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Things to Know Before Starting a Construction Business

Starting a construction business is complex. You have to learn the trade, get all the necessary permits, and find clients. It’s not easy! But it can be done with some preparation and guidance from experts in this field. In this blog post, we’ll talk about what you need to know before you start your own construction company.

Some of the most successful construction businesses have been passed down from generation to generation. But you don’t need a family background in construction work to start your own business doing this type of work.

There are classes you can take. You can get training to do your own job. You will need to work hard, but if you want a job where you build things, this is for you!

Basics

Before starting any construction project, you should be educated on the type of work involved. Read books about how to do business and marketing for your trade. This way, you can learn what it will be like if you choose this as a career choice.

Research

Research is always essential when learning something new. You should use books or internet resources to find out more about how to run a successful company before you spend any money. That way, you’ll know what things might cost or need your attention. It can save time down the road by taking advantage of all available help through reading up on topics related to the industry about your future plans. You’ll also learn essential tips such as making sure you get paid for your work and what licenses or permits are required to start a business.

Gain More Knowledge

If possible, find out if there’s an apprenticeship program that will allow you to gain relevant experience with professionals in the industry before going into it on your own as a self-employed contractor after learning about all this information! It’ll help you decide whether starting your own construction company is right for you early on in the process so that no time is wasted later down the road when things could be more complicated than they needed to be. If you are offered training programs by your company, take them. They can help you learn how to do things better, so there is less stress and less chance of losing money. This way, you can start making connections and getting your name out there before you even have to do any marketing yourself.

Business Structure

When starting a business, you have to think about what kind of company it will be. Some companies are better for some things than others. For example, some businesses are better for taxes and other things. You don’t want to incur too much debt upfront because it will only be harder on you financially if something goes wrong with one of your projects! Avoid thinking that all success stories are easy; they aren’t always as simple as we like them to be sometimes, so make sure not to go in with blinders on by ignoring anything terrible that could happen later down the road if things were done incorrectly at first simply because you didn’t plan accordingly from the beginning.

Construction business owners need to be on their toes the entire time they work. Also, make sure that their employees or partners share this same work ethic if you want any kind of success for your company’s future! They should have a good attitude at all times regardless of what is going on so that problems can be overcome quickly and handled in an effective manner every time! When you start something new, it can be really hard to know what to do if things go wrong. So think about how things might go wrong. If you want, you could hire people who already know what they are doing or invest more money in training someone new through various means such as online courses (if possible).

If you want to start a construction company, we suggest that you do research and make a plan.

Eversheds Strengthens Tax Offering in Washington DC

Eversheds Sutherland is pleased to announce that Jonathan A. Sambur has joined the Tax Practice Group as a partner, expanding the firm’s tax practice with a focus on advising global financial institutions. Prior to joining Eversheds Sutherland, Jonathan served as a partner in Mayer Brown’s tax transaction practice.

Based in the firm’s Washington DC office, Jonathan helps financial institutions, investment funds and multinational companies achieve success in their cross-border activities by providing comprehensive United States tax and regulatory advice.

He regularly counsels clients with respect to United States information reporting and withholding tax obligations, United States federal tax issues affecting foreign businesses and individuals operating in the United States, as well as, United States federal tax issues affecting United States businesses operating outside the United States.

“I am excited to welcome Jonathan to Eversheds Sutherland’s Tax Practice Group,” said Mark D. Wasserman, Co-Chief Executive Officer at Eversheds Sutherland. “Jonathan has exceptional experience practicing international and federal tax law. His arrival will provide our clients with expanded service offerings, deepen our ability to support global financial services companies on international tax matters, and continue the expansion of our tier-one tax practice.”

Exceeding 150 tax practitioners in more than 20 countries, the law firm’s international tax team is devoted to the increasingly complicated field of international tax. Jonathan ’s arrival to the United States-based team signals another step in the firm’s efforts to provide clients with the most comprehensive international tax guidance on a global scale.

“Jon is a perfect fit with Eversheds Sutherland and our global client base,” said Jeffrey A. Friedman, Partner and Head at Eversheds Sutherland’s Tax Practice Group. “With his focus on multinational financial service clients, Jon’s addition to the firm will help strengthen our tax practice and service offerings to global banks, insurance companies and corporations working through complex multi-jurisdictional tax transactions, audits and controversy.”

Prior to joining private practice, Jonathan began his career serving as an attorney at the IRS Office of Associate Chief Counsel. During his time with the IRS, Jonathan was the principal author of several Treasury regulations and other international tax guidance, and managed a diverse caseload involving international, corporate and partnership tax issues.

Jonathan is the third lateral partner added to Eversheds Sutherland’s Tax Practice Group in the last six months, following the recent additions of SALT-focused Partners Breen Schiller and Nikki Dobay. This continued growth underscores the firm’s goal to provide clients with the most skilled and talented practitioners across the tax field.

Cost Sharing with Company Domiciled Abroad

Cost sharing is a process wherein two or more organisations work together to secure savings in one or more areas of business operations.

