Question from an IM Member:
Q: "I know a few places that I would be happy living, but I want my company to be located in at least two different countries in order to diversify myself even more. What do you recommend?"
A (by Ed Marsh): "Multiple jurisdictions" is a key element of the International Man diversification philosophy. And even if the substantial economic and social dislocations - which many consider probable - never appear, diversification is sensible from routine personal investment and corporate strategy perspectives.
Ultimately, the selection of countries/regions/jurisdictions/markets is driven by strategy.
Strategy can (and should) incorporate hard and soft elements, and to the extent that one of the objectives is creating footprints for residence in other jurisdictions, then lifestyle appeal and comfort from the owner's perspective should be central to that planning and selection.
But remember that you don't need to live (and some might argue 'shouldn't') where your business is based. It is entirely reasonable, for instance, to create a subsidiary corporation in Panama as an umbrella for Latin American operations. That corporation needs a local corporate agent, but can otherwise exist as a legal entity without local operations (although local corporate bank accounts may be required and are probably advisable.) The owner in turn could concentrate on an initial business focus in Colombia (in the Andean group) with the objective of ultimately developing business in the Mercosur region and living in Uruguay.
When the business is small, you will certainly need to live where you are developing the market. But ease of travel, prevalence of communications and flexibility of business model allow one to quickly disaggregate business location and residence for many businesses.
Before you select markets in which to accumulate personal or corporate assets, however, understand the political risks. Diversification done properly represents increased security, but if you diversify into markets likely to nationalize assets or restrict the outward flow of capital... your attempt at security will backfire.
Ed Marsh has in-depth experience on a number of continents, in various capacities and industries. He founded and managed a start-up in India; successfully built channels throughout Latin America; leveraged his German birth and marriage to a German national in his extensive work in Western Europe and has deep cultural experience with Vietnam. Ed's B2B and B2G pan-global experience has involved a variety of products and services including capital equipment, industrial automation, distribution services and homeland security and defense technology. He is a Founder and Principle at Consilium Global Business Advisors.
Caveat – these are complicated legal issues, which have a variety of potentially serious legal implications. Decisions shouldn’t be made without consulting capable and internationally experienced counsel. These are just practical replies.
PLEASE NOTE: The information contained within this article is based on the best research we could find as of the date of publication. However, the world changes fast and information can become out of date relatively quickly. So, two points... First, before undertaking any action described in this material, please conduct your own due diligence and verify all facts. Second, if you happen to spot an out of date fact or figure (or even suspect something is out of date or false), simply get in touch with us and we'll look into it. International Man is a network made up of some very smart people - tax specialists, accountants, lawyers, analysts and many other talented individuals. As a group, we can create and maintain a very accurate and highly actionable resource for internationalization.