The most popular trading scenario involving companies registered in the EU is the VAT triangulation scheme. Triangulation rules were specially devised in order to simplify cross-border trading, so that EU companies wouldn't have to register for a VAT number in each EU member state to which they deliver goods.

Although triangulation is easy to understand, it seems that for many business owners this trading model is a significant source of misunderstanding.

The first rule to remember is that the model must involve three companies, registered in three different EU member states, each with its own VAT number.

One company sells goods to another company, which then sells the same goods on to the third company. However, the goods are transported directly from the first company to the final (third) company.

Basic rules of VAT triangulation
Those making use of the VAT triangulation simplification procedure must act in accordance with 2006/112/EC, Article 141 of the EU VAT Directive, which stipulates the following conditions:

The trading scheme must include three different companies, domiciled in three different EU countries.
Each company in the trading scheme must have a valid VAT registration number.
The goods must be transported directly from company number 1 to company number 3.
Trading scenarios without triangulation simplification
The benefits of triangulation simplification depend on the transport scheme. There are two main scenarios in terms of how goods are transported between the three parties.

First scenario: attribution to sale no 1
In this scenario, goods are transported from company 1 to company 3 and attributed to sale no 1. The supply of goods arranged by company 1 is classed as intra-community and so subject to 0% VAT. Meanwhile, company 2 effects a taxable intra-community acquisition in the member state of company 3, where the goods arrive. Consequently, company 2 must register for VAT in the country of arrival of the goods and declare the acquisition there. If company 2 is not registered for VAT in that country, it will be charged VAT in its own member state.

While company 1 is involved in an intra-community supply, at 0% VAT, the subsequent transfer of the goods between company 2 and company 3 is treated as a domestic sale. Therefore, company 2 is registered for VAT in the member state that receives the goods and charges the applicable VAT in that state. Ultimately, company 3 will reclaim that VAT through its regular VAT return.

Second scenario: attribution to sale no 2
In this case, goods are transported from company 1 to company 3 and attributed to sale no 2. The sale made by company 2 is classed as an intra-community supply of goods, subject to VAT at 0%. Company 3 is charged VAT in its own member state, whereas company 2 effects an intra-community supply in the member state of company 1, where the transport chain started, also at 0% VAT. This means that company 2 must be registered for VAT in company 1’s member state, where it will declare the intra-community supply of the goods. Thus, the transaction between company 1 and company 2 is considered to be a domestic sale, with company 1 charging its local VAT rate to company 2. Later, company 3 declares the VAT deal in its own member state and reclaims that VAT through its VAT return.

How do businesses benefit from triangulation simplification?
For the purpose of simplification, company 2's acquisition of the goods in the member state of arrival is deemed to have been subject to VAT. This removes the obligation on company 2 to register for VAT in the destination member state. Sale no 2 is now subject to the reverse charge mechanism. The final customers are charged VAT on the value of the acquired goods. Eventually, company 3 will reclaim its local VAT through its regular VAT return.

Supporting documentation for triangulation
In order to set up and maintain VAT triangulation structure, you will require to provide the following documents:

The sales invoice is issued by company 1 to company 2. The valid (and verified) VAT numbers of both companies must be featured on the invoice.
In return, the intermediary trading party — company 2 — sends its sales invoice to the final customer — company 3. Both companies’ valid VAT numbers are quoted on the invoice. In addition, company 2 must refer to Article 141 simplification on the invoice.
The supply by company 1 to its customer, company 2, is not subject to VAT, because this transaction falls under the intra-community dispatch of goods rule.
An intra-community supply is recorded by company 3.
Company 2 records the triangulation sale to company 3 separately in its ECSL (European Community Sales List) return.
Company 1 records the goods as dispatched on the Intrastat forms.
Company 3 records the goods as arrived on the Intrastat forms.

When a foreign entrepreneur has decided to invest in Ireland, he or she can either incorporate a new company or purchase a shelf company. Shelf company, also called readymade company, is a legal entity that has been incorporated previously and sitting on a shelf ready to be purchased for immediate use.

Generally, there are two types of shelf companies. They might be called differently, but the main idea is that the first type of shelf company is clean, meaning that no transaction has ever taken place in this business. The other type of shelf companies are usually older and with operational history. While the investor has to be cautious and do his due diligence before the acquisition of an aged shelf company in order to avoid purchasing a company with debt or other liabilities, there are various advantages and reasons, why investors might choose a shelf company that has actively operated some time ago.

