UAE

RAK | Ras Al Khaimah

International Company (Company limited by shares)

A RAK IC is the most popular offshore company in UAE.

Previously, there were two offshore registrars available in Ras al Khaimah, RAKFTZ and RAKIA, which offered two different offshore structures, RAK IBC, and RAK Offshore. In 2016 the two registrars were merged into RAKICC (Ras al Khaimah International Corporate Center).

No Tax

Dubai (Jebel Ali)

Special Status Non-Resident Company (Company limited by shares)

JAFZ Special Status Non-Resident Companies are offshore companies incorporated in the Jebel Ali Free Zone (Dubai).

JAFZA Non-resident companies are entitled to do business internationally and may not carry out trade or business within the UAE, or any free zone.

This includes rent offices or facilities within the territory. But they may exceptionally acquire real estate in UAE in designated areas and in government-approved development projects.

JAFZA Non-resident companies are also allowed to have relationships with residents providing certain professional services such as legal or consulting, and they have access to the banking system and can open corporate bank accounts in UAE.

Abu Dhabi Global Market

Private company limited by shares

The Abu Dhabi Global Market Free Zone (ADGM) is a no-tax international financial services center located in Al Maryah Island in the heart of the UAE’s capital city, Abu Dhabi. The Free Zone is administered and governed by three independent authorities: the Registration Authority, the Financial Services Regulatory Authority (FSRA) and the ADGM Courts.

Companies incorporated in the ADGM enjoy a full corporate tax exemption until 2063, no foreign ownership restrictions, no limits on repatriation of profits, no withholding taxes, and access to a wide range of tax treaties.

ADGM companies can conduct business and trade within the Free Zones and internationally, but cannot do business with UAE residents out of Free Zone areas, without a UAE resident agent.

ADGM company regulations are based on the UK Companies Act of 2006. The ADGM has an English speaking common law environment and has its own courts and dispute resolution bodies. The Shariah Law does not apply within the free zone.

No Tax | Banking | Residency | Visa

Tech Start Ups | Regulated Crypto Business | Venture Capital | Holding Company | Tax Treaties | Investment Fund | Reputation

Antigua and Barbuda

International Business Corporation (Company limited by shares)

Antigua and Barbuda offers the traditional services of an Offshore Financial Center, including the formation of Antigua offshore companies, bank accounts and the provision of financial services.

Corporations incorporated under the International Business Company Act may be incorporated by either residents or non-residents and may invest in, trade with or provide services to persons within Antigua and Barbuda provided that they apply for a certificate and registration to do so. IBCs are currently taxed at a 25% corporate income tax rate.

There are no exchange controls on the monetary transactions of Antigua International Business Corporations and funds can be freely moved on and off the island.

As a former British colony, Antigua’s legal system embodies the principle of English statutory and common law.

Antigua and Barbuda implemented the OECD’s Automatic Exchange of Information for tax purposes (AEoI) and is conducting exchanges of information through Common Reporting Standard (CRS).

Gaming

Wealth management | Estate Succession Planning | Asset Protection | Spendthrift Protection

Anquila

International Business Company (Company limited by shares) | Limited Liability Company

Anguilla is an offshore incorporation center and tax neutral jurisdiction that enjoys high reputation and stability as a British Overseas Territory.

As other British Overseas Territories, Anguilla has well-regulated corporate and financial services industry. However, unlike other offshore centers, Anguilla has avoided excessive attention by international regulatory agencies.

In addition, Anguilla has an online computerized registration system which enables a quick and efficient incorporation process.

Anguilla does not levy direct taxes, there are no income, capital gains, estate, profit taxation either on resident/non-resident individuals or juristic entities.

LLCs have membership interest rather than shareholder stock, having both the advantages of a partnership and the advantages of a corporation, being a more flexible structure than the latter.

An LLC requires minimal corporate formation requirements and a fast registration procedure. There may be incorporated as a single-member LLCs, and there are no company structure requirements for its management, nor are there provisions for company meetings, directors, secretary, or capital. Its operating agreement may be arranged by its members according to their needs.

Members pay personal income taxes in their country of residence on LLC profits proportionally to their share of participation in the LLC company, whether distributed or not.

It is important to note that certain countries do not recognize the pass-through status of an LLC, if the LLC is deemed to be tax resident in one of such countries, it may be subject to corporate income tax.

LLC’s tax transparency allows residents of certain jurisdiction to not be penalized under controlled foreign company rules.

Anguilla LLCs do not face any reporting requirements. Startup costs and ongoing government fees are relatively low.

LLCs conducting the following activities are required to have certain physical presence requirements and conduct the core income-generating activities within Anguilla:

Banking, Insurance, Fund Management, Financing and Leasing, Distribution and Service Center (purchasing goods from or providing services to affiliates), Shipping, Intellectual Property, Headquarters, and Holdings.

Companies required to meet the economic substance test will need to be controlled and managed from Anguilla and have adequate premises, amount of expenditures and number of employees in Antigua, according to its business activity and size. Companies deemed to be conducting a high-risk intellectual property business will be subject to enhanced substance requirements.

High-risk IP businesses are those that have acquired the IP from an affiliate and are licensing the IP to an affiliate or generating income derived from the IP in consequence of business performed by an affiliate company. For its part, holdings will be subject to a reduced economic substance test.

Companies subjected to have economic substance will be required to file an annual return reporting certain information for the regulator to assess if it has met the prescribed requirements. An Anguilla company will be exempted from economic substance if it proves its tax residency and substance in another jurisdiction.

An Anguilla LLC is perfect for protecting assets like properties, cash, securities, bonds or other investments.

Anguilla does not levy direct taxes, there are no income, capital gains, estate, profit taxation either on resident/non-resident individuals or juristic entities.

Anguilla International Business Companies (IBC) limited by shares are restricted to do business with residents and are conceived to do business internationally.

They can be incorporated with a single shareholder and director, who may be from any nationality, may be the same person and who may be a corporation or a natural person.

Unlike other jurisdictions, an Anguilla IBC does not have to face mandatory audits, and corporate compliance is low.

Requirements for an IBC are minimal. No minimum paid-up capital required and appointment of secretary is optional. It can be administered from Anguilla or from any part of the world, and its books and records may be kept outside the country.

However, IBCs conducting the following activities are required to have certain physical presence requirements and conduct their core income-generating activities within Anguilla:

Anguilla IBCs do not face any reporting requirements. Startup costs and ongoing government fees are relatively low.

In addition, Anguilla has an online computerized registration system which enables a quick and efficient incorporation process.

No Tax

Australia

Proprietary Company

Legal Basis – Common law

Legal framework – Corporations Act 2001

Company form – Proprietary Company (Pty. Ltd.)

Liability – The liability of the shareholders is limited to the unpaid amount of their shareholdings.

Share Capital – There are no minimum share capital requirements.

Shareholders – A Pty Ltd may be incorporated by one or more shareholders up to 50, who can be resident or non-resident, natural or juristic persons. However, certain acquisitions of shares by non-Australian persons may require Foreign Investment Review Board approval.

Details of the shareholders are available publicly.

Directors – There must be at least 1 director, and at least 1 director must ordinarily reside in Australia. Directors must be individuals. Details of the directors are available publicly.

Secretary – Appointing a secretary is not required. However, if the company appoints a secretary, one secretary must be an Australian resident.

Registered Address – A company must have a registered office in Australia.

General Meeting – Proprietary companies are not required to hold an annual general meeting but certain actions may require a written resolution.

Electronic Signature – Permitted.

Re-domiciliation – Inward/outward re-domiciliation is generally not allowed.

Compliance – Companies must annually file a company income tax return Australian Tax Office.

A proprietary company that is owned by a foreign corporation must submit annual financial reports to the Australian Securities and Investments Commission (ASIC) if:

The consolidated revenue for the financial year of the company and any entities it controls is AUD 25 million or more.

The value of the consolidated gross assets at the end of the financial year of the company and any entities it controls is AUD 12.5 million or more.

The company and any entities it controls have 50 or more employees at the end of the financial year.

Merchant Accounts | Venture Capital | E-commerce | Reputation

Barbados

Limited Company

Barbados has been a popular jurisdiction for incorporating international businesses – especially for Canadians which enjoyed certain benefits under DTAs. However, the jurisdiction has also gone through several legislative amendments to avoid being classified as having a ‘harmful preferential tax regime’ by the OECD / EU.

Under these amendments, the International Business Companies (IBC) Act has been abolished, and the Societies with Restricted Liabilities Act has removed preferences to International Societies with Restricted Liability (ISRL).

IBCs and ISRLs licensed after October 17, 2017, have been converted to regular Barbados companies and societies, and are subject to local corporate taxation. Those incorporated and licensed before October 17, 2017, will be grandfathered until June 30, 2021 – at that point, they will need to be converted to regular Barbados companies.

Note that Barbados companies earning 100% of their income in foreign currency would be able to apply for a Foreign Currency Permit under the Foreign Currency Permits Act, 2018, to avoid capital controls under the Exchange Controls Act.

The Income Tax Act has been also amended. Since January 1, 2019, all Barbados entities, except those that are grandfathered are taxed on a sliding scale from 5.50% (for taxable income below BBD 1 million) to 1% (for taxable income over BBD 30 million). Previously, IBCs and ISRLs were subject to tax on a sliding scale between 2.5% and 0.25% and local companies were subject to tax at a 25% rate.

The insurance sector legislation has suffered notable changes as well. The Exempt Insurance Act has been repealed and the Insurance Act has removed provisions for Qualified Insurance Companies. Now, all companies providing insurance services will fall under the same legislation – which will provide three classes of licenses:

Class 1 for insurance companies insuring related party risks – which are taxed at 0% on taxable income
Class 2 for insurance companies insuring third parties risks – which are taxed at 2% on taxable income.
Class 3 for brokers and managers – which are taxed at 2% on taxable income.

The International Financial Services Act has been also repealed and all financial institutions, whether dealing with local or foreign currency, will be regulated under the Financial Institutions Act. There are now four classes of licenses:

Class 1 for local commercial banks.
Class 2 for trust companies, finance companies, merchant banks and money transfer services.
Class 3 for financial holding companies.
Class 4 for foreign currency earnings banks, which will be granted an exemption from capital controls.

The International Trust Act has been replaced by the Trust (Miscellaneous Provisions) Act, removing restrictions for residents to take part. The Shipping Act has also been amended to remove ring-fencing elements. The Foundation Act is currently undergoing through several amendments as well.

Like other jurisdictions, Barbados has implemented economic substance requirements via the Business Companies (Economic Substance) Act, 2018. Companies conducting relevant activities such as financial services, insurance, fund management, headquarters, shipping, intellectual property holdings and equity holding companies, among others – will need to meet economic substance test requirements such as conducting its core-income generating activities within Barbados, having its control and management from Barbados, and having an adequate number of employees, expenditure and assets in Barbados according to their business activities.

Barbados Companies are vehicles often used for the business of making, processing, preparing or packaging within Barbados any product that is exclusively for export, broker, agent, dealer, seller, buyer or factor within Barbados of goods existing outside Barbados or of goods to be trans-shipped through or from Barbados, providing services which are to Barbados non-residents.

Barbados has implemented the OECD’s Automatic Exchange of Information for tax purposes (AEoI) and is undertaking exchanges of information through Common Reporting Standard (CRS).

All in all, Barbados Companies are powerful tools for international trading and commerce, manufacturing operations and for investments in foreign subsidiaries.

