Starting a business abroad offers numerous tax advantages and challenges. Below, we present the characteristics and regulations of each country that can help you make the best decision when considering Starting a business abroad.
Liechtenstein
Liechtenstein is one of the most popular destinations for businesses involved in international trade. In the country, you can choose from various corporate forms, such as the public limited company (AG), the limited liability company (GmbH), as well as the institute or private foundation. The key legal requirements are as follows:
– For establishing an LLC or private foundation, the minimum share capital is 30,000 Swiss francs.
– For establishing a public limited company, the minimum share capital is 50,000 Swiss francs.
– The corporate tax rate is 12.5%, but at least 1,200 Swiss francs must be paid even if there is no taxable income. Therefore, starting a business in Liechtenstein is advantageous if you want to conduct international trade.
Monaco
Monaco is attractive due to the absence of personal income tax and its low corporate tax rate. However, it should be noted that Monaco is on the OECD’s black list. The corporate tax rate can rise to 33.3% if more than a quarter of the revenue comes from foreign trade activities. A permit is required to establish residence in the small country, and businesses may face higher corporate tax rates if a significant portion of their revenue comes from abroad.
Cyprus
Cyprus is now more commonly classified as a country with favorable taxation rather than a tax haven. The corporate tax rate is 12.5%, which is not the most favorable, but companies also have to pay an annual fee of 350 EUR to the state budget. An advantage of Cyprus is that there is no minimum share capital requirement for starting a business, and the identities of the actual owners do not need to be disclosed, which makes starting a business relatively simple.
Gibraltar
Gibraltar remains a popular destination for international businesses. The country offers attractive economic opportunities, such as the absence of value-added tax (VAT) and the tax exemption on foreign-held assets. The minimum capital for starting a company is only 100 GBP, although companies are typically established with 2,000 GBP. A company can be founded with just one member, and the member can be either a legal or a natural person, whether domestic or foreign resident. The company must be managed by at least one appointed director, which simplifies the process of starting a business in Gibraltar.
Malta
Malta remains an attractive destination for business actors due to the effective tax rate of 5%. The corporate forms in Malta include the limited liability company (LLC), the public limited company (PLC), and the trading company. There is no minimum share capital requirement for setting up a company, and typically businesses are founded with a capital of 1,500 EUR, with one-fifth paid at the time of establishment. The country’s appeal lies in its tax refund system, which reduces the effective corporate tax rate from 35% to just 5%.
Dr. Katona Géza, LL.M. ügyvéd (Rechtsanwalt / attorney at law)
___________________________________
Katona és Társai Ügyvédi Társulás
(Katona & Partner Rechtsanwaltssozietät / Attorneys’ Association)
H-106 Budapest, Tündérfürt utca 4.
Tel.: +36 1 225 25 30
Mobil: + 36 70 344 0388
Fax: +36 1 700 27 57