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Tax Havens Unveiled: Best Tax-Free Countries for Incorporating Your Company

Would you like to maximize your business’s profitability while maintaining legal and ethical practices? The International Wealth team of tax experts can assist you in selecting the ideal jurisdiction for company registration abroad or opening a bank account in Europe, America, or Asia. By choosing a jurisdiction with favorable tax policies, you can significantly reduce your company’s tax burden and allocate your funds toward business expansion and innovation. Let International Wealth help you navigate the complexities of international tax laws and make informed decisions for your company’s financial success. 

Tax-Free Countries for Company Registration

Harnessing the benefits of tax-friendly jurisdictions 

The term “tax haven” used to be exclusively applied to offshore jurisdictions, but now it can be applied to many countries worldwide that offer favorable tax policies. These jurisdictions are not your traditional offshore havens. They confer various tax advantages to foreign businesses and wealthy non-residents. These tax havens include countries that may seem to have high taxes on the face of it, such as the United States or Malta. However, by leveraging special conditions and taking a closer look, you can reduce your effective tax rate to as low as 5% or even zero. 

Cyprus and Malta are often cited as prime examples of European nations with advantageous tax regimes for non-residents. No taxes are levied on any income earned beyond their borders. However, when it comes to the capital brought into their territories or income generated within, a rather steep tax rate ranging from 20% to 35% is applied.

It’s important not to overlook the well-known offshore havens as they remain popular with businesses seeking tax advantages. Destinations such as the Bahamas or Bermuda are known for offering a zero tax rate for companies and international businesses.

In light of this, we would like to share with you 2 distinct lists: one that showcases countries with business-friendly tax systems and another that highlights countries with tax-free environments for companies.

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Top-10 jurisdictions with low tax burdens 

In today’s globalized world, many countries strive to attract international businesses by offering lower tax rates and favorable regulations. From European countries to the Caribbean islands, and even across Asia and the Middle East, there are various destinations to choose from. Let’s explore the most sought-after and popular ones that offer opportunities for businesses to register and benefit from reduced tax rates.

Switzerland  

Switzerland

The influx of foreign capital into the country amounts to trillions of dollars, with an annual growth rate of at least 3%. The statistics may have changed in 2022-2023, but we continue to keep a close eye on the situation.

Interestingly, the capital is not only sourced from neighboring European countries but also from distant regions across the globe. Switzerland, in particular, is widely acknowledged as a financial hub, drawing the interest of many affluent individuals and thriving business people from different corners of the world who aspire to open Swiss bank accounts.

The country’s distinctiveness lies in its sovereignty and federal system, wherein each canton establishes particular terms for businesses to lure investors and capital.

A popular practice is a fixed-tax arrangement, wherein non-residents agree to pay a set sum of taxes in exchange for a Swiss residency permit. This lump-sum tax is levied irrespective of the income earned, making it a particularly enticing choice for affluent and accomplished entrepreneurs.

Hong Kong

Hong Kong

Incorporating a business in Hong Kong is a smart move for accessing the Asian market and expanding technological ventures. Hong Kong is a Special Administrative Region of China. Although not a country, it attracts a considerable amount of capital that is almost on par with Switzerland and boasts a much higher annual growth rate.

Entrepreneurs who register their companies and conduct business from Hong Kong enjoy the benefits of territorial taxation principles, where they are not liable to pay taxes on global income. In addition, there is neither value-added tax nor taxes on dividends, capital gains, or interest on deposits. Moreover, Hong Kong has signed several international agreements to avoid double taxation.

Singapore 

Singapore 

Singapore is a thriving hub for business and capital placement, and similar to Hong Kong, it is considered a successful midshore jurisdiction. Despite its status as a fully-fledged country, it may be challenging to open a bank account in Singapore. Yet, it is a strategic move to securely and optimally allocate your assets.

By choosing Singapore as a business destination, you can receive various tax benefits. Besides, your non-residents’ income is initially taxed at a lower rate. Capital gains, dividends that are distributed to shareholders, and foreign-sourced income that is not imported into Singapore are not taxed. Additionally, the standard corporate tax rate is relatively low at 17%.

USA  

Wyoming

The United States tax system is notoriously complex, but for those with significant wealth and business interests, there are numerous advantages to be gained. Each state operates as a unique jurisdiction with its own tax laws, and there are states that levy income taxes at incredibly low rates. The country offers a plethora of tax benefits and preferences to entrepreneurs, making it an attractive destination for business investment.

The United States offers numerous tax benefits for entrepreneurs in certain regions, particularly in the fields of IT and startups. Moreover, farmers and small business owners are eligible for considerable tax breaks in specific areas. 

States such as Delaware, Nevada, and Wyoming are known to be internal offshore havens. When combined with external offshore jurisdictions, they make it possible for you to approach a zero-taxation rate if specific conditions are met.

With International Wealth, you can open a personal bank account in the USA remotely completely issue-free.

UAE 

UAE 

Setting up a company in the United Arab Emirates can be a smart move for big businesses. The country comes with a permanent or temporary exemption from some taxes.