One of the main reasons why investors might prefer an acquisition of a shelf company rather than incorporating a new legal entity is the difference in the time spent for both procedures. When setting up a new company, an entrepreneur has to go through a complex and time consuming procedures, whereas a shelf company is already incorporated therefore the business can start operating almost immediately. Generally in Ireland, the new shareholders are able to acquire a company number within just 24 hours or even in the same day. Another important advantage is the additional credibility with suppliers and customers if a company has been incorporated some time ago rather than recently. Also, if you are operating as a Sole Trader or in a Partnership with a legal entity which has been established in the past, it is also possible to receive tax planning benefits.

Procedure of shelf company acquisition in Ireland
When purchasing shares of a shelf company in Ireland, you are required to notify the Companies Registration Office. While the process of the share transfer is similar to an incorporation of a new company, it requires significantly less time and documentation and the company can be used immediately. The new shareholders of the company are required to provide the agreement of share purchase and, if the buyer is a legal entity, an extract from the Trade Register is also necessary. The shares’ purchase agreement has to be notarized and Articles of Association has to reflect all material changes, such as the new company name, different object or activity, registered address and information about the new shareholders.

Generally, the easiest way to purchase a shelf company, especially if you are a foreign entrepreneur, is through companies offering such services. These companies acquire inactive companies and keep them until someone is ready to buy them. They also incorporate new companies for the same reason, but the main difference is that these shelf companies have never had any operational activity. The procedure is relatively straightforward and in case of any uncertainty, professionals will be there to help you and in few easy steps you will acquire a shelf company:

Find a company that provides shelf company acquisition services. Perform a due diligence on this company as you have to trust them with their research and ability to offer quality shelf companies without liabilities.
File an order and provide all necessary information necessary for the process. An official document allowing to operate on behalf of the new shareholders needs to be signed. Generally, the service fee and the shelf company’s price needs to be paid in advance of documentation processing.
Your service provider will transfer the shares to the new shareholders, change the directors, secretary and the registered address of the company as well as can change the company name if necessary.
Some service providers also offer their premises for the registered company address.
Typically prices vary depending on the service provider and the quality as well as the age of the shelf company.

The development of telecommunications and economic globalization have made it possible for interested investors to set up companies all over the world. With proper research, financial investment and legal backing, business ventures can be safely incorporated in almost any country in the world. Building an international business used to be a complicated entrepreneurial venture, but today it is commonplace with the help of experienced legal and business advisors.

The advantages of founding a company abroad are as numerous as they are obvious. Many countries offer specific locational advantages, ranging from natural resources and well-established infrastructure to beneficial laws and regulations that encourage growth in a particular industry. Likewise, it can be difficult to start a business or an acquisition in your own country due to adverse situations: political or regulatory environment, lack of resources and more. In this situation, it makes sense to consider an overseas option that offers greater opportunities for growth, development, and success.

Company registration in Uganda
When starting a business in Uganda, an interested investor must conduct due diligence regarding legal procedures, international regulations and sufficient investment for success. It is crucial to understand cultural, social and political factors that influence starting and growing one's business. Failure to do so may result in unintended consequences. Poorly researched and toneless international launches often end in disaster as time, money and energy is wasted due to poor planning.

Legal Documents
Every country in the world presents its own intricate challenges when it comes to starting, developing and maintaining a business. Owners, financiers and investors must make these commitments with the support of a knowledgeable and experienced legal team. Only someone with in-depth knowledge of local and international corporate law will be able to set up an overseas business while avoiding the pitfalls that plague many new businesses.

Additionally, smart business people can consider ways to invest in foreign companies without actually starting their own businesses. In these situations, it is still beneficial for the investor to partner with a knowledgeable global economics and litigation advisor. International investments create a truly diverse portfolio that offers growth opportunities that were unthinkable decades ago.

Potential investors, venture capitalists and entrepreneurs should consider the existing infrastructure in Uganda when planning to start a new business. While extensive infrastructure and systems can help make the process of starting a business a smooth one, it could also represent market saturation and reduced growth potential. On the other hand, a lack of infrastructure is often a major obstacle to growth; However, the lack of infrastructure points to a clear market opening for a creative and efficient new business.

Bank account opening in Uganda
In connection with the formation of a company, it is necessary to open one or more bank accounts in Uganda. Confidus Solutions offers the ability to open a bank account in over twenty jurisdictions, making it easy for you to avoid challenging language barriers or bureaucratic hassles.

Virtual Office in Uganda
Since a registered address is a necessity for international business, Confidus Solutions enables foreign investors to set up a virtual office in Uganda. This address allows international entrepreneurs to accept mail, arrange for shipping and set up a registered bank account in their country of business.

Tax regulations
If you are in the process of researching a business formation in Uganda, consult a lawyer or consultant with extensive experience in the area you are considering. This advisor can help you with everything from laws and tax structures to local helpers. You need to consider every aspect from the local office to your highest organizational structure; Make sure you recruit the best possible mentors as you embark on this exciting but challenging process.