Low Tax | International Trading | Tax Treaties | Holding Company

Bermuda

Exempted company (Company limited by shares)

Bermuda is a British Overseas territory and an international financial and banking hub that does not apply taxes on profits, income or dividends, capital gains nor personal income. Non-resident investors may buy or sell shares and units of investment funds without being subject to taxation.

Exempted companies are exempt from the ownership restrictions that apply to local companies.

Furthermore, a Bermuda exempted company is not subject to exchange control restrictions or stamp duty on instruments executed by or on its behalf.

Bermuda’s exempted companies require a local resident acting as director or secretary or representative and its incorporation and maintenance costs are higher than other offshore jurisdictions.

The Bermuda Government passed legislation related to Economic Substance – the Economic Substance Act 2018 and the Economic Substance Regulations 2018 – in order to avoid being blacklisted by the EU.

Exempted and local companies, permit companies, exempted and local LLCs and partnerships that carry out ‘relevant activities’ as defined by the Economic Substance Act, 2018, will be required to meet certain substance tests – such as control and management from within Bermuda, adequate physical presence, employees and operating expenditures, among others.

Relevant business activities include banking, insurance, fund management, finance and leasing, headquarters, intellectual property, distribution and service centers, and holding companies. High-risk IP businesses will be subject to enhanced substance tests, whereas pure equity holdings will be subject to minimum substance requirements.

Companies conducting relevant activities will need to file an Annual Economic Substance Declaration. Existing companies will have until June 30, 2019, to meet substance requirements, whereas newly incorporated entities in 2019 will be required to comply with substance legislation immediately.

Companies that are not compliant with substance requirements may face civil penalties up to BMD 250,000. Making false economic substance declarations may carry out penalties up to BMD10,000 or imprisonment for two years, or both.

Bermudian companies that do not carry out relevant activities are not required to meet economic substance requirements.

Bermuda is in the OECD’s white list as it has implemented strong AML/CFT regulations and has committed to undertake OECD’s automatic exchange of information (AEoI) through Common Reporting Standard (CRS).

Many Fortune 500 companies have set up a Bermuda exempted company for purposes such as holding company, holding assets, trading, manufacturing, inter-group financing, shipping, aircraft leasing and holding of intellectual property rights, among others.

No Tax | Insurance | Investment Fund | Regulated Crypto Business | International Trading | Finalcial Services Company

Bahamas

International Business Company (Company limited by shares)

The Bahamas is one of the industry veterans when it comes to offshore financial services. Since the 30s and 40s, the jurisdiction has been attracting foreign wealth due to its absence of taxation and its confidentiality policies. Although it lost popularity after its independence from Great Britain back in 1973, in favor of Cayman, BVI or Bermuda, it is still one of the go-to jurisdictions in terms of offshore corporate, trust and banking services.

Last December 2018, the Bahamas implemented several legislative changes to comply with requirements set by the EU and the OECD, by enacting the Removal of Preferential Exemptions Act; Commercial Entities (Substance Requirements) Act; the Register of Beneficial Ownership Act; and the Multinational Entities Financial Reporting Act

The Removal of Preferential Exemptions Act abolishes ring-fencing features provided by the International Business Companies Act; the Exempted Limited Partnership Act; the Investment Condominium Act, 2014; and the Executive Entities Act, 2011 – which provided companies incorporated by non-residents to enjoy certain exemptions if they were operated completely outside of the Bahamas.

Because the Bahamas doesn’t levy corporate taxes the main impact for IBCs or Limited Partnerships doing business outside of the Bahamas is that now they will be required to obtain a business license and pay a certain annual fee, as well as stamp duty on certain instruments. Limited duration companies under the International Business Act have been abolished.

Companies incorporated on or before December 31, 2018, are grandfathered for three years, until December 31, 2021.

Furthermore, international banking, insurance, and securities/capital markets sectors will be able to offer services to residents in the Bahamas and in local currency once certain regulatory approvals are in place. On the other hand, local commercial banks will be able to provide services to international clients.

With regard to the Commercial Entities (Substance Requirements) Act – financial and insurance services companies, shipping businesses, IP businesses, headquarters businesses, holdings and companies providing services to or trading with affiliates are required to meet economic substance requirements.

The Register of Beneficial Ownership Act establishes obligations for registered agents to identify and verify identities of beneficial owners of companies incorporated in the Bahamas and maintain databases to hold such beneficial ownership. Information maintained in databases must remain confidential and only accessible by a ‘designated person’ and the registered agent to whom the database belongs to.

The Multinational Entities Financial Reporting Act, 2018, subjects Bahamas companies that are an ultimate parent entity (UPE) of a multinational entities group (MNE) to file a yearly country-by-country report (CbCR).

MNEs are groups that have two or more entities incorporated in different jurisdictions and that have a consolidated group revenue of over USD 850 mil.

A CbCR is an annual return that includes the key elements of the financial statements of a given multinational group by jurisdictions. It provides information to tax authorities about revenue, tax paid and accrued, employment, capital, retained earnings, tangible assets, and business activities, among others.

Bahamian International Business Companies are commonly used as holding companies, to hold bank accounts, financial and commercial titles, international trading, own movable and immovable properties, asset protection and estate and inheritance security, among others.

No Tax | Investment Fund | Holding Company | Financial Services Company

Belize

International Business Company (Company limited by shares) | Limited Liability Company

Belize is a Central American country known for its English-speaking ability, and robust offshore environment.

In December 2018, the National Assembly of Belize passed the International Business Companies (Amendment) Act, 2018, the Income and Business Tax (Amendment) Act, 2018, and the Stamp Duties (Amendment) Act, 2018 to address the considered ‘harmful tax regimes’ identified by the FHTP.

IBCs can now be incorporated by both residents and non-residents, can do business locally and with residents, own land in Belize and hold shares in Belize domestic companies. Under the Income and Business Tax (Amendment) Act, 2018, IBCs doing business within Belize are now subject to both Belizean income tax and stamp duty and are required to file an income tax return.

Belize IBCs doing business in Belize will be subject to 1.75% of the chargeable income amounting to a sum greater than BZD 3 million, or 3% of the chargeable income amounting to a sum lesser than BZD 3 million. Taxes will need to be paid in US Dollars. Belize IBCs whose income is derived outside of Belize shall not be liable for payment of income tax in Belize. Capital gains, dividends, and interests received may be exempt from taxation. Payments to non-residents may be exempt from withholding taxes.

To qualify for the IBC regime, certain companies may be subject to physical presence and tax residency status:

the activities of a company must take place in Belize (i.e. company meetings);
all documents must be kept in Belize.
depending on the scope of activity, a company must employ a sufficient number of well-trained and qualified personnel who are physically present in Belize to carry out the company core income-generating activities
the expenditures shall take place in Belize (adequate for the scale of a particular business)
there is a requirement of a rented office in Belize (according to the scale of a particular business).
Conduct their control and management activities from Belize, either directly or through a management agency, including that board meetings are held in Belize and at least two directors are resident in Belize.

Most businesses may fulfill the physical presence requirement via hiring a management agency.

International Financial Services licensed companies and certain other businesses such as companies providing services to or trading goods with affiliates, holding companies and companies deriving income from intellectual property – must be physically present and tax resident in Belize.

Companies that wish to obtain a tax exemption certificate and non-resident status may need to prove economic substance and tax residency in another jurisdiction.

Note that companies physically present in Belize may be subject to capital controls under the Exchange Control Regulations Act.

IBCs will be able to obtain Tax Identification Number (TIN) and may be required to file annual tax returns and financial statements. IBCs with receipts of at least USD 6,000,000 may be required to file audited financial statements.

IBCs registered before October 16, 2017, are allowed to grandfather their existing tax exemption benefits up to June 30, 2021 – at that time they will need to comply with all the above requirements.

For IBCs registered from October 17, 2017, to December 31, 2018, the above requirements are immediately applicable to them. A transition period of 1 year has been granted – whereby IBCs must take the appropriate steps to ensure they are compliant.

The country has implemented the OECD automatic exchange of information (AEoI) and has signed tax information exchange treaties (TIEa) with 18 countries.

Belize is a Central American country known for its English-speaking ability, and robust offshore environment.

The Limited Liability Companies Act was enacted in 2011. LLCs are similar to IBCs except they have membership interest, rather than shareholder stock, having both the advantages of a partnership and the advantages of a corporation, being a more flexible structure than the latter.

An LLC requires minimal corporate formation requirements. They may be incorporated as a single-member LLCs, and there are no company structure requirements for its management, nor are there provisions for company meetings, directors, secretary, or capital. Its operating agreement may be arranged by its members according to their needs.

An LLC is treated as a partnership for tax purposes. Members pay personal income taxes in their country of residence on LLC profits proportionally to their share of participation in the LLC company, whether distributed or not.

LLC’s tax transparency allows residents of certain jurisdiction to not be penalized under controlled foreign company rules.

Belize LLCs do not face any reporting requirements. Setup costs and ongoing government fees are low.

The country has implemented the OECD automatic exchange of information (AEoI) and has signed tax information exchange treaties (TIEa) with 18 countries.

An LLC is suitable for protecting liquid assets like cash, or securities, bonds or other investments.

An LLC with a strong and protective operating agreement is an interesting tool for protecting your higher risk assets and liabilities.

No Tax | Private Trust Company

Switzerland

SARL Société à responsabilité limitée / Società a responsibilità limitata / GMBH Gesellschaft mit beschränkter Haftung (Limited Liability Company) | AG Aktiengesellschaft / SA Société anonyme / Società anonima (Corporation)

Switzerland is an international trade and finance center and one of the freest economies worldwide, with liberal market policies and a low tax regime along with a long tradition of political, economic and financial stability.

Due to its limited area, its lack of natural resources and relatively low population, its economic policy is oriented towards foreign free trade, with low import duties and just a few import quotas, most aimed at the agricultural sector. In addition to having access to a market of 500 million people due to its free trade agreement with the European Union, providing duty-free trade and free movement of capital and labor.

A tier-1 developed infrastructure, an efficient capital market and strong financial system, currency stability, a liberal labor market, an efficient and reliable regulatory environment, a high-skilled and highly productive workforce, have made Switzerland the chosen location for international large firms and SMEs to establish their headquarters in Europe.

Switzerland is an excellent jurisdiction to establish a holding company, ideal for investors who need to manage substantial shares of other entities, especially when they are resident for tax purposes outside the Swiss borders.

Holding structures in Switzerland may be exempt from cantonal and communal taxes and only subject to federal taxes at a low effective rate of 7.85%, provided that they hold long-term equity investments in subsidiaries, are not conducting commercial activities in Switzerland, 2/3 of their assets consists of shareholdings or participations or 2/3 of their income consists of dividends or capital gains.

Their dividends received may qualify for a tax exemption if investment represents over CHF 1,000,000 or parent company holds at least 10% of the total capital of the distributing company. In addition, capital gains may be exempt if are derived from the sale of shares held for over 1 year and represent 10% of the subsidiary’s capital.

In addition, the available deductions on equity may lead to almost no federal taxes on pure holding companies, that fulfill certain requirements.

Switzerland is also an excellent jurisdiction to incorporate for trading companies that only conduct administrative functions in Switzerland and do not carry out commercial activities in the country, as they may qualify for an advantageous tax regime, where only a small portion of foreign-source income (0% to 15%) is taxable and dividends and capital gains may be tax exempt.

Under this regime, only a small portion of foreign-source income (from 0% to 15%) may be taxable and dividends received and capital gains from foreign-sources may be tax-exempt.

Furthermore, holding structures and trading companies doing business outside Switzerland can benefit from the long list of double taxation treaties concluded by the Swiss authorities, which can result in an even lower tax burden.

