Do I need a structure review if nothing in the group has changed?
Nothing changing is itself a reason to look. Most cross-border structures were built one decision at a time, and each entity was right for the situation in front of the owner in the year it was formed. Reviewed as a whole rather than one company at a time, a group usually contains at least one entity whose original purpose no longer exists and whose reporting cost still does. A review maps ownership, how each entity is classified in each country, the character of what it earns, and the reporting each one attracts. That picture is what tells you whether the structure still matches the business.
How do I close a dormant foreign subsidiary without triggering tax?
You plan the wind-up rather than execute it. Simplifying a structure is a taxable event: removing an entity moves assets, realises what has accumulated inside it and changes the character of what is left, and those consequences arise in every country that recognises the entity. So the order of work is to establish what is inside the company, then how each country classifies it, then what the removal does in both systems, and only then to file anything. Done the other way round, the paperwork is complete and irreversible before anyone has priced the outcome.
What does a foreign affiliate structure review actually look at?
Four things, in order. Ownership, meaning who holds what, through which entity, in which country. Classification, meaning how each country treats each entity, because the two answers are often different for the same company. Surplus and the character of income, meaning whether what has accumulated is active or passive and what that means when it moves. And reporting, meaning which return each entity attracts in each jurisdiction, considered separately from whether it has any activity. The reason for that order is that each step forecloses or preserves an option in the next one.
Why am I filing forms for a company that does no business?
Because the reporting attaches to the entity, not to its activity. A company that has stopped trading still exists, is still owned, and still appears in the ownership picture each authority asks about, so the information return remains due and the exposure is per form rather than per pound of profit. That is the cost which outlives a subsidiary usefulness. The way out is to remove the entity deliberately: establish what is in it, how each country classifies it, and what the removal realises. The filing obligation ends when the entity does, and not before.
Can I just strike the overseas entity off and stop filing?
You can strike it off, but the tax result is not neutral and it cannot be undone once the register is clear. Striking off distributes whatever the company still holds, crystallises what has accumulated in it, and ends the entity in one country while the other may still treat it as in existence for part of the year. Filing obligations run to the end of that period, not to the date you decided to stop. Treat it as a transaction to be planned: what is inside, how each country sees it, what comes out, and in which order.
In what order should we simplify a group of overseas companies?
Map before you move. Ownership and classification first, because they decide what every later step means. Then the character of what has accumulated in each entity, since that determines what a distribution or a wind-up produces. Then the reporting each entity attracts, which tells you what the simplification is actually saving. Only then choose the sequence of removals, and expect that sequence to be spread over more than one year. Collapsing several entities at once stacks taxable events into a single period with nothing available to absorb them.
Should I use a branch or a subsidiary abroad?
A branch is the same legal entity operating in another country, so its profits and losses sit with the parent and it is taxed there as a permanent establishment. A subsidiary is a separate company, taxed in its own right, with dividends and withholding on the way home. Losses, repatriation cost and liability usually decide it, and the answer differs by country pair. See branch vs subsidiary.
What is FAPI, and how does it differ from GILTI?
Canada's foreign accrual property income taxes a Canadian shareholder currently on the passive income of a controlled foreign affiliate — interest, rent, royalties, certain gains — with a deduction that recognises foreign tax already paid on it. GILTI comes at the problem from the opposite side: it targets active income above a return on tangible assets. A group with both a Canadian and a US shareholder can therefore be inside both regimes on different slices of the same profit. See GILTI against FAPI.
