Is it easy to choose a proper jurisdiction to incorporate
your company? No, it is not. You will have to take a lot of factors into
consideration and pick the country that will be well-suited for your business.
One choice that would be the best for the majority of entrepreneurs simply does
not exist as the starting conditions and the goals create the unique
combination which predetermines the choice.
If you are not very experienced in the laws of different
countries and the intricacies of business registration, we would like to invite
you to International Wealth, our portal that contains an extensive knowledge
base of articles on company registration, international banking, business, and
other topics that are usually relevant for entrepreneurs. The full version of
this post on choosing the country for registering a company is also available on our portal.
The quickest and easiest way to choose a suitable
jurisdiction is to book a one-on-one session with our expert “ simply follow
the above link and use a live chat or any other method available on the portal.
We do not charge anything for choosing the right jurisdiction after a thorough
analysis of your situation. However, if you decide to register a company with
our help by delegating all the administrative tasks to us, we will be happy to
do so at an affordable fee.
Questions to Ask Yourself Before Registering a Business
Even if you choose a jurisdiction with the help of our
specialist, you will need to ask yourself seven essential questions that will
determine the choice. Let's look at these and discuss their importance.
1. What is Your Nationality?
Your nationality will have an impact on the way you will be
treated when it comes to company registration. For example, if you are from
North Korea (which is under sanctions), you will not be able to set up
non-resident accounts and companies in most countries. There are also
nationalities that have a reputation as high-risk ones, so they will be
subjected to more checks and restrictions, and additional documents may be
required.
Our specialists are sure to ask that question as your
nationality will determine the whole strategy. Some restrictions are implicit “
however, we know from practical experience that they may be applied. If your
nationality gives you a limited choice, you can acquire a second passport by
investment and act as a citizen of another country.
2. What is the Country of Your Legal and Tax Residence?
Nowadays, citizenship and residence are no longer the same:
people may have several citizenships, live in another country, and have a tax
residence in one more country. All these nuances have to be taken into account
to choose the best jurisdiction. Some destinations oblige their tax residents
to declare any assets they have abroad, including accounts and companies, and
you should be aware of that. Failure to do so may result in heavy fines.
Countries may also have strained relations due to political
or historical matters, and these factors should also be taken into account.
3. Where Do Your Clients Live?
If you target the customers of a particular country, the
place where you register your company should meet its requirements and have
friendly economic relations with it. If you sell to Latin America, Panama is a
good place for incorporation. However, it will not work well if you sell to
India.
Your products or services should be legally allowed to be
sold in a particular country. What is more, you have to know very well whether
you will need to pay taxes in the country whose residents buy goods from you.
For instance, selling a product to an EU resident will mean that you will have
to pay VAT by applying the rate of the country where your customer lives.
4. Where Will Your Employees Live?
Many jurisdictions require a company to have substance (real
presence) in a particular country to be considered its tax resident. Therefore,
issues may arise if your company is registered in Hong Kong, while your
employees are actually in Cyprus. Will that be a Hong Kong or a Cyprus company?
You need to be clear about that to know the tax rates you are legally entitled
to.
5. How Will Your Company Accept Payments?
If you consider bank transfers as the only payment means,
you need to know how much you will have to pay to the bank (commissions, fees,
etc.).
Electronic payments and bank cards mean that you need to
open a merchant account or use the services of intermediaries, such as Stripe
or PayPal.
If you have a high-risk business or you need crypto
payments, you will have to find a bank or a payment system that will fit these
requirements.
Several solutions may be possible, and in this case, you
will have to simply calculate which one will be more profitable in the long
run.
6. How Will You Receive Personal Income?
You can become a company employee or get a salary, own
shares and receive your profits in the form of dividends, or choose any other
existing alternative. However, mind the tax implications of your decision: if
you are an offshore company director, you may have to pay taxes in the offshore
jurisdiction. And if you receive dividends from your offshore company while
living in another country, you may be taxed at the rates of your country of
residence.
7. What Will You Sell?
If you provide services, you should know that they are taxed
at the place of provision. That is, if you work online from Nevis, you will not
pay taxes as this is a tax-free jurisdiction.
Digital products are taxed in the country where they are
produced. However, you may be liable for a sales tax in a buyer's country (the
case of all EU countries).
And if we are talking about physical products, you will be
liable for taxes in the country of manufacturing, in transit/storage, and while
making sales. In this case, we strongly recommend seeking a specialist's advice
to figure out how to avoid some taxes and expenses.
Conclusion
As soon as you have successfully answered all the above
questions, you can click on the above link and book a session with our expert.
As you have thought of the most important aspects in advance, we will shortlist
the best options very quickly!