Switzerland also has one of the lowest value-added tax rates (8%) and companies trading within the country can get corporate effective tax rates as low as 12.5%, in addition to its free zones and several tax incentives, grants and tax rebates at the canton and communal levels for companies engaging in new technologies, research and development and high-value manufacturing.

Switzerland is also one of the largest financial centers worldwide. Swiss banks offer top-notch corporate banking facilities and a broad range of banking services, investment funds, and insurance services, among others. The Swiss Franc is seen as a safe-haven against currency fluctuations and instability.

The downsides of incorporating in Switzerland is that Swiss companies require a resident director, incorporation costs are high, including a minimum paid up capital of CHF 20,000, high government annual fees, increasing labor costs and high compliance requirements.

The country has agreed to implement the OECD automatic exchange of information (AEoI) by 2018.

All in all, Switzerland is an excellent jurisdiction for global parent companies, IP holding, banking, international trading, and European headquarters.

Low Tax | International Trading | High-Skilled Labour | Banking | Venture Capital | Holding Company | Reputation | IP Holding | Financial Services Company | Tech Startups | Regulated Crypto Business | Tax Treaties

Cook Islands

Limited Liability Company

The Cook Islands’ Limited Liability Companies Act was enacted in 2008 to enhance its offshore sector offer. Following the model adopted in several U.S. States, a Cook Islands LLC is a flexible entity that allows to form its structure according to its operating agreement, rather than dictated by rigid legal statutory mandates.

A Cook Islands LLC is a hybrid of both partnership and corporate structures, protecting LLC members from the debts incurred by the entity and separating the rights of its members and that of the LLC.

Besides the aforementioned structural flexibility, Cook Islands LLCs benefits from confidentiality, no reporting requirements, and tax-exemption.

The Cook Islands are an offshore financial destination distinguished for its asset protection laws, ensuring the assets of foreign Cook Island investors.

A creditor cannot issue a charging order or interfere with the operations of an LLC nor seize, liquidate or force the dissolution of the company, any member of a Cook Islands LLC with a charging order can still act and exercise their rights as a member and any order that is a result of judgment in another location outside of the Cook Islands will not be enforced or recognized in the courts of Cook Island.

The country has implemented the OECD automatic exchange of information (AEoI).

All in all, the Cook Islands LLC used in conjunction with a Cook Islands International Trust, may be one of the best asset protection tools available worldwide.

No Tax | Asset Protection

China

Wholly Foreign-Owned Enterprise (WFOE)

Legal Basis – Civil law

Legal framework – Law on Foreign-capital Enterprises of the People’s Republic of China, Law of the People’s Republic of China on Wholly Foreign-Owned Enterprises; Company Law of the People’s Republic of China

Company form – Wholly Foreign Owned Enterprise, Limited Liability Company (Ltd)

Liability – The liability of the shareholders is limited to their unpaid shareholdings.

Capital – The minimum registered capital varies according to the industry and location. Generally, the minimum capital is from RMB 100,000 to 500,000 for consulting, services and technology companies, from RMB 500,000 to RMB 1,000,000 for trading and food & beverage activities and over RMB 1,000,000 for manufacturing companies.

At the time of incorporation, 20% of the capital must be paid up.

Shareholders – A WFOE may be incorporated by one or more shareholders, who can be either a corporation or a natural person and must not be Chinese national. Details of shareholders are available to the public.

Directors – There must be at least 1 director, who must be an individual, resident or non-resident. Director’s details are available to the public. A WFOE is required to appoint at least one Supervisor. The supervisor can be of any nationality and be resident anywhere.

Secretary – Appointing a secretary is not required. However, An WFOE may need to appoint one or two contact persons for purposes of liaison with the finance and tax authorities, who must be individuals residing in China and speaking Chinese.

Registered Address – A company must have a registered office in China, which must be unique (Not used by any other company). Usually, a local physical office lease is required.

General Meeting – Annual general meetings are not required.

Electronic Signature – Permitted.

Re-domiciliation – Inward/outward re-domiciliation is not allowed.

Compliance – Companies must annually file tax returns for corporate income tax with the competent tax authorities. Other taxes such as value-added tax require fillings on a monthly basis.

Companies must also file annual accounts, which must be audited by an independent auditor.

China Market Entry | Manufacturing

Curaçao

Besloten Vennootschap met beperkte aansprakelijkheid (Private company limited)

Legal Basis – Civil law (Dutch)

Legal framework – Book 2 of the Curaçao Civil Code

Company form – Private company limited (Besloten Vennootschap met beperkte aansprakelijkheid, BV)

Liability – The liability of the shareholders for the company is limited to the amount of their shareholdings.

Share Capital – There are no minimum capital requirements, and share capital may be denominated in one currency, or in various currencies. Shares must be in registered form, and may be with or without par value, with full or limited voting rights or be nonvoting, and may have full, limited or no right to profits.

Shareholders – A Curaçao company may be formed by one or more shareholders, who can be resident or non-resident, natural persons or corporate bodies. Details of the shareholders are not disclosed in a public registry.

Directors – A Curaçao company may have 1 or more directors, who can be corporate bodies or individuals. However, a company should have at least one local managing director or a local representative to obtain a business license or a tax-exempt status. Details of the directors are publicly available.

Secretary – Curaçao companies may appoint a secretary but is not mandatory.

Registered Address – A company must have a registered office in Curaçao.

General Meeting – In general, a general shareholders’ meeting of a B.V. must be held at least once every calendar year, within 8 months of the end of the financial year and must be held on Curaçao.

Electronic Signature – Permitted.

Re-domiciliation – Inward/outward re-domiciliation is not allowed.

Compliance – Curaçao companies must file annual financial statements and an annual report annually.

Only large companies are required to have their accounts audited. However, a Tax-exempt BV must have its accounts verified and approved by an independent expert (Registered accountant, accounting consultant or a certified public accountant).

All Curaçao companies are required to file an annual tax return.

Territorial Tax | Gaming | Holding Company

Cyprus

Private company limited by shares

Cyprus has one of the lowest corporate tax rates across the European Union (12.5%). Due to its favorable tax regime, Cyprus is the gateway to the European common market chosen by many non-EU companies and a portal for investment from the West into Russia, Middle-east, Asia and South America. It is also a shipping hub, the Cypriot-registered vessel fleet is the fourth largest in the world.

In addition, dividends received by Cyprus companies are exempt from all taxes, with the exception of foreign-source dividends that are deductible for tax purposes for the paying company, being an interesting option for holding companies. Cyprus companies are also commonly used for international trading and for the provision of investment business services.

Low Tax | International Trading | EU Market Entry | Holding Company | Ecommerce | IP Holding | Financial Services Company | Tax Treaties | Merchant Accounts

Germany

Gesellschaft mit beschränkter Haftung, GmbH (Private company with limited liability)

Legal Basis – Civil law

Legal framework – Companies with Limited Liability Act, Commercial Code

Company form – Private company with limited liability (Gesellschaft mit beschränkter Haftung, GmbH)

Liability – The liability of the shareholders is limited to the unpaid amount of their shareholdings.

Share Capital – The minimum share capital of a German GmbH is EUR 25,000. At least EUR 12,500 must be deposited when registering the company.

Shareholders – A GmbH may be incorporated by one or more shareholders, who can be resident or non-resident, natural or juristic persons. Details of the shareholders are available to the public.

Directors – There must be at least 1 director, who must be an individual, resident or non-resident, and can be the shareholder. Details of the directors are available publicly.

Secretary – Appointing a secretary is not required.

Registered Address – A company must have a registered office in Germany.

General Meeting – A GmbH is required to hold an annual general general meeting, which can be in Germany or elsewhere.

Electronic Signature – Permitted.

Re-domiciliation – Inward/outward re-domiciliation is generally not allowed.

Compliance – Companies must annually file tax returns for corporate income, trade and value added tax with the competent tax authorities.

Companies must also file annual accounts with the German Federal Gazette (Bundesanzeiger). File financial statements audited are mandatory for large and medium-sized GmbHs.

Tech Startups | Merchant Accounts | High-Skilled Labour | Banking | Venture Capital | EU Market Entry | Reputation | Ecommerce | Residency/Visa | Tax Treaties

Dominica

International Business Company (Company limited by shares)

Legal Basis – Common law

Legal framework – International Business Companies Act 1996

Company form – International Business Company (Company limited by shares)

Liability – The liability of a shareholder to the company is limited to any amount unpaid on a share held by the shareholder.

Business restrictions – An International Business company incorporated in Dominica shall not trade within Dominica, own properties in Dominica, nor undertake any activity which may suggest an association with the banking and insurance industries, unless the appropriate license is granted.

Licensing is required for conducting certain activities such as online casino and other online gaming, ship management and other maritime operations, owning and lease of yacht and vessels

Share capital – Share capital can be nominated in any recognizable currency, in any amount (not less than US$ 100). There are no paid-up requirements. Bearer shares are available. Shares may be issued with or without par value. Bearer shares are permitted, although they must be kept in safe custody at the company’s registered office.

Shareholders – The company may be formed by 1 or more shareholders, who can be either individuals or corporations and may be non-resident. Details of the shareholders are not publicly disclosed.

Directors – At least one director is required, who may be a natural or a legal person, and can be non-resident. Details of the directors are not disclosed on a public file.

Secretary – The appointment of secretary is optional, and may be a natural person or legal person, and non-resident.

Registered Address – IBCs must maintain a registered office in Dominica and must appoint a Dominican resident as the registered agent.

General Meeting – Annual general meetings are not mandatory and can be held anywhere. Meetings can be held by telephone or other electronic means; alternatively, directors, as well as shareholders, may vote by proxy.

Electronic Signature – Permitted.

Re-domiciliation – A foreign entity can continue as Dominica IBC, and vice versa.

Compliance –A company is required to keep accounting records, which can be kept both in Dominica and in any other country of the world, and can be managed by electronic files or programs.

Companies incorporated in 2019 may be required to file accounts, tax and annual return with the authorities.

Estonia

Osaühing OÜ (Private Limited Company)

Estonia is, perhaps, the most technologically advanced country in the world when it comes to government. During the last years the legislative body, voting, education, justice, healthcare, banking, taxes, and policing areas have been digitized in a single platform under the E-Estonia Project.

In addition, Estonia is the first country in the world to introduce the E-Residency concept, which is a transnational digital identity card for non-Estonian citizens issued and backed by the Estonian Government.

Estonia has become a technology hub during the last decade where dozens of successful startups have taken off.

Tech entrepreneurs are usually attracted by its simple and relatively reasonable tax environment – no tax on retained profits and a 20% tax on distributed profits. Also, its ease of corporate compliance as all mandatory filings can be done electronically via its e-Residency card. This card is a transnational digital identity card for non-Estonian citizens issued and backed by the Estonian Government.

For blockchain companies, Estonia provides the most affordable and easiest licensing process for Cryptocurrency exchanges and Cryptocurrency Wallet Service Providers. At the time of writing, more than 800 ‘crypto’ licenses have been already issued.

Obtaining a ‘crypto’ license costs a few thousand dollars and there are no additional capitalization requirements other than the EUR 2,500 standard incorporation cost for all private limited companies.

Estonian companies may also be considered by certain e-commerce and internet entrepreneurs as it offers a low-cost set up and has access to the broad range of payment processing options in the European Economic Area.

Tech Startups | EU Market Entry | Tax Treaties | Regulated Crypto Business | High-Skilled Labour

Spain

Sociedad Anónima (Corporation)

Legal Basis – Civil law

Legal framework – Commercial Code, the Corporations Law, and the Mercantile Register Regulations

Company form – Corporation (Sociedad Anónima, S.A.)