In the UAE, there are no personal or corporate income taxes, capital gains taxes, or property taxes. This means the UAE is a country with no income tax. Expats are not required to pay social contributions. The UAE is a robust logistics and commerce center, constantly expanding. The country is working hard to establish a powerful manufacturing industry and is providing advantageous conditions to achieve this goal.

United Kingdom 

United Kingdom

In the United Kingdom, tax advantages are available to non-residents. Unlike them, British citizens face less favorable conditions. Non-British individuals and residents who have not acquired domiciled status are exempt from paying tax on their foreign income that has not been imported into the country.

If you plan on registering a UK-based company and opening a bank account to optimize your taxes, it is crucial to seek advice from International Wealth experts. We have various pre-designed models and suggestions on how non-residents can legally reduce their tax burden by efficiently utilizing legislative provisions in the United Kingdom.

Monaco

Monaco

Associated with France, Monaco is a small state that offers excellent conditions for doing business to both companies and affluent individuals. Monaco is known for its luxurious lifestyle, picturesque locations, and world-class amenities.

One of the key benefits of living in Monaco is the lack of taxes that exist in other countries. Residents’ incomes are not taxed, making it an attractive destination for HNWIs. Foreigners can obtain a residence permit or citizenship by investing a significant amount of money in Monaco. Certainly, they shall also meet certain criteria.

With a company set up in Monaco and at least 75% of your turnover generated within the country, you can legally avoid corporate income tax. Start-up businesses enjoy significant tax benefits in the jurisdiction.

Monaco offers many opportunities for company development, and the International Wealth experts can provide you with recommendations on how to make the most of them for your business.

Cyprus 

Cyprus

In Cyprus, there is no property tax and the corporate income tax rate is quite low. Moreover, there are some tax exemptions available for business people who do not reside in the country permanently.

By incorporating a company in Cyprus, you gain access to one of the lowest corporate tax rates in the European Union, set at 12.5%. The country’s tax system is structured to provide tax exemptions and incentives for non-domiciled individuals. It makes Cyprus an attractive destination for foreign investors looking to minimize their tax burden.

In addition to the low corporate tax rate, Cyprus companies enjoy a range of tax benefits, including exemptions from taxes on dividends, interest, and rental income. This makes Cyprus an ideal location for businesses looking to establish a foothold in the European market while minimizing their tax exposure.

To learn more on the subject, you are welcome to seek advice from the International Wealth team of experts. They can also guide you through the process of opening an account

Malta 

Malta

Malta offers a unique taxation system, whereby foreign businesses can receive substantial tax refunds. The eligibility criterion is straightforward: a substantial portion of the trading volume must originate outside the island. The procedures for submitting financial statements and claiming refunds are transparent and straightforward.

Malta comes with a Global Residence Scheme, an immigration program designed to optimize fiscal payments for tax purposes. This program is especially appealing to non-residents looking to minimize their tax obligations, and we highly recommend exploring it.

Malta’s reputation as a premier business hub has been well-established. Registering a company in Malta offers numerous benefits, including favorable tax planning opportunities. One of the most significant benefits is the “participation exemption” status, which allows non-resident companies to exclude dividends and capital gains from their taxable income. Malta also boasts multiple double taxation agreements, and currency risks associated with taxation matters are eliminated. 

Panama

Panama

Thanks to its territorial tax system, Panama has been a trusted midshore jurisdiction for many years. This means that any income earned outside of Panama is not subject to taxation, making it an attractive option for foreign investors. NB: Panama has implemented strict measures to protect the privacy of personal data, ensuring the safety of sensitive information.

It’s possible to register a company in Panama remotely. Once the company is established, feel free to open a bank account for it.

Register your company in a country with no tax: top jurisdictions to consider

When it comes to truly tax-free countries, there are 10 that stand out as the best.

Bahamas

Bahamas

The Bahamas is considered one of the most well-established offshore jurisdictions that offer a zero-tax regime for companies. This means that businesses are exempt from paying taxes on their profits, capital gains, dividends, and royalties. Individuals also enjoy a favorable tax system in the country and often choose to open a bank account in the Bahamas.

Bahrain 

Bahrain

Bahrain, a small Arab nation, is gaining recognition as a top destination for offshore companies. With a zero corporate tax rate, it is easy to set up a business and open a bank account for it to maximize tax benefits. The only exception is for oil extraction cases. NB: for individuals, Bahrain is a no-income-tax country. For further information on municipal and social taxes, we encourage you to consult the International Wealth expert team. 

Bermudas

Bermudas

Bermuda is a well-established offshore destination and one of the most renowned and trusted options available. Remote company registration is possible, but the cost of services is notably high, likely since some of the world’s biggest corporations are registered here.

BVI

British Virgin Islands

The British Virgin Islands has been a top destination for registering foreign companies for a long time. Business is known to speak the language of money, and at International Wealth, we can help you remotely register your company and assist with opening bank accounts. FYI: the local currency in the BVI is the US dollar, thus making it a unique offshore jurisdiction.

Nevis

Nevis

St. Kitts and Nevis is a tropical paradise consisting of 2 islands. The latter are known for their stunning beaches, Caribbean lifestyle, highly secure offshore trusts, trustworthy companies, and the world’s oldest investment-based citizenship program. 