1. Characterisation of shared services as reimbursement

The payment of costs and expenses shared between companies of the same economic group, with headquarters in different countries, may be treated as a mere reimbursement without the incidence of a high tax burden on payment or receipt. However, in order for such costs and expenses to be characterised in Brazil as a reimbursement, certain requirements must be complied with.

First of all, to be treated as a reimbursement the costs and expenses must relate to supporting activities rather than core activities of the service provider. Thus, services that are included in the corporate purpose of the service provider may not be shared, and consequently the costs and expenses thereof cannot be treated as a reimbursement.

For this reason, it is only possible to recognise as a reimbursement of shared costs and expenses those actually incurred by the service provider. It is therefore not permitted to add any amount or profit margin to the costs or expenses shared and reimbursed.

Moreover, in order for the costs and expenses to be recognised as a reimbursement, it must be shown unequivocally that the services shared are of mutual benefit to the companies that participate in the agreement. Accordingly, all the companies must benefit from the services shared, including those performing the services.

With a view to proving compliance with the minimum conditions required, it is necessary to have, apart from other documents, a formal contract between the companies of the group, showing the total costs of each service incurred and shared, and also the reasonable and objective criteria used for the division.

The minimum  of said contract were set out in Cosit Answer to Consultation no. 8/12 of which it is worth citing the following:

  • a) the division of the costs and risks inherent to the development, production or obtaining of goods, services or rights must be detailed;
  • b) the contribution of each company must be consistent with the individual benefits expected or actually received;
  • c) the identification of the specific benefit to each company of the group must be clear;
  • d) there must be an agreement for reimbursement, meaning the refund of costs relating to the effort or sacrifice incurred in the carrying out of an activity, without any additional profit;
  • e) the collective nature of the advantage offered to all the companies of the group must be express;
  • f) there must be a provision for remuneration of the activities, irrespective of their actual use, it being sufficient to “put the activities at the disposal” of the other companies of the group;
  • g) the conditions must be such that any company, in the same circumstances, would be interested in contracting.

In short, the contract must state the total cost or expense that benefits the signatory companies; the criteria for its division, each company necessarily defraying only the benefits actually expected or gained, with the possibility of their identification; and further it must state the manner in which reimbursement of the cost or expense will be made, with the supposition that it will be attractive even for independent companies.

Although the amounts classified as reimbursement of costs and expenses do not reflect any financial gain, which is sufficient to justify the non-incidence of taxation, the Brazilian Federal Revenue has still not adopted a firm position to this effect.

2.1. Payments abroad

Generally speaking, payments, credits or remittances abroad relating to the provision of services are subject to Withholding Income Tax of 15%, the Contribution on Economic Activities of 10%, the Contribution for the Financing of Social Security payable by the Importer of Foreign Goods or Services from Abroad of 7.6% and the Contribution for the Social Integration Programme and Civil Servants’ Investment Programme due on the Importation of Foreign Products or Services of 1.65%. The Tax on Financial Operations of 0.38% is due in any case. The Tax on Services, with the maximum rate of 5%, may also be demanded by the municipality.

The IRRF paid in Brazil may be taken as a credit abroad if there exists a double taxation convention with the country in question, or, at least, reciprocity of treatment.

It is worth mentioning that, in the event of a remittance of funds abroad in payment of services, the financial institutions involved are also responsible for the operation, for which reason they tend to confirm the need to pay the taxes due on the operation in order to avoid any risks.

2.2. Cash receipts from abroad

Payments received by the Brazilian company for services shared may be regarded as corresponding to services exported. In this case, the funds received from companies abroad, in the form of foreign currency, would not be subject to PIS and COFINS on the amount invoiced. In any case, if they are recognised as remuneration for services rendered, they would be subject to IRPJ and CSLL. The ISS on the services may also be demanded by the municipality in question.

3. Possible risks and means for their reduction/elimination

As already stated, the Brazilian Federal Revenue has not confirmed its attitude regarding the non-taxation of payments relating to costs and expenses shared and reimbursed. As a result, in operations involving remittances abroad, the financial institutions normally require to see proof of payment of taxes.

If it is intended to avoid paying tax, and with a view to reducing, and even eliminating, possible risks, it is important that the operations be properly formalised. It must be possible to show, by producing solid evidence, that the funds received from, or paid to, the related party refer to the recovery of expenses incurred for the benefit of another, so as not to generate income/earnings for the recipient.

The contracts signed must contain details sufficient to prove compliance with the requirements necessary for characterisation of the reimbursement, with the resulting non-taxation, and all the supporting documentation must be retained.

An alternative, in order to guarantee the position of the Brazilian Federal Revenue, in principle and preferably in favour of the non-incidence of tax, is the submission of a formal consultation with a view to confirming the interpretation applicable to the case.

Specifically for operations involving remittances abroad of sums relating to the costs and expenses shared, it is possible that, even on production of the contract signed between the companies of the group, together with all supporting documentation, and further even presenting the formal consultation to the public authorities, the financial institution may not agree to make the remittance without payment of the tax.