Liability – The liability of the shareholders is limited to the unpaid amount of their shareholdings.

Share Capital – A S.A. must be established with a minimum share capital of EUR 60,000.

It is required that during the incorporation procedures, the company’s capital to be fully subscribed. Moreover, it must be paid up to at least a quarter from the value established for a share. Contributions can be provided in cash or other assets.

Shareholders – A S.A. may be incorporated by one or more shareholders, who can be resident or non-resident, natural or juristic persons. Details of the shareholders are available publicly.

Directors – The board of directors shall have no less than 3 members. Directors may be individuals or legal entities, resident or non-resident.

Secretary – A S.A. must appoint a secretary, who must be an individual and can be resident or non-resident.

Registered Address – A company must have a registered office in Spain.

General Meeting – Required to hold an annual meeting of shareholders within the first six months of the financial year to vote on certain items, such as approval of the annual accounts and allocation of results/distribution of earnings.

Electronic Signature – Permitted.

Re-domiciliation – Inward/outward re-domiciliation is not allowed.

Compliance – Companies must annually file a company income tax return with Agencia Tributaria. All companies are required to make three interim payments on their corporate tax accounts in April, October, and December.

Other periodic returns such as V.A.T., payroll and withholding tax may be of mandatory filing. Companies with annual revenue higher than EUR 6m must file their VAT returns monthly. All other companies must file quarterly returns

Companies must submit Financial statements and management reports annually, which must be reviewed by an auditor qualified to practice in Spain unless the company may issue an abridged balance sheet. The books do not need to be kept locally.

Companies can be exempt from annual audit if their total assets are less than €2.85m or their annual revenue is less than €5.7m; or less than 50 people are employed for two consecutive years.

Investment Fund | Tax Treaties

United Kingdom

Private company limited by shares | Limited Liability Partnership

The UK Private limited company is a well-recognized and reputable business structure incorporated in one of the major international financial and trade centers worldwide with a long proven track record of fiscal and legislative stability.

Corporate taxes in the UK are considerably reasonable (19%) compared with other European jurisdictions.

UK Limited companies are an excellent vehicle as holding companies, taking advantage of the over 100 tax treaties that the UK has concluded, tax-exemption on capital gains on the sale of shares that fulfills certain conditions, tax exemption on dividends received from both local and foreign sources and no withholding tax on dividends paid to non-residents.

Furthermore, a company may elect to be exempted on non-UK profits of a Permanent Establishment in a country where the UK has concluded a tax treaty with.

UK Limited companies also benefit from an ideal environment and a mature finance market for entrepreneurs and startups to seek funding, attract investors, gain access to high-skilled employees and high-quality business services.

Exploitation of IP may benefit from a lower effective tax rate of 10%. Profits may include a significant part of the trading profit from the sales of a product that includes a patent, not just income from patent royalties.

In addition, incorporating in the UK provides a broad range of payment processing services and access to merchant accounts.

Private companies limited by shares in the UK enjoy a fast and cost-effective registration procedure and simple ongoing compliance requirements.

If the Limited company accrues more than GBP 85,000 that is derived from local earnings, then it must register for the UK VAT.

The UK is a common law based legal system which is very scrupulous in respect of private property. An independent judicial system in which the rule of law applies to legal and contractual procedures.

All in all, UK private limited companies enjoy high reputation and are excellent vehicles to conduct international commercial activities, as a holding company, IP business, investment company, access to payment processing services and merchant accounts and for startups seeking financing.

Companies incorporated under the Limited Liability Partnership Act are hybrid entities that provide to its members the flexibility of a partnership arrangement and limit liability to the capital contributed by each member.

An LLP requires minimal corporate formation requirements and a fast registration procedure. There are no company structure requirements for the management of an LLP, nor are there provisions for company meetings, directors, secretary, or capital.

UK LLPs are fiscal transparent entities, all profit received by the LLP is considered to be transferred to its members and taxed at the personal level. Members pay personal income taxes on LLP profits proportionally to their share of participation in the LLP company, whether distributed or not.

This means that an LLP is not seen as a separate entity for taxation purposes, and therefore if its members are non-UK tax residents they will only be required to pay taxes in the UK on income sourced from the UK.

Although, if their country of residence taxes foreign-source income, the members may be subject to pay taxes on all foreign profits in their home country of residence, if it is required by the legislation of that particular country.

If its members are tax residents in a no tax or territorial tax country and no income is sourced from the UK, they may operate with an LLP fully tax-exempt while benefitting from the reputation of a UK incorporated entity.

It is important to note that certain countries do not recognize the pass-through status of an LLP, if the LLP is deemed to be tax resident in one of such countries, it may be subject to corporate income tax.

An LLP must be set up by a minimum of two members, and although they are tax neutral entities, there are certain compliance requirements, including submitting annually financial statements to the UK Companies House and Partnership Tax return to the HMRC (Her Majesty Revenue & Customs).

An LLP operating agreement is not mandatory, but is highly recommended and may be arranged by its members according to their needs.

If the LLP accrues more than GBP 85,000 that is derived from local earnings, then it must register for the UK VAT.

All in all, a UK LLP is a flexible structure that benefits from being incorporated in a reputable jurisdiction and international financial and trade center, while being a potentially tax-free entity. UK LLPs are powerful vehicles commonly used to provide international professional services, conduct international trading, e-commerce, Amazon FBA and as a payment processing subsidiary.

Tech Startups | Merchant Accounts | Holding Company | Banking | Venture Capital | International Trading | Reputation | Ecommerce | Financial Services Company | Tax Treaties | Tax Transparent

Guernsey

Company limited by shares

Guernsey is a highly-reputable jurisdiction with a track record of financial and political stability supported by a robust and mature financial and professional legal and accounting infrastructure.

Companies incorporated in the island benefit from a pragmatic regulation and an attractive tax regime. A 0/10 corporate tax rate, where corporations are subject to income tax at 0%, except businesses conducting financial services regulated by the Guernsey Federal Services Commission, which pay tax at 10%.

Furthermore, there are no taxes on capital gains, inheritance, capital transfer, wealth, value added nor general withholding taxes and exchange controls in Guernsey.

Single-owned companies are available, and ownership can be transferred easily. No authorized capital or capital maintenance requirements, other than a statutory solvency test on dividend distributions. In turn, this means no share premium account requirements and the ability to redeem or repurchase shares out of any capital account.

The incorporation process is a straightforward electronic registration, being possible to do it within 24 hours.

Guernsey companies are easy to manage and it is possible to indefinitely waive annual general meeting and audit requirements.

Its geographical proximity to London and the EU makes it an interesting jurisdiction to establish headquarter of companies doing business in the continent.

There is not a distinction between private and public companies and therefore any company limited by shares may offer their securities to the public.

Furthermore, the Channel Islands Securities Exchange is a recognized exchange for UK tax purposes and is an affiliated member of the International Organization of Securities Commissions and is based in Guernsey.

Guernsey was a pioneer in the establishment of legislation of innovative corporate vehicles as protected cell companies and incorporated cell companies.

Protected cellular companies are entities made up of a core and several ring-fenced protected cells, creating separate portfolios of assets and liabilities which are statutorily segregated.

Although the cells of a protected cell company do not have a separate legal personality, assets and liabilities of each cell must be kept separated and separately identifiable from the assets and liabilities of the protected cell company (core) and of each of the others cell.

Cellular companies have both core capital and cellular capital, which is the capital invested in individual cells.

Creditors of a cell are unable to seek recourse from the assets of any of other cells or of the core. This corporate vehicle provides protection contagion to fund promoters as an umbrella unit trust.

In addition, this corporate structure provides several cost savings such as avoiding to setting up new entities, lower costs on corporate governance, company administration and compliance.

Incorporated cell companies, is similar to a protected cell company, but each cell is a separated legal entity. The rights of the shareholders in the cells of an incorporated cell company are fettered in that the board of each cell is the same as the board of the ICC. Cells cannot act independently of the incorporated cell company that created them but allows each cell to act as independent legal entities with the capacity to contract amongst themselves.

The ICC submits a combined annual validation and only the core company is required to create separate accounts.

Both protected cell companies and incorporated cell companies have become a popular corporate vehicle with the investment fund industry and with the insurance industry, especially captive insurers.

Guernsey has addressed economic substance concerns of the OECD by enacting the Income Tax (Substance Requirements) (Guernsey) (Amendment) Ordinance, 2018 and the Income Tax (Substance Requirements) (Implementation) Regulations, 2018.

Guernsey tax resident entities conducting relevant activities are subject to meet certain economic substance tests such as having an adequate physical presence according to its business activities and size.

A Guernsey company would be treated as a tax resident in Guernsey if it is controlled and managed from Guernsey, or it is incorporated in Guernsey and it does not have a tax-exempt company status.

However, a Guernsey company will cease to be tax resident in Guernsey if it is tax resident in another jurisdiction, it is controlled and managed from another jurisdiction, and either the company is tax-resident in another jurisdiction due to a Guernsey tax treaty or the jurisdiction where the company is controlled and managed from has a corporate tax rate of at least 10%.

Companies carrying out relevant activities will need to fulfill substance requirements. Relevant activities are:

Banking
Insurance
Fund management
Financing and leasing
Headquartering (provision of senior management or provision of management advice)
Shipping Business
Distribution and service center – purchase goods from (to resell) or provide services to non-resident affiliates
Intellectual property business
Pure equity holdings

To meet substance requirements, relevant businesses will need to be controlled and managed from Guernsey, conduct its core income-generating activities within Guernsey, meet the adequacy test: an adequate level of qualified employees, an adequate level of expenditure and adequate physical presence (e.g. offices) according to the relevant activity.

With respect to high-risk intellectual property businesses, like in other jurisdictions, more comprehensive requirements will need to be met.

Companies subject to economic substance requirements will need to provide an annual return to the relevant authorities to assess whether they have met applicable requirements.

Guernsey has started to undertake the first OECD automatic exchange of information (AEoI) through Common Reporting Standard (CRS) in 2017 and has signed over 50 tax information exchange treaties (TIEa) and 11 double taxation agreements (DTA).

All in all, Guernsey is a high-reputable low tax jurisdiction and an option to consider for international transactions, for investment funds, co-investment vehicles, movable and immovable asset holding, and financial services providers.

No Tax | Investment Fund | Holding Company | Wealth Management | Banking

Gibraltar

Private company limited by shares

Legal Basis – Common Law

Legal framework – Companies Act 1930

Company form – Private company limited by shares (Ltd)

Liability – The liability of the shareholders is limited to the amount of their shares.

Share capital –Company equity is divided into shares of a fixed amount. Shares may be allotted at their nominal value or at a premium and may be fully or partly paid. Bearer shares are not allowed.

There is no minimum share capital, but two shares must be issued. Usually, the standard share capital is GBP £2000, which does not need to be paid up.

Shareholders – A Gibraltar company may be incorporated by one or more natural persons or legal entities, residents or non-residents. Details of the shareholders are disclosed publicly.

Directors – A company must have at least one director, who may be a natural or juristic person, resident or non-resident. Details of the directors are disclosed publicly.

Secretary – The company shall appoint a secretary who can be either an individual or a corporate body.

Registered Address – A company must have a registered office in Gibraltar.

General Meeting – In each year, every company shall hold a general meeting as its annual general meeting. AGM can be held anywhere.

Electronic Signature – Permitted.