If you want to avoid paying taxes in Nevis, you’ll need to earn income outside of the country. What’s even more enticing is that by setting up a company in Nevis, you can take advantage of one of the most reliable asset protection systems in the world, giving you peace of mind that your assets are safe and secure.

In addition to company incorporation, the International Wealth profs will also assist you with opening bank accounts in Nevis.

Cayman Islands

Cayman Islands

The Cayman Islands are known for their breathtaking beaches and crystal-clear waters, making them a top tourist destination. The country’s economy is heavily reliant on the financial sector, with the majority of the workforce employed in the offshore banking and investment industries. As a result, the government has created a tax-friendly environment for businesses, with no corporate or capital gains tax.

Vanuatu

Vanuatu

Vanuatu, a stunning island nation located in the South Pacific Ocean, has become a sought-after destination for offshore business activities. The remote registration process for companies makes it a convenient option for entrepreneurs looking to establish a global presence. Vanuatu’s tax laws are extremely business-friendly, with virtually no taxes imposed on profits. This allows businesses to operate without the burden of heavy taxation, freeing up resources to invest in growth and expansion.

At International Wealth, we incorporate Vanuatu companies for you and assist with bank account setup in the jurisdiction. 

Jersey

Jersey

For entrepreneurs looking to establish an offshore company, Jersey is an attractive European option to consider. Situated in the Channel Islands, Jersey offers a business-friendly environment with a range of tax benefits. Businesses registered in Jersey are exempt from paying corporate tax, except for certain exceptions that apply to specific industries. With no tax on capital gains, businesses retain more of their profits.

Guernsey

Guernsey

Guernsey, located in the English Channel, is another European offshore jurisdiction that offers attractive tax benefits for businesses. Companies registered in Guernsey enjoy a zero tax rate on profits, making it an appealing location for entrepreneurs who seek to minimize their tax obligations. NB: certain industries are still subject to taxes, including those operating in the financial, real estate, and oil sectors. 

Isle of Man

Isle of Man

Similar to Jersey and Guernsey, the Isle of Man is a self-governing British Crown dependency and an offshore jurisdiction. Businesses can be established remotely, and there is no tax on profits.  Service providers on the island are accustomed to working with offshore companies and can provide valuable support and expertise. 

How to choose the right jurisdiction with low or no taxes

To fully benefit from the advantages available to non-residents in each jurisdiction, you need to plan accordingly. To get started, reach out to the International Wealth team of experts by email. Alternatively, feel free to use the contact options at the top of the page. Our team will help you navigate the nuances of each jurisdiction and guide you toward the best course of action to achieve your goals.

At International Wealth, we understand that selecting the right country or territory for your business is critical for you to succeed. To ensure that you make the best decision, we consider 6 key aspects:

1

Unique characteristics of your business, including the nature of your activities, the direction of growth, and the scale of operations.

2

Your preferred legal company structure, with due account for the long-term goals and tax considerations.

3

Residency status and country of residence of your shareholders, as well as the number of shareholders involved.

4

Business objectives, both short-term and long-term, and how they align with the opportunities available in different jurisdictions.

5

Plans for future expansion and development, and how the chosen jurisdiction can support your goals.

6

Cash flow turnover and specific requirements for banking and financial services, to ensure that you have the necessary resources to succeed.

At International Wealth, we understand that selecting the right jurisdiction for business requires careful planning and expert advice. That’s why we ask our clients to fill in a specialized form that allows us to capture all of the critical details related to their business needs.

Once we have collected this information, the International Wealth team of experts will conduct a thorough analysis of your current capabilities, taking into account your business development plans, your desired legal structure, and other key factors. We’ll then explore the tax optimization options available in each of the jurisdictions that are most attractive for your type of business so that you can make an informed decision about where to establish a company.

FYI: Top 5 European countries with the lowest corporate taxes, tax rate in %:

Montenegro and Hungary9
Bulgaria10
Cyprus12.5
Lithuania15

To request a consultation with the International Wealth profs, please email us at: [email protected].  

Is it possible for a foreign business to obtain tax exemptions?

To select the most suitable taxation model, it’s essential to analyze the scope and area of your business. Several factors come into play here, including the nature of business, the characteristics of operations and counterparties, the percentage of total income earned within the country of company registration, and other crucial details. The International Wealth team of experts will gladly help you identify a jurisdiction that will minimize the tax burden on your business.

What country comes with the best taxation system?

Based on surveys conducted in 2020, Estonia has been ranked as the best jurisdiction for taxes. According to the recently published Tax Competitiveness Index of 2020, Estonia has been leading for 7 consecutive years as the country with the best tax code within the OECD. The International Wealth team of experts can help you with company registration in Estonia, ensuring that you benefit from the tax advantages available.

What country has no taxes?

Monaco is a well-known tax haven because of a set of laws that affect the taxation of both corporations and private individuals. Monaco residents are not required to pay taxes on their income. Any individual who lives in Monaco for 6 months or longer automatically becomes a resident and is exempt from paying income tax. Discover how to obtain a residence permit in Monaco and enjoy its many benefits.

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