significantly lower ETR.*