Re-domiciliation – Inward/outward re-domiciliation is usually allowed in/to a country recognized by Gibraltar for the purposes of re-domiciliation, EEA and countries, which are members of the British Commonwealth as well as from most other finance centers.

Compliance – Every company is required at least once in every calendar year to submit an annual return and accounts. Tax resident companies must submit a tax return annually.

Unless a company meets the conditions of being a small company, the company must appoint an auditor and submit audited accounts.

Territorial Tax | Holding Company | Investment Fund | Banking | Financial Services Company | Regulated Crypto Business

Hong Kong

Private company limited by shares

Hong Kong is a vibrant, densely populated urban center with a skyscraper-studded skyline and is a major regional free trade port and a global financial hub.

This jurisdiction has one of the most liberal, competitive and laissez-faire economies worldwide. Characterized by simple taxation with a competitive level of corporation tax (8.25% / 16.5%), capital gains and dividends free from taxes, no sales tax, and no customs duties.

Although there is no specific legislation for international companies, due to its territorial tax system, a correctly structured and managed company may qualify for a 0% tax for its business carried out outside the jurisdiction.

Supported by a legal system derived from the Common Law, which is very scrupulous in respect of private property, and an independent judicial system in which the rule of law applies to legal and contractual procedures.

A high international reputation and business-friendly jurisdiction, with great facility to establish companies, it can be done in as little as 2 days and remotely, and move capitals from Hong Kong abroad.

Hong Kong is also one of the safest and convenient places to do banking. Being home to some of the most solid banks worldwide, with the highest levels of solvency and liquidity. No exchange controls and availability of multi-currencies accounts, merchant accounts, and payment processing services.

In addition, it is the gateway to one of the largest and fastest-growing markets worldwide, China. The Closer Economic Partnership Arrangement (CEPA) provides to companies incorporated in Hong Kong preferential access for goods and services entering the mainland China market.

Hong Kong participates in the OECD’s Automatic Exchange of Information for tax purposes (AEoI) and is undertaking exchanges of information through Common Reporting Standard (CRS).

All in all, Hong Kong is an excellent jurisdiction to incorporate and its company limited, a powerful vehicle for international trading, start-ups, internet entrepreneurs, investment businesses, IP holdings and as a holding company.

Tech Startups | Merchant Accounts | Holding Company | Banking | Venture Capital | ASEAN Market Entry | Reputation | Ecommerce | China Market Entry | Tax Treaties | Financial Services Company | Territorial Tax | International Trading | Investment Fund

Hungary

Korlátolt Felelősségű Társaság (Limited Liability Company) | Zártkörűen Működő Részvénytársaság (Private company limited by shares)

Hungary is one of the most developed economies in Central Europe. As a member of the European Union, it is a gateway to a market of more than 500 million people – 250 million in a radius of 1,000 km. Its strategic location makes it an investment destination and ideal logistics point, due to its quality infrastructures, industrial and scientific parks.

Furthermore, Hungary stands out for levying the lowest corporate income tax across the EU, a low 9% tax rate.

This is why the foreign direct investment stock in Hungary is one of the highest in the region.

The Hungarian workforce is cost-effective and highly qualified, especially in engineering, medicine, and economics, with a 60% lower cost than the European average.

Another aspect that makes Hungary a very attractive region for investment is its financial stability. Its financial system is one of the most developed in the area. Together with its government legislation, favorable investment policies and tax incentives aimed at improving competitiveness, that we will discuss it later in more detail.

Hungary has several fast-growing sectors such as automotive, services, biological sciences, pharmaceuticals, and medical technology, electronics, information technology, R&D, renewable energy, supply chain management, and distribution logistics sectors.

As weak points, Hungary is heavily dependent on the economic situation of its main European trading partners, due to the importance of its foreign sector, its low level of foreign exchange reserve and the risk of loss of value of its currency.

The Korlátolt Felelősségű Társaság (Limited Liability Company) is the most common company form to incorporate in Hungary.

It may have 1 or more members and the liability of each of them is limited to their capital contribution.

Its members cannot be recruited through public offers and the rights of the partners and ownership is represented by quotas, which may be ordinary (identical rights) or preferential (e.g. preference of dividends or voting rights). A Kft is not allowed issuance of securities in respect of such quotas.

The minimum subscribed capital is HUF 3,000,0000 (≈€10,000), which may be in cash or species. One or more administrators manage the company and a supervisory board is not required if the number of employees is less than 200.

Hungarian companies benefit from the lowest corporate tax burden in the EU. Currently, the corporate income tax rate is 9%, dividends received may be tax-exempt, and there are no withholding taxes on payments to non-resident companies.

In addition, Hungary grants residence permits to Non-EEA nationals intending to reside in the country and work as a self-employed or establish a business. The residence permit has a validity of 3 years, renewable for 3 more years and allows applying for an EU Blue card, which will entitle to move visa-free across the European Union.

Zártkörűen Működő Részvénytársaság (Zrt) is a private company limited by shares, which are not publicly listed and traded.

The minimum share capital is HUF 5,000,0000 (≈€16,000), which may be in cash or in-kind contributions.

The management of the company is carried out by a board of directors of three to eleven members, or in the case that the constitutive document establishes it, the general manager manages the company.

Shareholders representing at least 5% of the voting rights may request a supervisory board, which must have between 3 and 15 members.

Low Tax | Residency / Visa

Ireland

Private company limited

Legal Basis – Common Law

Legal framework – Companies Act 2014

Company form – Private limited company (Ltd)

Liability – The liability of the shareholders is limited to the amount of their shares.

Share capital –Company equity is divided into shares of a fixed amount. There are no minimum capital requirements but it must issue at least one share upon incorporation. This share can have a nominal amount as low as €0.01.

Shareholders – An Irish company may be incorporated by one or more natural persons or legal entities, residents or non-residents. Details of the shareholders are disclosed publicly.

Directors – A company must have at least one director, who must be an individual. At least one of the directors must be Resident within the European Economic Area (EEA) If a company has no EEA-resident director, a EUR 25,000 Bond must be placed with the Company Bureau. Details of the directors are disclosed publicly.

Secretary – Irish companies must appoint a secretary, who can be one of the directors. If the company has only one director, it shall appoint a separate individual as secretary.

Registered Address – A company must have a registered office in Ireland.

General Meeting – In each year, every company shall hold a general meeting as its annual general meeting, or pass a written shareholder resolution in lieu.

Electronic Signature – Permitted.

Re-domiciliation – Inward/outward re-domiciliation is generally allowed.

Compliance – Every company is required at least once in every calendar year to submit an annual return with audited financial statements.

Companies must also submit a tax return due to the 21st day of the 9th month following the end of the accounting period and are also obliged to pay preliminary tax in either one or two installments.

Note that Small sized companies may be exempted from having their annual Financial Statements audited in respect of any financial year if in respect of that year and the financial year immediately preceding that year the company satisfies two of the three following conditions: Balance sheet total not exceeding EUR 6 million; Turnover not exceeding EUR 12 million; Employees not exceeding 50.

Low Tax | EU Market Entry | Investment Fund | Ecommerce | Merchant Accounts  | Tech Startups | Venture Capital | Tax Treaties | Reputation

Isle of Man

Private company limited by shares

The Isle of Man is a high-reputable international finance and international business center due to its political stability, business-friendly policies and an attractive fiscal and regulatory environment.

In 2006, it came into force the Companies Act 2006, which currently co-exist with present and future companies incorporated under the previous Isle of Man Companies Act 1931.

The newest Companies Act presents several advantages over the previous one:

Under the Companies Act 2006, the ultra vires doctrine does not apply. This means that a company has unlimited capacity to carry out any business or transaction if it is in the best interests of the company to do so, notwithstanding any provision to the contrary in a company’s memorandum and articles of association.
Companies incorporated under the Companies Act 2006, may have a single director and may be corporate, instead of the two individual directors required by the Companies Act 1931.
Share capital and class of shares issued provisions are more flexible.
There is not a distinction between private and public companies and therefore shares may be offered to the public.
Directors may authorize distributions by the company to its shareholders at such time and of such amount they deem appropriate if the company if the financial viability of the company is not compromised immediately and the company passes the solvency test.
Accounting requirements are noticeably lower. Companies subject to the Companies Act 2006, are only required to keep accounting records and those may be kept anywhere. Financial statements preparation is not mandatory and private companies are exempt from audit. In the Companies Act 1931 Act, companies are required to file financial statements and audit their accounts if their turnover, balance sheet and the number of employees exceeds a certain threshold.
2006 Act Companies are not required to file with the Registrar details of any change in its directors as they occur, share capital variation or alteration, any allotment of shares or any shareholders’ resolution.

These changes have been aimed at competing with jurisdictions that offer international companies that are easy to manage and with advantageous tax systems such as the British Virgin Islands, Cayman Islands or Bermuda. With the addition that Manx companies are not restricted from carrying out onshore transactions or own assets located on the island.

Companies incorporated in the Isle of Man are subject to corporate income tax at a 0% rate. A 10% tax rate for companies engaged in the financial services business and Isle of Man’s property transactions.

Dividend distributions, royalties, and interests paid to non-Manx residents are subject to withholding tax at the rate of 0%.

In addition, the Isle of Man is part of the customs territory of the EU under Protocol 3. Therefore, Manx incorporated entities benefit from free trade with the EU and EU VAT registration.

However, the recent BREXIT has created uncertainties on the Isle of Man’s future relationship with the EU and companies holding EU assets and trading with the EU.

The Isle of Man is a signatory to the Paris Convention on Patents and Trademarks, making the Isle of Man limited company an interesting vehicle to hold intellectual property.

The Isle of Man has also enacted legislation for businesses dealing with cryptocurrencies. The Designated Business (Registration and Oversight) Act 2015 regulates cryptocurrency businesses, such as exchanges, and requires them to register with the Isle of Man Financial Supervision Commission and comply with Anti-Money Laundering and Countering Terrorist Financing legislation and the Proceeds of Crime Act 2008.

The country has also a strong E-Gaming industry, due to its gaming license simple application process, low betting duties, its extensive cluster of services providers/advisors with experience in the industry and its supportive legislation.

The Isle of Man has started to undertake the first OECD automatic exchange of information (AEoI) through Common Reporting Standard (CRS) in 2017 and has signed over 50 tax information exchange treaties (TIEa) and 11 double taxation agreements (DTA).

Companies conducting relevant activities such as fund management, banking, insurance, finance and leasing, distribution and service center business, headquarters business, intellectual property business, shipping, and holding company business – are required to meet economic substance requirements:

conduct its core income-generating activities in Isle of Man (which are defined in the law).
be directed and managed from within the Isle of Man.
have an adequate amount of operating expenditures incurred in or from within the Isle of Man.
have an adequate physical presence (including maintaining a place of business or plant, property, and equipment) in the Islands.
have an adequate number of full-time employees or other personnel with appropriate qualifications in the Islands.

Holding companies which only hold equity participations in other entities and only earn dividends and capital gains will be subject to a reduced economic substance test – it must have complied with all applicable filing requirements and must have adequate human resources and adequate premises in the Islands for holding and managing equity participations.

With respect to IP holding companies – companies that are exploiting IP rights and:

have not created such IP
have acquired the IP from a company of the same group structure or from a third-party that has conducted research and development out of Isle of Man and licenses the IP to a company(s) of the same group

or does not carry out research and development, branding or distribution as part of its Isle of Man core income generating activities – are considered high-risk intellectual property businesses and may be subject to an enhanced substance requirements test.

All in all, an Isle of Man company is an excellent vehicle for movable and immovable assets holding, investments companies and SPVs, e-gaming and wealth management.

