International trading company
An international trading company is basically an International (offshore) company that functions as a trading intermediary in the fields of sales, distribution, import and export. This type of foreign trading company can be used in cases where goods originate from one country, are sold in another, but the principal is located in a third country.
A foreign trading company can also be used for bulk purchasing. This kind of business structure is typically established by a group of associated or unrelated companies to benefit from the economies of scale, to reduce their administrative costs and, of course, enjoy major tax advantages.
Foreign trading company advantages
Establishing an international trading company has many advantages; fiscal and non-fiscal. For example if the company were to procure products from one country and then sell them to another, then the profits would be accumulated in an International (offshore) environment, free from taxation; much like in the case of real estate investment companies
Another major advantage of an international trading company is that the profits deriving from the tax savings can be reinvested into further development of the business, without the excessive liabilities. It can also increase the company’s credibility in the foreign market and will certainly make it easier to obtain banking credit and to open bank accounts.