At the start of a franchise chain, choices have to be made about the legal structure with consequences for tax purposes. How does the entrepreneur ensure risk minimization and a fiscally optimal structure? Are separate legal entities set up to accommodate brands and real estate?
It is often advised to divide the distinguishable risks into different legal entities. This requires more administration in the beginning and multiple contracts need to be drawn up. If a separate company is set up in which the intellectual property rights are placed, then for example, a licence agreement will also be required for the operating company in which the formula is exploited.
For large international chains, taxation is often leading. Structures with Luxembourg companies that ensure an optimal tax result are examples of this. Of course, we have the network to set up these structures for you.
We notice that often the structure receives the required attention too late. However understandable it may be that the operational aspects are given priority, we continue to insist on the proper structuring of the company at the earliest possible stage. In the end, that saves a lot of money in operational costs and taxes for example.
Valegis regularly works for franchise chains from other countries such as America. They often come up with the structure that needs to be implemented here. We assist and make adjustments as required.