No Tax | Holding Company | Merchant Accounts | Ecommerce | Gaming | Aviation | Regulated Crypto Business

Isle of Man

Private company limited by shares | Limited Liability Company

In 2006, it came into force the Companies Act 2006, which currently co-exist with present and future companies incorporated under the previous Isle of Man Companies Act 1931.

The newest Companies Act presents several advantages over the previous one:

Under the Companies Act 2006, the ultra vires doctrine does not apply. This means that a company has unlimited capacity to carry out any business or transaction if it is in the best interests of the company to do so, notwithstanding any provision to the contrary in a company’s memorandum and articles of association.
Companies incorporated under the Companies Act 2006, may have a single director and may be corporate, instead of the two individual directors required by the Companies Act 1931.
Share capital and class of shares issued provisions are more flexible.
There is not a distinction between private and public companies and therefore shares may be offered to the public.
Directors may authorize distributions by the company to its shareholders at such time and of such amount they deem appropriate if the company if the financial viability of the company is not compromised immediately and the company passes the solvency test.
Accounting requirements are noticeably lower. Companies subject to the Companies Act 2006, are only required to keep accounting records and those may be kept anywhere. Financial statements preparation is not mandatory and private companies are exempt from audit. In the Companies Act 1931 Act, companies are required to file financial statements and audit their accounts if their turnover, balance sheet and the number of employees exceeds a certain threshold.
2006 Act Companies are not required to file with the Registrar details of any change in its directors as they occur, share capital variation or alteration, any allotment of shares or any shareholders’ resolution.

These changes have been aimed at competing with jurisdictions that offer international companies that are easy to

manage and with advantageous tax systems such as the British Virgin Islands, Cayman Islands or Bermuda. With the addition that Manx companies are not restricted from carrying out onshore transactions or own assets located on the island.

Dividend distributions, royalties, and interests paid to non-Manx residents are subject to withholding tax at the rate of 0%.

In addition, the Isle of Man is part of the customs territory of the EU under Protocol 3. Therefore, Manx incorporated entities benefit from free trade with the EU and EU VAT registration.

However, the recent BREXIT has created uncertainties on the Isle of Man’s future relationship with the EU and companies holding EU assets and trading with the EU.

The Isle of Man is a signatory to the Paris Convention on Patents and Trademarks, making the Isle of Man limited company an interesting vehicle to hold intellectual property.

conduct its core income-generating activities in Isle of Man (which are defined in the law).
be directed and managed from within the Isle of Man.
have an adequate amount of operating expenditures incurred in or from within the Isle of Man.
have an adequate physical presence (including maintaining a place of business or plant, property, and equipment) in the Islands.
have an adequate number of full-time employees or other personnel with appropriate qualifications in the Islands.

With respect to IP holding companies – companies that are exploiting IP rights and:

have not created such IP
have acquired the IP from a company of the same group structure or from a third-party that has conducted research and development out of Isle of Man and licenses the IP to a company(s) of the same group

All in all, an Isle of Man company is an excellent vehicle for movable and immovable assets holding, investments companies and SPVs, e-gaming and wealth management.

No Tax | Holding Company | Merchant Accounts | Ecommerce | Gaming | Aviation | Regulated Crypto Business

Jersey

Private company limited by shares

Jersey is a reputable tax-neutral jurisdiction and one of the top financial centers worldwide with a flexible regulatory framework and a long track record of political and economic stability.

Companies incorporated under the Companies (Jersey) Law, 1991 benefit from a fast and simple incorporation process and advantageous tax treatment. Corporate income is subject to a 0% corporate tax rate and there are no taxes on dividends paid and received and capital gains.

Furthermore, there is no stamp duty on the transfer of shares in Jersey companies, and these may be held and traded in an uncertificated form.

Companies engaging financial services are taxed at 10%, although collective investment funds and securitization vehicles can elect to be tax-exempt from income not derived from land or property.

Utility companies and income from real property are subject to a 20% income tax rate.

The Companies (Jersey) Law, 1991 does not require a minimum capital to incorporate a private limited company, this can be in any currency, and shares may be issued with or without par value.

Par value companies can issue shares with a nominal capital (or par) value. It will be maintained a share capital account in respect of the nominal capital and a share premium account in respect of any premium over the nominal capital paid for such shares. Fully paid-up shares may be redeemed from any source if a solvency statement is signed by all directors.

No par value companies issue shares without nominal value. The proceeds from the issue of shares must be credited to a stated capital account, and the number of shares may be unlimited. Distributions may be made from stated capital accounts, adding flexibility to shareholders who wish to recover capital.

Par value companies can freely switch to no par value companies and vice versa.

In Jersey, there are available corporate vehicles as protected cell companies and incorporated cell companies.

Protected cellular companies are entities made up of a core and several ring-fenced protected cells, creating separate portfolios of assets and liabilities which are statutorily segregated.

Cellular companies have both core capital and cellular capital, which is the capital invested in individual cells.

Creditors of a cell are unable to seek recourse from the assets of any of other cells or of the core. This corporate vehicle provides protection contagion to fund promoters as an umbrella unit trust.

In addition, this corporate structure provides several cost savings such as avoiding to setting up new entities, lower costs on corporate governance, company administration and compliance.

The ICC submits a combined annual validation and only the core company is required to create separate accounts.

Both protected cell companies and incorporated cell companies have become a popular corporate vehicle with the investment fund industry and with the insurance industry, especially captive insurers.

Jersey’s special constitutional position has been recognized by the European Union in the protocol No.3 attached to the United Kingdom’s Act of Accession to the EU. It remains to be seen how BREXIT will affect Jersey’s relationship with the European Union.

Jersey was the first jurisdiction to regulate a Bitcoin fund, allowing that traditional investments types such as pensions to be invested in Bitcoin and secured by the same security features in commonly used financial products.

In addition, on September 2016 came into effect the Proceeds of Crime (Miscellaneous Amendments) (Jersey) Regulations 2016 (the Regulations), bringing cryptocurrency exchanges within the ambit of Jersey’s anti-money laundering and terrorist financing regulation.

Cryptocurrency exchanges in Jersey are required to register in and supervised by the Jersey Financial Commission.

Jersey Companies carrying out relevant activities need to fulfill substance requirements. Relevant activities are:

Banking
Insurance
Fund management
Financing and leasing
Headquartering (provision of senior management or provision of management advice)
Shipping Business
Distribution and service center – purchase goods from (to resell) or provide services to non-resident affiliates
Intellectual property business
Pure equity holdings

To meet substance requirements, relevant businesses will need to be controlled and managed from Jersey, conduct its core income-generating activities within Jersey, meet the adequacy test: an adequate level of qualified employees, an adequate level of expenditure and adequate physical presence (e.g. offices) according to the relevant activity.

With respect to high-risk intellectual property businesses, like in other jurisdictions, more comprehensive requirements will need to be met.

Companies subject to economic substance requirements will need to provide an annual return to the relevant authorities to assess whether they have met applicable requirements.

Jersey has started to exchange information for tax purposes through Common Reporting Standard (CRS) in 2017 and currently, Jersey has in force over 40 tax information exchange treaties (TIEa) and 12 double taxation agreements (DTA).

All in all, the tax-neutral environment and pro-business regulation make Jersey companies a suitable vehicle for several business purposes, such as commercial trading, investing in property, securities, and other assets, cryptocurrency businesses or as a group holding company.

No Tax | Holding Company | Investment Fund | Wealth Management | Banking

Japan

Godo Kaisha (Limited Liability Company)

Tax residency – A company that has its main office in Japan is considered a resident for tax purposes

Tax rate – The national corporate tax standard rate is 23.2% for companies with paid-in capital over JPY 100M. Companies with paid-in capital of JPY 100M or less are subject to a 15% tax on the first JPY 8M per annum and 23.2% on the exceeding.

There is a national local corporate tax at a fixed rate of 10.3% of their corporate tax liabilities.

There is also a standard enterprise tax at progressive rates from 3.4% to 6.7% and a local corporate tax at 43.2% of the current enterprise tax, which is imposed on a corporation’s income allocated to each prefecture.

Considering the above, the effective tax rate is about 34.60% for SMEs and 30.62% for large corporations.

Capital gains – Capital gains are treated as ordinary income and subject to corporate taxes.

Dividends – Dividends are treated as ordinary income. However, there are applicable exclusions depending on the ownership percentage.

Dividends from local entities

Dividends received from wholly owned subsidiaries (100%) are excluded. Dividends from affiliate domestic corporations (More than 1/3 ownership) may be also excluded, if less than 1/3 ownership (but more than 5%) a 50% exclusion may apply. For exchange-traded funds and portfolio investments (less than 5%), a 20% exclusion may apply). Other dividends are taxed at standard rates.

Dividends from foreign entities

95% of dividends may be excluded, provided that the parent company holds at least 25% of the outstanding shares for at least 6 months. Percentage of ownership requirement may not be required if the paying company is incorporated in a country in which Japan has concluded a tax treaty.

Interests – Interests received is included in taxable income. If interest is subject to foreign withholding tax, a foreign tax credit may be available.

Royalties – Royalties received is included in taxable income. If royalties are subject to foreign withholding tax, a foreign tax credit may be available.

Withholding Taxes – Dividends paid to non-residents are subject to a 20% withholding tax (15% if paid by a listed company) unless a tax treaty provides a reduced rate. There is a domestic surtax of 2.1%, being the effective withholding tax rate of 20.42%.

Interests paid abroad are subject to a 20% withholding tax (15% on deposit and bonds), unless the rate is reduced under a tax treaty. There is a domestic surtax of 2.1%, being the effective withholding tax rate of 20.42%.

Royalties and technical fees paid to non-residents are also subject to a 20% withholding tax unless reduced due to a tax treaty. There is also domestic surtax of 2.1%, being the effective withholding tax rate of 20.42%.

Foreign-source income – Foreign-source income is generally subject to corporate income tax. Companies are allowed to claim a tax credit against corporate income and inhabitant’s taxes for foreign income taxes paid directly.

Losses – Only 50% of company taxable income may be offset by net operating losses, which may be carried forward 10 years. Losses may be carried back 1 year (Only SMEs)

Inventory – Companies are entitled to record the cost of inventory using actual the individual cost, first in first out (FIFO), weighted average, moving average, most recent retail, selling price reduction, and lower of cost or market.

Anti-avoidance rules – Transfer pricing legislation is applicable to all types of transactions between related persons, which must be conducted at arm’s length according to the OECD’s principles and supported by relevant documentation. If the company fails to demonstrate that the pricing is reasonable, tax authorities may conduct adjustments at their own discretion.

Interest paid on debt to controlling foreign shareholders is disallowed to the extent the average balance of debt on which that interest is paid is more than three times the equity of controlling foreign shareholders.

Japan has Anti-tax haven rules, undistributed profits of a foreign subsidiary to which an applicable tax rate is 30% (in case of a shell company) or 20% are included in the Japanese company taxable income under certain conditions.

All income of a controlled foreign company is taxable to a Japanese shareholder if the main business of the subsidiary is passive and the foreign tax rate is lower than 20%: or, if the CFC fails certain substance tests and the foreign tax rate is lower than 30%; or if the CFC includes certain passive income categories and the foreign tax rate is lower than 20%.

Tax credits and incentives – There are available tax credits for Research & Development initiatives, tax incentives on Internet of Things (IoT) investments, special tax treatments for investments in certain areas, tax incentives for venture capital investments and for the revitalisation of local hubs.

Labor taxes – There are several social security insurance contributions which generally account for a total of 14.921% on employees gross salaries for both the employer and the employee.

