Most of the companies that are incorporated by entrepreneurs for operations on international markets act as independent subjects of commercial or trading activities.
A "trading company" is not only a company that carries on direct trade business but can perform any other regular commercial operations such as manufacturing, consulting or agency services.
The favourable conditions for incorporation of trading companies exist in a comparatively large number of jurisdictions both in the European Union countries and elsewhere.
Location of the trading company in an elaborately chosen jurisdiction offers the entrepreneur significant advantages in his commercial activities such as:
- work in stable economic and political environment
- availability of external financing for trading and other projects
- advantages of using banking services in countries which are well known financial centres
- effecting of trading operations in accordance with internationally approved commercial standards
- increasing levels of business safety.
Several jurisdictions have acquainted a recognition and popularity among entrepreneurs over the course of time as being optimal for registration of trading companies for international business operations.
It is important to note that for the companies registered in these jurisdictions, the same legislation rules apply as for the companies in other countries. Companies are stipulated to prepare financial statements which may be subject to audit depending on the individual requirements of each country, as well as must file Tax Returns. They must also pay corporate and other taxes in accordance with the legislation of the particular jurisdiction.