One of the most important factors for the effective functioning of a non-resident company is the maintenance of accounting records and the filing of the stipulated financial statements and audit reports, in accordance with the legislative requirements of the country of incorporation.

In order to help them manage the companies that have to submit annual auditor's or other reports or statements in accordance with the legislation of their country of incorporation, the clients of INTERNATIONAL OVERSEAS SERVICES are always provided with detailed information regarding the filing dates and form of the required reports and statements, as well as with information on obtaining the services of licensed accounting and auditing firms who are able to carry out these functions. The list of jurisdictions requiring regular submission of financial statements by companies incorporated there is quite long (and includes Ireland, Denmark, the United Kingdom, Cyprus, as well as some offshore jurisdictions). Therefore I.O.S. maintains ongoing relationships with auditing and accounting firms in both the main tax-exempt and non-exempt jurisdictions.

Most jurisdictions stipulate that if the audit report is not submitted in due time, the company loses its "good-standing" status, and a penalty is incurred, which subsequently increases. To restore its "good-standing" status, the company has to submit all reports due and pay the aforementioned penalty.

It should be noted that as their legislative base develops, so the number of jurisdictions not requiring financial reporting diminishes. Today there is virtually no country in Europe that grants permission to manage a company incorporated there without requiring submission of appropriate reports and statements. Even if a particular type of company were exempt from tax under the relevant country's legislation and therefore not obliged to submit its financial statements to the local tax authorities (e.g., in Europe the English Limited Liability Partnership is tax-exempt, as is the Danish K/S), such a company would still have to submit its annual financial statements to the Register of Enterprises of the relevant country.

Three main possibilities should be considered when preparing annual reports and statements:

1. A nil return, which is submitted where the company has not carried out any business activities during the current fiscal year.
2. An abbreviated (commission) statement, which simply reports commission awarded - where the non-resident company has acted as an agent on behalf of another company (the contractor), in the manner stipulated by the legislation of the country of incorporation.
3. A full return, which reports all the activities carried on by the company during the previous fiscal year. This type of report implies that all the activities of the company were carried out on its own behalf and solely for its own benefit, without any joint activities with other companies - agents or contractors.

The cost of preparing the first two types of statement is, on average, $500 - $900 (US) , whereas the cost of the third type of statement starts from $2,000 (US).

INTERNATIONAL OVERSEAS SERVICES will arrange for the services of professional accounting and auditing firms to provide high-quality annual reporting in accordance with the requirements of the country of incorporation.