Why Setting Up an International Company Still Matters in the Age of FATCA, CRS, and EU-Wide Tax Transparency
- Paul de Sousa
- Jul 29
- 3 min read
With the global shift toward transparency—driven by frameworks like FATCA (Foreign Account Tax Compliance Act), the OECD’s Common Reporting Standard (CRS), and the European Union’s tax transparency package—the environment for international companies has changed dramatically. The automatic exchange of information (AEOI), public registries of beneficial owners, and measures under the Anti-Tax Avoidance Directive (ATAD) and the Directive on Administrative Cooperation (DAC) have raised the bar for compliance across jurisdictions.
Yet, despite this heightened scrutiny, setting up an international company remains not only legal but strategically sound when structured under current international and EU standards. The key lies in aligning with substance requirements, anti-abuse provisions, and transparency rules, rather than avoiding them.
Here are five reasons why international structuring still matters in today’s regulatory environment:
1. Facilitating Global Business Expansion
A well-structured international company is an essential tool for businesses operating across borders. Whether entering new EU markets or managing decentralized operations, corporate structures formed under jurisdictions aligned with EU and OECD norms offer operational scalability, access to the Single Market, and recognition of legal personality throughout the European Economic Area (EEA).
Companies benefiting from freedom of establishment under Article 49 of the TFEU, and operating under EU directives such as the Company Law Directives, can structure themselves to take advantage of harmonized business frameworks, including the Cross-Border Mergers Directive and the Mobility Directive.
2. Protecting Assets from Domestic and Regional Risks
International corporate structures remain useful for mitigating exposure to domestic legal or economic volatility. Within the EU, jurisdictions such as the Netherlands, Ireland, or Luxembourg offer legal certainty, strong judicial systems, and corporate governance standards aligned with the OECD's Principles of Corporate Governance.
Beyond the EU, Switzerland continues to be a reliable and fully compliant jurisdiction for wealth and asset protection, especially for high-value business assets or holding structures. Since aligning with the OECD’s standards on transparency and adopting CRS, Switzerland has moved beyond banking secrecy while maintaining its reputation for legal stability, investor protection, and high-quality infrastructure. When used appropriately, it remains a strategic location for asset safeguarding in a transparent global economy.
3. Achieving Tax Efficiency Within the Limits of the Law
Tax planning is no longer about secrecy—it’s about strategy and alignment with legal frameworks. The OECD/G20 Inclusive Framework on BEPS, the EU’s ATAD (Anti-Tax Avoidance Directive), and the Multilateral Instrument (MLI) all make it clear: tax benefits must follow real economic activity.
That said, international companies can still access legitimate tax advantages—such as participation exemptions, preferential IP regimes (nexus-compliant under BEPS Action 5), and double tax treaty networks—provided they are used in line with the Principal Purpose Test (PPT) and anti-hybrid mismatch rules under ATAD 2.
4. Streamlining Operations and Reducing Compliance Burden
Many EU jurisdictions now offer digital incorporation systems, standardized reporting requirements under DAC6/DAC7, and favorable regimes for startups and tech companies. Countries like Estonia, with its e-Residency and simplified reporting under EU VAT rules, enable streamlined operations across the EU with lower overhead.
Moreover, compliance under the EU's Directive on a Single Digital Gateway makes it easier for businesses to access online services across member states, further enhancing efficiency.
5. Preserving Strategic Confidentiality (Within a Transparent Framework)
While opacity is no longer a viable strategy, confidentiality remains important for competitive reasons. International corporate structures may provide strategic separation of functions (e.g. holding vs. operating entities), protection of intellectual property, or ringfencing of liability—without violating transparency standards.
EU and OECD rules now distinguish between aggressive tax arrangements and legitimate international business structuring. Full UBO disclosure (as per the AMLD5 and AMLD6) and reporting obligations under DAC6 ensure visibility, but do not prohibit confidentiality within the boundaries of compliance.
Business Expats: Strategic International Structuring for a Transparent World
At Business Expats, we understand the nuances of today’s regulatory landscape—from the Multilateral Instrument to the ATAD, DAC and CRS regimes. Setting up an international company is no longer about avoiding scrutiny—it's about building legal, efficient and resilient structures tailored to your business goals.
Whether you’re a digital entrepreneur, investor, or global consultant, we’ll help you navigate the right jurisdictions, meet your compliance obligations, and protect your interests across borders.
Paul Antonio de Sousa
Co-Founder, Business Expats
+34 646 16 0662
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