Where to Register a Company? Choosing a Jurisdiction

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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!

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