In this event, a declaration may also be produced to the financial institution, in which the company making the remittance assumes the obligation to inform the institution immediately of the result of the formal consultation, as soon as a reply is received from the Federal Revenue, and also to comply with the result thereof, if necessary, with payment of tax on the operation.

We consider that, provided the above requirements are met, the risks may be reduced or even eliminated.

Baker McKenzie Law Firm Announces Partnership Promotions

Baker McKenzie law firm is pleased to announce that 84 of our colleagues have been promoted to partner. Promotions take effect from 1 July.

A job promotion is when an employee is elevated to a higher rank, position, or role within a business or organisation because of their exceptional performance. Job promotions are usually accompanied by increased responsibilities or a higher salary.

Across the law firm’s practice groups globally, Tax and Dispute Resolutions saw the largest intake of new partners, with mergers and acquisitions also significantly adding to their numbers.

During Financial Year 2020 Baker McKenzie also added 68 lateral partner hires, demonstrating the Firm’s continued commitment to investing in top talent across the globe. Combining this year’s promotions and new lateral talent, the law firm added 152 partners to its ranks.

Milton Cheng, Global Chair of Baker McKenzie, said: “Congratulations to all of our new partners. Welcoming 152 new partners, both home-grown and lateral, over the last 12 months is a clear sign of the importance we place in the long-term growth strategy of the law firm.

I wish them all the best in their future career with Baker McKenzie.”

Baker McKenzie is a multinational law firm headquartered in Chicago, Illinois. Founded in 1949 as Baker & McKenzie, it has 77 offices in 46 countries, and over 6000 lawyers worldwide. It is one of the largest law firms in the world by headcount and revenue.

BDO expands product development Advisory Services in Life Sciences

BDO USA, LLP, one of the nation’s leading professional services organisations, today announced the acquisition of BioProcess Technology Consultants, Inc. (BPTC), a provider of chemistry, manufacturing and controls (CMC) consulting services to the global biopharmaceutical industry. The acquisition of BPTC bolsters BDO’s capabilities in the life sciences industry within the biopharmaceutical product development space and is effective as of April 1, 2019.

“We are pleased to welcome BPTC’s knowledge and resources to enhance our focus in the life sciences industry and deepen our biopharmaceutical product development offerings,” said Eric Jia-Sobota, national leader of BDO’s Industry Specialty Services and Life Sciences practices. “Joining forces with BPTC strengthens our ability to assist life sciences companies in managing risk, maximising profitability and fostering continued innovation to unlock new value and deliver improved outcomes.”

Founded in 1994, BPTC was a biologics CMC consulting firm, providing a full range of technical, regulatory and strategic assistance related to the development and commercialisation of biopharmaceutical products. BPTC assisted clients in developing manufacturing processes and strategies that enhanced the overall value of their products, while de-risking product development.

Howard L. Levine, Ph.D., BPTC founder, president and CEO will become managing director and national leader of the Bioprocess Technology Group within BDO’s Life Sciences practice.

“Since our inception, we’ve worked with companies to advance and de-risk the biotherapeutic development process, address unmet medical needs and increase patient access to novel medicines,” said Levine. “We’re excited to join BDO’s Life Sciences practice to support clients across the entire product development and company lifecycles.”

The professionals of BPTC who have joined BDO’s Life Sciences practice are headquartered in BDO’s Boston office at One International Place and based in locations throughout the country.

BDO Facts:

  • Over the past six years, BDO USA’s cumulative growth rate has far outpaced all other major U.S. accounting firms, with revenues more than doubling from $618 million in 2012 to $1.47 billion in 2018. During that time, BDO entered 24 new U.S. cities and expanded its critical mass in 13 existing markets.
  • BDO represents companies ranging from closely-held private businesses to leading non-profits to Fortune 500 multinationals.
  • BDO USA has industry practices specialised in serving businesses in the construction, energy, financial institutions, asset management, government contracting, healthcare, insurance, life sciences, manufacturing, non-profit, private equity, real estate, restaurant, retail and technology sectors.
  • BDO has been named a Best Company by Working Mother Magazine for eight consecutive years and been recognised with the When Work Works Award for Business Excellence in Workplace Flexibility for nine consecutive years.
  • BDO has more than 60 offices and over 650 independent alliance firm locations around the country.
  • BDO USA has been serving clients for more than 100 years since its founding in 1910 (as Seidman & Seidman).
  • As an independent member of BDO International Limited, the firm can leverage the resources of more than 80,000 people in 1,591 offices across 162 countries.

Firm Overview

BDO is the brand name for BDO USA, LLP, a U.S. professional services firm providing assurance, tax, and advisory services to a wide range of publicly traded and privately held companies. For more than 100 years, BDO has provided quality service through the active involvement of experienced and committed professionals. The firm serves clients through more than 60 offices and over 650 independent alliance firm locations nationwide. As an independent Member Firm of BDO International Limited, BDO serves multi-national clients through a global network of more than 80,000 people working out of 1,591 offices across 162 countries.

BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. For more information please visit https://www.bdo.com/