Jurisdiction selection for a company from Nexus
In theory, a company for international business can be registered in almost any country in the world. However, practice shows that the choice of jurisdictions with which to work effectively is not so great.
That is why we strongly recommend that anyone interested in setting up a business abroad should take a comprehensive approach to choosing a jurisdiction, taking into account all the nuances not only for immediate benefit but also for the long term.
What factors do we take into account during the selection process?
Each case is different, but we will describe several important factors that can be decisive:
1. The purpose of establishment. If your goal is to open a trading company, we suggest considering jurisdictions with low income tax rates. The most popular are Malta – 5%, Cyprus -12.5%, Ireland – 12.5%, Hungary – 9%.
If your goal is to sell your business later, you can also consider the USA, the UK and Singapore. Investors are eager to buy companies registered in these countries.
Cyprus, Malta, Hungary, England or Ireland are well suited for the role of a holding company. Luxembourg and Liechtenstein can also be considered if you have significant assets.
2. Personal goals of the owner. When setting up a business is a way of obtaining foreign residence or a residence permit, the option is obvious. In this case, there is a link to a specific country in which the business should be registered.
3. The cost of registration and maintenance. When choosing, it is important to focus not only on the estimated tax rates, but also on the
- the cost of registration and further business maintenance;
- the possibility of opening a bank account (opening an account can be extremely difficult: not every foreign jurisdiction allows you to do it remotely or through a trustee);
- ease of reporting (including the presence/absence of the need for an in-house accountant).
And this is just the tip of the iceberg.
Today, it is also necessary to take into account the tax residency of shareholders, taxation rules for controlled foreign companies, the risks of recognising a company as a tax resident in the country of residence of a director or owner, the existence of double taxation treaties, and much more.
It is difficult to even list all the pitfalls and consequences of the choice.
How can we help you?
- We will help you analyse all possible options and choose the best one based on your goals/wishes/opportunities and other nuances.
- We will show you exactly how the company will work in connection with the account.
- We will take into account the taxation risks in your country of residence to protect you from double taxation.
Please contact us via the form below for a free consultation.