Personal income tax – Tax residents are Japanese residents who have a “jusho” (permanent place of abode) or a “kyosho” (temporary place of abode) for at least one year. If an individual has been in Japan 5 years or less, continuously or not, during a 10-year period would not be considered as a tax resident.

Tax residents are subject to taxation on their worldwide income, while non-residents only on their income accrued in Japan.

Tax residents’ personal income is taxed at progressive rates up to 45% on income exceeding JPY 50,000,000. Non-residents are subject to a 20% income tax.

There is also a surtax of 2.1% and municipalities usually levy a local income tax at a 10% tax rate.

Dividends and interests derived from resident entities are taxed separately at a flat rate of 20.315% (including surtax and local income tax). Offshore dividends and interests taxed as ordinary income at progressive income tax rates.

Capital gains are taxed separately at 20.315% (including surtax and local income tax) on the sales of certain securities, 20.315% % on the sale of long-term gains of immovable properties (held more than five years) and 39% on short-term immovable property capital gains.

Other taxes – There is a Consumption tax levied on the sale or import of goods and the provision of services. The current rate is 8%. As of 1 October 2019, the rate will increase to 10%.

A company that uses business premises in excess of 1,000 square metres and/or has more than 100 employees in a designated city is subject to the Business premises tax based on the usage of the business (JPY 600 per square metre) and gross payroll (0.25% of gross payroll).

Municipalities levy real property (1.4% on the assessed value) and transfer of real property taxes (1.5%-4%) and a real estate registration tax (0.4%-2%).

Inheritances and gifts are taxed at progressive rates up to 55%. There are no taxes on net wealth.

Residency / Visa | Reputation | Regulated Crypto Business

Nevis

Business Company (Company limited by shares) | Limited Liability Company

The Nevis jurisdiction is an offshore domicile operated by the small Caribbean island of Nevis within the country of St Kitts and Nevis.

Business Companies incorporated under the Nevis Business Corporation Ordinance Act, are one of the most popular offshore company vehicles.

Nevis BCs benefit from a simple and fast registration procedure and a flexible structure.

They can be incorporated with a single shareholder and director, who may be from any nationality, may be the same person and a corporation or a natural person.

Unlike other jurisdictions, a Nevis BC does not have to face mandatory audits, and corporate compliance is minimal.

Nevis Business Companies benefit from strong asset protection legislation.

To bring an action against a business incorporated in Nevis, the creditor would need to hire a local lawyer licensed in Nevis and post a cash bond with the court, in addition, attorneys in Nevis are not allowed from working on contingency. The creditor must pay for all legal services up front and in full.

Nevis BCs are commonly used for asset protection and confidentiality, estate, and tax planning and international trade.

A member of a Nevis Limited Liability Company (LLC) is limited to the amount of contributed capital they make to capitalize the company and ‘buy’ a membership interest. LLCs’ ownership is divided into membership interests instead of shares.

LLCs are for the most part very flexible. You have the choice of a manager-managed LLC with multiple members or a member-managed LLC with multiple members.

A distinct advantage of a Nevis LLC is the ability to incorporate with a single member. Although Nevis isn’t the only place this is possible, the strong asset protection laws of Nevis are favorable compared to other jurisdictions.

Unlike other jurisdictions, a Nevis LLC does not have to face mandatory audits, and corporate compliance is minimal. There are very few company records to be maintained, such as corporate minutes. Your company meeting can be held anywhere, and an operating agreement can be tailored to your exact specifications.

Nevis LLCs benefit from a strong asset protection legislation.

Nevis offshore statutes for Nevis LLCs are actually derived from jurisdictional law of the state of Wyoming. A single-member LLC in Nevis has charging order protection, and other benefits of a Wyoming LLC, located in a jurisdiction offshore, with Nevis courts, governing. All the benefits of the strongest LLC in the United States located offshore in Nevis.

Nevis has no public registry. Nevis does not have a database of corporate records accessible to the public. Only the government of St Kitts and Nevis, as well as lawyers practicing in Nevis, can access this database.

A Nevis LLC is perfect for someone who:

Is the sole owner of their business and doesn’t want to have another director.
Wants the benefit of strong asset protection.
Want a private and secure registration.
Doesn’t want to pay for nominee directors.
Doesn’t want to face yearly audits.
Desires relatively simple and easy offshore incorporation.

Nevis is one strongest structure from an asset protection standpoint to hold personal assets or run a business that is fraught with liability – it makes sense to go to a place where the claimant has to get a charging order and post a bond in order to bring suit against you.

A Nevis LLC is also an excellent vehicle for joint venture investments.

Furthermore, Nevis has one of the fastest company registration procedures and one of the lowest initial and maintenance costs worldwide.

Asset Protection | Private Trust Company

South Korea

Yuhan Hoesa (Limited Company)

Legal Basis – Civil law

Legal framework – Korean Commercial Code

Company form – Yuhan Hoesa (Limited Company)

Liability – The liability of the member is limited to their capital contributed.

Capital – A Yuhan Hoesa has no minimum capital requirements. However, any foreign member should contribute at least KRW 100 million to the company capital.

Members – A Yuhan Hoesa may be incorporated by one or more members, without limits, who can be resident or non-resident, natural or juristic persons. Details of the members are not available to the public.

Directors – There must be at least 1 director, who may be an individual or corporation, resident or non-resident, and can be a member. If a Yuhan Hoesa has two or more directors, a representative director is required. Details of the directors are available publicly.

Secretary – Appointing a secretary is not required.

Registered Address – A company must have a registered and physical office in South Korea.

General Meeting – A Yuhan Hoesa is required to hold an annual general meeting, however, the physical meeting could be replaced by a members’ resolution by unanimous written consent

Electronic Signature – Permitted.

Re-domiciliation – Inward/outward re-domiciliation is generally not allowed.

Compliance – Companies must annually file tax returns for corporate income tax with the competent tax authorities within three months after the end of each fiscal year

Companies must also file annual accounts but generally, they are not required to have financial statements audited by an independent auditor. However, a Yuhan Hoesa may be subject to a mandatory external audit depending on several factors such as the number of employees and its total assets.

Residency / Visa | Tax Treaties | Reputation

Cayman Islands

Exempted Company (Company limited by shares) | Limited Liability Company

The Cayman Islands has an excellent legal, fiscal, financial and professional environment for the incorporation of international business companies.

The jurisdiction is a world-leading offshore financial services jurisdiction. due to its political and economic stability, and its broad offer of banking, trust, hedge fund formation and investment, structured finance and securitization, captive insurance, and international business services.

The Companies Law 1961 (as amended in 1990, 1995, 2004, 2007 and 2010) is based on English Common law and governs the incorporation of the Exempted Companies, Cayman’s most popular offshore company.

Exempted companies are entitled to do business outside the Cayman Islands and may have restrictions to trade with Cayman residents. However, exempted companies are allowed to conclude contracts in Cayman or exercise any of its powers in Cayman to carry out business outside the Islands, including open and maintain bank accounts and rental or ownership of real estate in the jurisdiction.

Exempted companies are not allowed to make any invitation to the public in Cayman to subscribe its shares or debentures.

In the Cayman Islands, there are no direct taxes. No corporation tax, income tax, capital gains tax, inheritance tax, gift tax, nor wealth tax. Transfer of shares is not subject to stamp duty unless the Exempted company holds property within the islands. Certain documents may also be subject to nominal stamp duty.

There is no exchange control and no restrictions on the movement of funds to or from the Islands.

In addition, exempted companies may request to the government a Certificate of up to 50 years tax exemption against any future Cayman Islands taxation.

Exempted companies are flexible corporate structures, not requiring any resident directors or officers, the register of shareholders and minute books can be held anywhere and annual general meetings of shareholders are not mandatory

and can be held anywhere.

No minimum capital requirements and shares may be with or without par value, issued at a premium over par value, in fractions of a share, preferred, deferred, or other special rights.

Annual reporting filings are minimal, there is no need to file financial statements and audits are not required unless the company is an investment fund regulated by the Cayman Islands Monetary Authority.

Reporting requirements are limited to an annual return stating whether there has been a modification of the Memorandum of Association and confirming that no business has been conducted within the jurisdiction.

Exempted companies also benefit from confidentiality. Details of company members are not required to be filed with the Registrar of Companies and the Confidential Relationships (Preservations) Law 1976 makes it a criminal offense for any person to divulge confidential information to a third party.

Exempted companies are an excellent vehicle for fund and international investment management, as they may be registered as Segregated Portfolio Companies (sometimes referred to as protected cell companies).

This company structure separates the assets and liabilities held in one portfolio from other held in another portfolio and/or from the assets of the company not attributable to any particular portfolio.

Creditors of a “portfolio” are unable to seek recourse from the assets of any of other or from the general assets of the company. This corporate vehicle provides protection contagion to fund promoters as an umbrella unit trust.

In addition, this corporate structure provides several cost savings such as avoiding to setting up new entities, lower costs on corporate governance, company administration and compliance.

Companies incorporated in Cayman also benefit from a wide range offer of financial and professional services. There are about 324 banks and trust companies licensed in Islands, including 47 of the 50 largest banks in the world and high-end professional services, including lawyers, accountants, insurance managers, mutual fund managers, and administrators, among others.

Furthermore, the Cayman Islands has also an internationally renowned ship and aircraft registries.

The Cayman Islands has implemented the OECD’s automatic exchange of information for tax purposes (AEoI).

The Cayman Islands passed the International Tax Co-operation (Economic Substance) Law, 2018 – requiring companies (e.g. Exempted companies, LLCs and LLPs) conducting relevant activities to satisfy substance requirements.

Relevant activities include fund management, banking, insurance, finance and leasing, distribution and service center business, headquarters business, intellectual property business, shipping, and holding company business.

This specifically affects companies carrying out financial, insurance services and investment business; corporate management services to affiliates; operating, renting or chartering ships transporting passengers, goods and mail by sea, or using, maintaining or renting containers; companies trading goods with and/or providing services to affiliated companies; companies deriving income from the exploitation of IP rights; and pure equity holding companies.

Note that investment fund vehicles are explicitly excluded from this legislation.

Companies that carry out relevant activities must satisfy the economic substance test – they must:

conduct its core income-generating activities in Cayman (which are defined in the law).
be directed and managed from within Cayman.
have an adequate amount of operating expenditures incurred in or from within the Islands.
have an adequate physical presence (including maintaining a place of business or plant, property, and equipment) in the Islands.
have an adequate number of full-time employees or other personnel with appropriate qualifications in the Islands.

With respect to IP holding companies – companies that are exploiting IP rights and:

have not created such IP
have acquired the IP from a company of the same group structure or from a third-party that has conducted research and development out of Cayman Islands
and licenses the IP to a company(s) of the same group

or does not carry out research and development, branding or distribution as part of its Cayman Islands core income generating activities – are considered high-risk intellectual property businesses and may be subject to an enhanced substance requirements test.

All Cayman companies are required to notify annually the Authority – stating whether or not they are carrying out relevant activities.

Companies carrying out relevant activities are required to file a basic return related to the amount and type of income with respect to the relevant activity, expenses, assets, management, employees, and physical presence, among other requirements. Existing companies incorporated on or before December 31, 2018 will need to comply with substance requirements by June 30, 2019.

Substance requirements filings will be reviewed by the designated authority to ensure that such entities have adequate economic substance in the Islands. Companies failing the substance test will be given direction on how to meet the test and may face a fine of up to KYD 10,000.

Continued failure to meet the test in the following year may result in higher fines of up to KYD 100,000.

