IT startup — R&D Audit & International Expansion

The challenge

Startup we have advised is a Croatian sports technology company with existing R&D projects and ambitions for international expansion. They came to us with two specific needs. The first was a review of their R&D project documentation and obligations — ensuring that the projects were compliant with programme requirements and that the reporting and audit trail was in order. The second was a structured assessment of the legal, tax, and financial framework for expanding operations internationally — understanding what obligations and structures they would need to navigate as they moved into new markets.

International expansion for software companies looks deceptively simple — the product travels easily — but the legal and financial reality is considerably more complex, particularly when it comes to tax treatment of software revenues, transfer pricing, permanent establishment risk, and the regulatory requirements of target markets.

What we did

The R&D project review involved a systematic examination of the project documentation, expenditure records, and reporting against the requirements of the relevant programme. We identified gaps and inconsistencies, developed a corrective action plan, and worked with the Startup team to ensure the project record was in order for any future audit.

For the international expansion analysis, we mapped the key legal and financial considerations across the markets Startup was considering — covering corporate structure options, tax treatment of software licence revenues, VAT obligations, employment law implications for any local presence, and the specific regulatory requirements of each target market. The analysis was structured to give the company’s leadership a clear decision framework: what questions need to be answered before entering each market, what the key risks and dependencies are, and what external expertise (legal, tax, accounting) they would need to engage in each jurisdiction.

This kind of analysis requires both general knowledge of international business law and tax principles, and specific knowledge of the sectors and markets involved — including the specifics of how sports technology solutions are typically commercialised and what the regulatory landscape looks like for data-intensive sports applications.

Outcome

R&D project documentation reviewed and corrective actions implemented. International expansion framework delivered, informing strategic decisions on market entry sequencing and corporate structure.