Each entrepreneur, having decided to start a business, will seek favorable conditions for his enterprise. A taxation is an important aspect, that you should pay special attention to. To register a company in a country with low taxes, you need to study carefully the main and secondary aspects of taxation in the chosen jurisdiction.
This article is informative and relevant at the time of its publication
10 low tax jurisdictions
The Republic of Malta is considered the largest center of international business. Choosing it as a low tax jurisdiction to register a Maltese company, you should know, that the standard corporate tax rate is 35% here.
But it is important to note, that entrepreneurs, who decide to open a company in Malta, have an opportunity to reduce this tax by 5% - 6%. A VAT is 18%. And a dividend tax is 0%.
This country is a member of the EU and can be a good option for those, who wish to open a company in a state with low corporate taxes. There is a territorial tax system.
When deciding to establish an enterprise in Hungary, keep in mind that:
- An income tax is 9% (+ 2% is a minimum tax base);
- A VAT is 27%. The rate may be reduced:
- for dairy products, pastries, etc. a rate is 18%;
- on medicines, books and newspapers a rate is 5%; and
- for financial or investment services a rate is 0%.
The Republic of Macedonia is another jurisdiction, that can be taken into account for those, who wish to start a business in a low tax state. Here, a standard corporate tax rate is 10%. It is also worth noting, that companies, that do not engage in gaming or banking, with incomes of 50,000 to 100,00 EUR per year, will be subject to a minimum tax rate of 1%.
Before choosing Switzerland as a low tax jurisdiction to register a company, it is important to understand its tax system. You need to know, that a corporate tax is levied at the federal, cantonal and municipal levels.
When deciding to register a company in Switzerland, pay attention to the following information:
- Federal value added tax is levied at a flat rate of 8,5% on profit after taxes. This means, that the income tax is deductible, when paying taxes, while reducing taxable income. As a result, a rate is approximately 7,83%. At the federal level, a corporate capital tax is not levied.
- Each canton has its own tax laws. The tax rate varies from 11,4% to 24,2%, depending on the canton in which the company is registered.
Hong Kong is the administrative region of the PRC. It can also be taken into account by entrepreneurs, who have plans to open a company in a jurisdiction with a low tax system. When registering a Hong Kong company, you need to know, that there is no tax on profits, earned outside of Hong Kong. A corporate tax is 16,5% on activities, carried out in this jurisdiction, and the dividend tax is 0%.
When opening a business in Singapore, please note, that the current corporate tax rate is 17%. It applies to all company revenues, that were received in Singapore itself or transferred here from outside the jurisdiction.
It should be noted, that when registering a Singapore company, you have the opportunity to partially exempt from taxes:
- from the first $7 024,45 in profit, 75% will be exempt from tax; and
- from the following $270 483,96 in profit, 50% will not be taxed.
It is a country, that holds high positions in world rankings in terms of ease of doing business and ease of a company registration. Ireland is another option for those, who want to register a company in a low-tax state. When registering an Irish company, you need to be aware, that a corporate tax rate is 12,5% here. If your profit is passive, then it will be taxed at 25%.
Bulgaria is a state, that is one of the founders of the Organization of the Black Sea Economic Commonwealth, as well as a member of the EU. Investors, planning to set up an enterprise in Bulgaria need to know, that a corporate income will be taxed at 10%. An alternative tax of 15% will be levied on gambling establishments and telecommunication service providers. A VAT is 20%.
Businessmen, who are inclined to register a company in a country with a low tax system, can turn their attention to Montenegro. Here a corporate tax rate is 9%. Non-resident companies will be taxed on profits, earned in Montenegro, and resident companies will be taxed on profits, earned worldwide.
Cyprus is among the low tax jurisdictions. A state corporate tax is 12,5%.
Doing business in Cyprus, you need to know that:
- A VAT is 19%;
- A dividend income and capital gains tax are 0%.
YB Case specialists provide services for selecting low-tax jurisdictions for a company registration. In order to receive more detailed information, it is necessary to order personal advice on registering a company in countries with a low tax system. Taking into account all the details and nuances of your business, we are ready to guarantee you an individual approach and quick feedback.
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