Expanding a life sciences company overseas

PricewaterhouseCoopers has experience in assisting companies to manage overseas expansion and is currently working with one of Scotland’s leading life sciences firms aiming to establish sales operations throughout Europe and Scandinavia.

From a tax perspective such expansions can be challenging, particularly because tax positions differ between countries. PricewaterhouseCoopers provides the expert advice and guidance on the practices which the local sales team can and cannot undertake if a taxable presence in the overseas country is to be managed, and offer advice on whether a local VAT registration – or a local VAT representative – will be required, as well as supporting the interaction of local and UK payroll obligations.

Enhancing the client experience

Working in partnership with our client, PricewaterhouseCoopers ensures that overseas expansion is undertaken in the most tax efficient manner while embracing the client’s commercial plans.

Through our global network of experts and working with each country’s tax specialists we talk the client through local requirements from a practical perspective including the translation of legal documents into English or other languages with the appropriate specialist input obtained.

The biggest challenge which we helped our client overcome is whether having a sales team operating in a country is sufficient to create a “taxable presence” there, such that the UK company can be liable to tax in the country in which the sales team operate. Creating a taxable presence overseas not only potentially results in additional tax liabilities, but also administrative costs in complying with local tax filing obligations.

It is entirely possible to situate a sales team in certain countries without creating a taxable presence, but the activities which the local sales team can physically carry out, such as negotiating with potential customers, may be limited. As a result, the commercial issues around the client’s plans must be balanced out to ensure that the sales operations are structured in both a tax efficient and commercially attractive manner.

This is where PricewaterhouseCoopers provides value and where it is vital for clients to receive quality input and a strong understanding of a local tax regime from their professional advisers. Most life sciences organisations have limited finance staff resource therefore PricewaterhouseCoopers has taken on as much project management as possible in relation to the expansion.

Our client benefits as this ensures their staff are free to focus on other matters, but with the reassurance that the appropriate procedures to assist their growth are being complied with. Unfortunately, it is rare to find a “one size fits all” approach to overseas expansion, as our client has found with their current plans.

Undertaking the expansion with a clear understanding of the tax implications can, however, avoid headaches which can arise through not seeking professional advice when in negotiations with potential investors. For example, that tax liabilities exist which the company were not aware of, or could have managed better through proactive tax planning.

Contact details
Email: Martin McEwen
Tel: +44 (0) 131 260 4110