Countries that have a low taxation system applicable to corporate structures can provide a set of benefits to foreign investors and the opportunity of expanding a business at a rapid pace. Paying less taxes means that the company has the opportunity of investing its savings in other business opportunities.
It is necessary to know that in a recent study – Paying Taxes 2018, carried out by the World Bank, it was revealed that the average level of corporate taxation stands at a rate of 40.5% of a company’s income (measured at a global level).
It is understandable why investors from various jurisdictions search for markets with a low taxation system and in Europe, businessmen can benefit from reduced corporate taxes in countries such as Bulgaria (where the personal and the corporate income tax are imposed at a rate of 10%) or Ireland (which has one of the lowest corporate taxes, of only 12.5%).
For the current year, the real gross domestic product growth for Ireland is estimated at 4.1%, as presented by the International Monetary Fund (IMF); the country is also the home of large international corporations, drawn here by the friendly tax system.
Regarding the corporate tax, investors can find numerous business prospects in one of the most developed economies at a global level – Singapore, which imposes a corporate tax of 17%. According to a presentation made by the Organization for Economic Cooperation and Development (OECD) for 2018, businesses based in Singapore are imposed with the following tax structure: taxes on income and profits, social security contributions, taxes on goods and services and other types of taxes.
The Advantages Offered By Arabic Countries
The Arabic jurisdictions can also be on the top priority list of those searching to open a company in a country with a low tax system; such countries are known for their numerous tax exemptions on companies or reduced rates compared to the European economies. For example, in Bahrain, there is no corporate tax.
However, businessmen can also opt to register a business in one of the top global offshore jurisdictions. The advantages of starting a business in one of these countries are multiple, from a reduced duration of the company’s registration process to a wide range of tax exemptions once the company becomes operational.
Tax Exemptions In Offshore Jurisdictions
One of the most attractive jurisdictions for starting a business is the Cayman Islands, a country that does not apply a set of taxes. Companies incorporated in Cayman Islands are not required to pay taxes such as: the corporate tax, the withholding tax on dividends, interests or royalties, the capital duty tax, the payroll tax or the real estate tax.
Investors can also benefit from the possibility of registering an offshore business in the Cayman Islands, under the Cayman Islands exempted company structure. The purpose of the company is to carry operations outside the country where it was set up and from a tax point of view, this type of company does not impose any taxes on the company, nor on its founder.
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