Trust management. Managing Your Business Effectively.
12.05.2008,
Have you ever considered the possibility of cutting costs by outsourcing the management of your company? Do you know that you can run your business in a foreign country without putting in place a local CEO and thus operate your company “virtually” from your home country? Mr Rudolf Vrestal, Managing Director of ASB Prague explains the main advantages of running your day-to-day business through so-called Trust Management.
The scope of work of the Trust Manager may vary according to the business concept. The Manager can cooperate with the client on management, take broader responsibility for a branch, or even establish a new entity. “The main benefits of a Trust Manager are a combination of his excellent knowledge of the local market and the effective allocation of costs,” says Rudolf Vrestal and adds: “We assume a liability for our managers to cover any potential risks for the client by executing a service agreement with the client.”
Despite the many advantages, this concept is not suitable for every part of business. Trust services essentially cover a primary company’s operations such as administration, accounting, legal issues and, finally, the company’s management. It allows the client to focus on his core business instead of spending too much time on operative decisions. Trust Management is therefore typically used by investors who establish or expand their business in the Czech Republic and for whom placing their own CEO on site would be too complicated, uneconomical and time-consuming.
First of all, each company established under Czech law is to appoint at least one person to represent the company vis-à-vis third parties. This person is called either the Executive (jednatel), in the case of limited liability companies, or the Member of the board of directors (clen predstavenstva) in the case of joint-stock companies. The Trust Manager represents the company vis-à-vis third parties, including state authorities such as the financial office, trade office, labour office, social security and health insurance companies, and the commercial court in corporate registration matters.
The Trust Manager takes care of the company’s accounting matters and is legally liable for the accuracy of the company’s accounts. Upon individual agreement with the client, accounting services can be performed by the service company itself. If the client decides to finance its acquisition activities through external financing, the Trust Manager can assist him in various transactions and offer contacts at the main financial institutions on the Czech lending market. In terms of tax reporting, the Trust Manager is responsible for due and timely preparation and filing of annual tax reports, periodical income tax and VAT filings, and providing full cooperation with the tax authorities in the event of regular accounting controls.
”Realizing all legal steps that are to be undertaken anyway, you naturally look for a simple solution that fulfils necessary regulations according to Czech legislation and keeps your expenses at a minimum. The aim of trust services is to provide you with the most optimized solution,” summarizes Rudolf Vrestal.
A decision to use a Trust Manager relies on the client’s confidence in the service company and it works best in a long-term business relation. On the Czech market, this business is not yet as common as it is in some other market economies. However, there are some well-established trust service companies here already.
“Trust Management substitutes the function of a continuous supervision over the client’s local business interests. Clients can then focus on further investment possibilities in the secure knowledge that their Czech business operations will be under the professional control of the ASB managers. These professionals ensure smooth running of a business on one hand, and regular reporting with a high level of confidence on the other,” says Rudolf Vrestal, before revealing the main secret of his company: “An individual client approach and new, complex, solutions are the crucial points of our philosophy: ‘Always Smart Business’.”
Rudolf Vrestal, Managing Director, ASB Prague
Contact: Rudolf Vrestal, Managing Director
ASB Prague, s.r.o., V Celnici 1031/4, Prague 1, 110 00, phone: +420 224 931 366-7
E-mail: rvrestal@asbprague.com; www.asbprague.com
Is Trust Management suitable for your business?
Trust Management could be simply explained as the outsourcing of a company’s management to a local Trust Manager with professional skills and a senior-level managerial experience.The scope of work of the Trust Manager may vary according to the business concept. The Manager can cooperate with the client on management, take broader responsibility for a branch, or even establish a new entity. “The main benefits of a Trust Manager are a combination of his excellent knowledge of the local market and the effective allocation of costs,” says Rudolf Vrestal and adds: “We assume a liability for our managers to cover any potential risks for the client by executing a service agreement with the client.”
Despite the many advantages, this concept is not suitable for every part of business. Trust services essentially cover a primary company’s operations such as administration, accounting, legal issues and, finally, the company’s management. It allows the client to focus on his core business instead of spending too much time on operative decisions. Trust Management is therefore typically used by investors who establish or expand their business in the Czech Republic and for whom placing their own CEO on site would be too complicated, uneconomical and time-consuming.
Why do you need an experienced representative for legal issues?
In order to fully understand the contribution of the Trust Manager, let us take a look at the basic legal requirements needed to form an entity in the Czech Republic.First of all, each company established under Czech law is to appoint at least one person to represent the company vis-à-vis third parties. This person is called either the Executive (jednatel), in the case of limited liability companies, or the Member of the board of directors (clen predstavenstva) in the case of joint-stock companies. The Trust Manager represents the company vis-à-vis third parties, including state authorities such as the financial office, trade office, labour office, social security and health insurance companies, and the commercial court in corporate registration matters.
The Trust Manager takes care of the company’s accounting matters and is legally liable for the accuracy of the company’s accounts. Upon individual agreement with the client, accounting services can be performed by the service company itself. If the client decides to finance its acquisition activities through external financing, the Trust Manager can assist him in various transactions and offer contacts at the main financial institutions on the Czech lending market. In terms of tax reporting, the Trust Manager is responsible for due and timely preparation and filing of annual tax reports, periodical income tax and VAT filings, and providing full cooperation with the tax authorities in the event of regular accounting controls.
”Realizing all legal steps that are to be undertaken anyway, you naturally look for a simple solution that fulfils necessary regulations according to Czech legislation and keeps your expenses at a minimum. The aim of trust services is to provide you with the most optimized solution,” summarizes Rudolf Vrestal.
Why is Trust Management so cost-efficient?
Generally speaking, Trust Management is an efficient way of running a client’s business, yet remains under the client’s full control. By using a Trust Manager, investors save costs on personnel expenses, including headhunters, high salary requirements and other extra expenses associated with supporting Czech CEOs (car, phone, IT support); they can further benefit from transport and logistics savings and, in the end, become much more time-effective.A decision to use a Trust Manager relies on the client’s confidence in the service company and it works best in a long-term business relation. On the Czech market, this business is not yet as common as it is in some other market economies. However, there are some well-established trust service companies here already.
Why ASB wins the trust
ASB Prague, is such a company. Since 2001, this Czech consulting company has been providing its clients with a wide range of corporate, accounting and personnel services. ASB is specialized in Trust Management that has been primarily used by foreign real estate funds. However, this service is now becoming more popular with foreign and domestic companies investing in other fields and using different levels of trust services.“Trust Management substitutes the function of a continuous supervision over the client’s local business interests. Clients can then focus on further investment possibilities in the secure knowledge that their Czech business operations will be under the professional control of the ASB managers. These professionals ensure smooth running of a business on one hand, and regular reporting with a high level of confidence on the other,” says Rudolf Vrestal, before revealing the main secret of his company: “An individual client approach and new, complex, solutions are the crucial points of our philosophy: ‘Always Smart Business’.”
Rudolf Vrestal, Managing Director, ASB Prague
Contact: Rudolf Vrestal, Managing Director
ASB Prague, s.r.o., V Celnici 1031/4, Prague 1, 110 00, phone: +420 224 931 366-7
E-mail: rvrestal@asbprague.com; www.asbprague.com