This article outlines the tax implications of company formation in individual European countries.
Liechtenstein
In Liechtenstein, we can choose from several company forms for conducting international trade. In addition to the “well-known” forms such as a joint-stock company or a limited liability company, an institute and a private foundation can also serve as the legal framework for our economic activities. In the case of establishing a limited liability company, institute or private foundation, the minimum share capital is 30,000 Swiss francs, and in the case of a joint-stock company, it is 50,000 Swiss francs. The corporate tax for businesses is 12.5 percent, but at least 1,200 Swiss francs (in the absence of taxable income).
Monaco
Monaco’s attractiveness is obviously due to the lack of personal income tax and the low corporate tax. However, the fact that the country is on the OECD blacklist is a contraindication for company formation. Corporate tax can jump to 33.3% if more than a quarter of the income comes from foreign trade. A permit is required to establish a business in the small, closed country.
Cyprus
Cyprus can now be classified as “only” a low-tax country rather than a tax haven. Its 12.5% corporate tax rate is not the most favorable, and companies also have to pay an annual fee of EUR 350 to the state treasury. Its attractiveness may be due to the fact that there is no minimum share capital requirement for establishing a company and the identity of the beneficial owner is not disclosed.
Gibraltar
Gibraltar can also boast of “offshore” services dating back decades. The attractiveness of companies in the economic operation of the country is the absence of general sales tax or the tax exemption of assets originating from abroad.
The minimum capital required to establish a company is £100, typically £2,000. Legal entities can be established with one member, as a sole proprietorship, and the members of the company can be legal or natural persons – of course, domestic or foreign residents. The company must be managed by at least one appointed director.
Malta
The legal forms of company in Malta are the limited liability company, the public limited company and the trading company. There is no minimum share capital requirement for the establishment of a legal entity; a company is usually established with an amount of €1,500; one fifth of this is paid by the founder upon establishment. The 5% tax burden continues to make Malta a very attractive destination for business operators. This effectively applies to a corporate tax rate of 35%, but as a result of the Maltese rebate system, this effectively applies at a rate of five percent.