Tech company international expansion
We supported a Spanish tech company in its expansion to 3 European markets with a tax-efficient structure.
The challenge
A fast-growing Spanish SaaS company needed to expand into France, Germany, and the UK. Questions around permanent establishment, VAT obligations, transfer pricing, and employee taxation across multiple jurisdictions required comprehensive tax planning.
Our approach
The Challenge
TechSolutions Iberia had developed a logistics management SaaS platform that was growing rapidly in the Spanish market. With revenues exceeding 8 million euros and a client base demanding local presence, expansion into France, Germany, and the UK was the natural next step. However, the tax complexity of operating in four jurisdictions simultaneously posed a significant risk.
Key concerns included the potential inadvertent creation of permanent establishments, varying VAT obligations in each country, the transfer pricing policy between the Spanish parent and local operations, and the taxation of employees temporarily deployed during the launch phase.
Our Approach
We designed a multi-jurisdictional tax strategy in three phases. First, we analyzed the optimal presence structure for each market, determining that France and Germany warranted local subsidiaries while the UK could initially operate through a commissionaire model, avoiding permanent establishment.
Next, we established a robust transfer pricing policy based on the analysis of functions, assets, and risks of each entity, documented in accordance with OECD guidelines. We defined software licensing, support services, and sales commission flows with margins defensible under any audit. Finally, we configured VAT registration and periodic compliance obligations in each jurisdiction, implementing an integrated invoicing system.
Results
The tax structure was implemented in four months, enabling TechSolutions to begin commercial operations in all three markets within the planned timeline. The 28% tax savings compared to the unplanned scenario translated into over 340,000 euros annually, while international revenue reached 12 million euros in the first full year of European operations.
Results
Tax structure implemented enabling operations in 3 new markets with 28% tax savings compared to the unplanned scenario.
Client testimonial
BM Consulting designed a structure that allows us to grow internationally with complete tax certainty.
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