Savings on corporate income tax is a common reason for moving a company to another country. Many business people look for better tax rates in foreign countries to relocate their business if the tax burden in their country of incorporation becomes too large.
When mentioning low taxes, the first thing that comes to mind is classic offshore jurisdictions, but times have changed and continue to change. Offshore jurisdictions have begun to massively change their legislation to get out of the EU blacklist and comply with the requirements of the OECD and FATF.
This state of affairs has forced many countries to change their tax policy, creating more favorable conditions for business to stimulate investors. Nowadays, favorable corporate tax rates can be found not only in remote island offshore jurisdictions but also in Europe, Asia, and other parts of the world.
International Wealth experts prepared an overview of countries with favorable tax rates for business. Below we take a closer look at some of these countries.
Countries with the best corporate tax rates in 2023
If you are considering starting a business abroad or moving an existing business, you should consider these low-tax jurisdictions:
- Estonia rightfully belongs to the countries with lowest taxes in Europe. This country is quite popular among foreign business people, offering a corporate tax rate of 20%. However, no tax is paid as long as the profits are reinvested back into the company (not distributed as dividends). Also, Estonia offers to register a company in a free trade zone, which will allow you to get rid of VAT and duties. And addition, you can open a limited partnership (LLP) that is not subject to corporate taxation. Taxes are paid by LLP owners at the place of their tax residence.
- United Arab Emirates is a jurisdiction that attracts investors from all over the world. One of the main reasons is 0% corporate tax and the right to 100% ownership of a company by a foreigner if it is registered in a free zone. In 2023, this country plans to introduce a 9% corporate tax, but it will not apply to all companies.
- Singapore collects corporate tax from resident companies at a rate of 17%. If the company is non-resident (no business activity and banking operations in the country, management is carried out from outside), it is possible to avoid corporate tax on foreign profits. There is also no capital gains tax, VAT, sales tax, and withholding tax. However, if the profit goes to a bank account in Singapore, then you need to pay a tax of 17%. At the same time, the Singapore authorities introduce attractive tax incentives to attract foreign investment. For example, the first SGD 100 thousand is not taxed if the company has up to 20 shareholders.
- Canada - at first glance, few people consider it to be a country with low corporate taxes. The state has a progressive corporate income tax rate from 15% to 33%. However, by registering a limited partnership, you can achieve zero tax on company income and, at the same time, get a high-class, reputable entity for international activities. Interestingly, Canada has perhaps the lowest VAT rate for business - 5%. Registering a company in Canada also benefits from the ability to carry forward operating and capital losses for 20 years or more.
- Panama offers a corporate tax of 25% for companies operating in the country. However, if the profit is received outside the country, the corporate tax is 0%. In addition, Panama offers a developed banking sector, an advantageous location, and US dollars as a local currency. The VAT rate in this country is 7%.
- Hong Kong over the years has made a lot of efforts to attract foreign investors and international companies. The jurisdiction has created a two-tier income tax scale, depending on the turnover. Registering a company in Hong Kong involves the payment of taxes ranging from 8.25% to 16.5%. Local businesses get a tax credit on their first HKD 2 million in profits. Hong Kong has a territorial tax system. It is possible not to pay tax on profits received outside the country. Also, Hong Kong offers tax breaks on R&D costs and some other capital investments.
How to register a company in a low-tax jurisdiction quickly and safely
Jurisdictions with no corporate tax or with a low corporate tax rate look very attractive. However, choosing the best country for registering a company is quite difficult. To get the maximum benefit from a foreign company, many factors need to be considered:
- your goals
- type of business
- and much more.
A good option would be to get more information about how the registration of a company in another country goes, how it will help reduce taxes, and how to choose the right country in principle. It will be much more profitable to turn to professionals such as International Wealth.
Experienced specialists will help you not only choose the ideal jurisdiction and the type of company that suits your goals but also take care of all the hassle of registering a company and opening accounts. In addition, experts will help to open a bank account in Europe
or another part of the world for the investor and their family.
Working with trusted professionals in the field of international business has many advantages, among which are:
- avoiding additional costs and waste of time
- guarantee of a successful result when providing the necessary information and documents
- high speed of opening a company and accounts
- a wide range of additional services that will make your life and doing business much easier
- cooperation with the best international banks and reliable registered agents
- assistance in choosing and buying real estate abroad.