All in all, the Cayman Islands is a sophisticated financial center and its exempted company, a powerful corporate vehicle for international investment, fund and wealth management.

The Limited Liability Companies Law 2016, came into force on July 8^th, 2016, creating a new hybrid entity with separate legal personality and limited liability of its members but with greater structure flexibility than a corporation and taxed as a partnership.

An LLC requires minimal corporate formation requirements and a fast registration procedure. It may be incorporated as a single-member LLC, and there are no company structure requirements for its management, nor are there provisions for company meetings, directors, secretary, or capital. Its operating agreement may be arranged by its members according to their needs.

Members pay personal income taxes in their country of residence on LLC profits proportionally to their share of participation in the LLC company, whether distributed or not.

LLC’s tax transparency allows residents of certain jurisdiction to not be penalized under controlled foreign company rules.

LLCs can conclude contracts in Cayman or exercise any of its powers in Cayman to carry out business outside the Islands, including opening and maintaining bank accounts and rental or ownership of real estate in the jurisdiction.

In the Cayman Islands, there are no direct taxes. No corporation tax, income tax, capital gains tax, inheritance tax, gift tax, nor wealth tax. Certain documents may be subject to nominal stamp duty.

There is no exchange control and no restrictions on the movement of funds to or from the Islands.

Annual reporting filings are minimal, there is no need to file financial statements and audits are not required unless the company is regulated by the Cayman Islands Monetary Authority.

Companies incorporated in Cayman also benefit from a wide range offer of financial and professional services. There are hundreds of banks and trust companies licensed in Islands, including 47 of the 50 largest banks in the world and high-end professional services, including lawyers, accountants, insurance managers, mutual fund managers, and administrators, among others.

The Cayman Islands has implemented the OECD’s automatic exchange of information for tax purposes (AEoI) via common reporting standard (CRS).

The Cayman Islands LLC is an excellent entity for movable and immovable assets holding, asset protection, investment funds, joint venture companies, private equity transactions, securitizations and other corporate transactions and international structures.

A Cayman Islands LLC may be required to obtain a license or to register with the Cayman Islands Monetary Authority to carry out certain activities such as banking business, trust business, company management, insurance business, mutual fund administration, the business of a mutual fund and securities investment business.

On January 1st, 2019, entered into force the International Tax Co-operation (Economic Substance) Law, 2018 – requiring companies (e.g. Exempted companies, LLCs and LLPs) conducting relevant activities to satisfy substance requirements.

This specifically affects companies carrying out financial, insurance services and investment business; corporate management services to affiliates; operating, renting or chartering ships transporting passengers, goods and mail by sea, or using, maintaining or renting containers; companies trading goods with and/or providing services to affiliate companies; companies deriving income from the exploitation of IP rights; and pure equity holding companies.

Note that investment fund vehicles are explicitly excluded from this legislation.

Companies that carry out relevant activities must satisfy the economic substance test – they must:

conduct its core income-generating activities in Cayman (which are defined in the law).
be directed and managed from within Cayman.
have an adequate amount of operating expenditures incurred in or from within the Islands.
have an adequate physical presence (including maintaining a place of business or plant, property, and equipment) in the Islands.
have an adequate number of full-time employees or other personnel with appropriate qualifications in the Islands.

With respect to IP holding companies – companies that are exploiting IP rights and:

have not created such IP
have acquired the IP from a company of the same group structure or from a third-party that has conducted research and development out of Cayman Islands
and licenses the IP to a company(s) of the same group

All Cayman companies are required to notify annually the Authority – stating whether or not they are carrying out relevant activities.

Companies carrying out relevant activities are required to file a basic return related to the amount and type of income with respect to the relevant activity, expenses, assets, management, employees, and physical presence, among other requirements. Existing companies incorporated on or before December 31, 2018, will need to comply with substance requirements by June 30, 2019.

Continued failure to meet the test in the following year may result in higher fines of up to KYD 100,000.

No Tax | Holding Company | Investment Fund | Financial Services Company | Asset Securitization | Private Trust Company | Regulated Crypto Business | International Trading

Saint Lucia

International Business Company (Company limited by shares)

Saint Lucia has become in recent years a popular offshore financial services center due to its pro-business legal framework.

IBCs stand out for its fast registration process, confidentiality, flexible structure, and its low annual fees and reporting requirements.

IBCs can be incorporated by a sole shareholder, who can be either resident or non-resident, individual or corporation. One director is required, who can be either resident or non-resident, individual or corporation, and can be the same person as the shareholder.

Details of members of the IBC remain private, as are not disclosed in a public registry. The equity in the form of the company’s shares is only made available to the Registered Agent.

Reporting requirements are non-existent. Annual return, financial statements, and tax return are not required to be filed.

Saint Lucia has gone through several amendments of its business and tax laws to comply with requirements set by the OECD and the EU and avoid being blacklisted as an uncooperative jurisdiction.

International Business Companies (IBCs) in Saint Lucia will no longer be exclusively available for non-residents and they will be able to do business locally. Effective January 1, 2019, IBCs can be also incorporated by residents and can do business in Saint Lucia.

IBCs are now subject to the local tax regime. However, Saint Lucia has also passed several amendments to its tax laws to switch to a territorial tax system. All companies, including IBCs, will be taxed at 30% corporate tax on income from Saint Lucia-source and will be exempted from taxation on income from foreign sources.

Foreign-source income is defined as follows:

Profits derived from a permanent establishment outside of Saint Lucia
Profits derived from immovable property situated outside of Saint Lucia
Interest income not borne by a Saint Lucia permanent establishment or charged against property located in Saint Lucia
Income derived from investment in securities issued by a person outside of Saint Lucia, e.g. mutual funds, stocks, bonds, etc.
Management charges paid by a nonresident outside of Saint Lucia
Royalty payments received from a foreign permanent establishment and paid to a resident permanent establishment.
Any income deemed to be accrued from foreign sources due to a DTA.

Dividends and capital gains are also exempt from taxation in Saint Lucia.

IBCs conducting certain economic activities will have to meet certain substance requirements – including an adequate number of employees, adequate operating expenditure, adequate investment and capital commensurate according to the activity, as well as file annual tax returns, among others.

IBCs incorporated before December 1, 2018, will be subject to the previous IBC regime until June 30, 2021.

The International Partnerships Act and the International Trusts Act, have also been amended to prevent new registrations since December 1, 2018. International Trusts and International Partnerships registered before December 1, will be grandfathered until June 30, 2021, subject to certain conditions such as the prohibition for trusts to acquire new assets or carry out a different purpose.

Saint Lucia has implemented the OECD’s automatic exchange of information for tax purposes (AEoI),

Due to its features, Saint Lucia’s IBCs are commonly used vehicles for a broad range of investment and business purposes, such as offshore investments, professional services, international trade, insurance and as a holding company.

Liechtenstein

Aktiengesellschaft (Corporation) | Gesellschaft mit beschränkter Haftung, GmbH (Limited Liability Company)

Legal Basis – Civil law (Swiss)

Legal framework – Law on Persons and Companies

Company form – Corporation (Aktiengesellschaft, AG)

Liability – The liability of the shareholders for the company is limited to the amount of their respective shareholdings.

Share capital – The minimum capital of an AG is CHF 50,000. Upon incorporation, the capital must be fully paid up. Capital contributions may be made in cash or in kind.

Shareholders – An AG may be incorporated by one or more natural persons or legal entities, residents or non-residents, acting as incorporators and initial shareholders. The shareholders are registered in the Commercial Register, which is open to the public.

Directors – All companies in Liechtenstein must have at least one director who is a Liechtenstein national or a residence permit holder. Directors may be natural or juristic persons.

Secretary – The company may appoint a secretary, but it is not mandatory.

Registered Address – A company must have a registered office in Liechtenstein.

General Meeting – An AG must hold an annual general meeting at least once per year. A GmbH must hold an annual general meeting at least once per year.

Electronic Signature – Permitted.

Re-domiciliation – Inward/outward re-domiciliation is not allowed.

Compliance – An annual report must be filed to the Commercial Register featuring information on all changes of managing directors, company name and registered office. If the commercial activity is assumed in the company foundation deed, financial reports and auditing reports must be filed to the Tax Office.

Appointment of an auditor and file audited financial statements is compulsory for all companies.

Low Tax | Holding Company | Financial Services Company | Banking | Regulated Crypto Business | Wealth Management

Luxembourg

Société Anonyme (Corporation) | Société à responsabilité limitée (Limited Liability Company)

Legal Basis – Civil law (Napoleonic)

Legal framework – Law of 10th August 1915 on commercial companies

Company form – Corporation (Société Anonyme, SA), Limited Liability Company (Société à responsabilité limitée, Sarl)

Liability – The liability of the shareholders is limited to the amount of their shares. The liability of the partners of the company is limited to their capital contributed.

Share capital – The minimum capital of an SA is EUR 31,000. At the time of incorporation, at least 25% of the capital must be paid up. Capital contributions may be made in cash or in kind. Shares may be bearer shares or registered shares. If the company issue bearer shares, capital must be paid up in full.

The minimum capital of a Sarl is EUR 12,500. Upon incorporation, the capital must be fully paid up. Capital contributions may be made in cash or in kind. The company’s capital is divided into registered shares. Each share is of the same value and each share will have a minimum value of 24.79 EUR. Shares may be transferred to non-shareholders only with the consent of the general meeting at which at least 75% of the company’s capital must be represented.

Shareholders – A SA may be incorporated by one or more natural persons or legal entities, residents or non-residents. Details of the shareholders are not disclosed publicly.

A Sarl may be incorporated by two or more natural persons or legal entities, residents or non-residents, up to 100. The only document filed to register is a Memorandum of Association which does not contain the names of partners

Directors – One director is required. However, if the company has more than one shareholder, it must appoint at least 3 directors, who can be natural or juristic persons, residents or non-residents.

SARL Partners– A Sarl may be incorporated by two or more natural persons or legal entities, residents or non-residents, up to 100. The only document filed to register is a Memorandum of Association which does not contain the names of partners

Managers – At least 1 manager, who may be a natural or juristic person, resident or non-resident, without restrictions.

Secretary – The company must appoint a secretary. SARL it is not mandatory.

Registered Address – A company must have a registered office in Luxembourg.

General Meeting – Annual general meetings are required. SARL | Annual general meetings are required for companies with more than 60 partners. Otherwise, they are not required. The Articles of Association will specify the rules for calling and conducting meetings. Meetings can be held anywhere.

Electronic Signature – Permitted.

Re-domiciliation – Inward/outward re-domiciliation is not allowed.

Compliance – Companies are required to maintain accounting records and file financial reports with the RCS within seven months of the end of the financial year.

Audits are required for companies having two consecutive years meeting two out of three following criteria: net turnover of 8.8 million Euro; balance sheet total of EUR 4.4 million; average staff of at least 50.

Investment Fund | Wealth Management | Financial Services Company | IP Holding | EU Market Entry | Banking | Regulated Crypto Business | Tech Startups | Venture Capital | Tax Treaties | Reputation

Marshall Islands

Non-Resident Domestic Corporation (Company limited by shares) | Limited Liability Company

A Marshall Islands Non-resident domestic company is a very flexible and tax-free vehicle, with just a few restrictions on the business that the company can carry out. It can engage any legal business activity, except gaming and financial services such as banking, insurance, and trust.

Non-resident domestic companies are also restricted from doing business with Marshall Islands residents or companies but may maintain professional contact with solicitors, barristers, accountants, bookkeepers, trust companies, management or secretarial companies, investment advisors, or other similar persons or entities carrying on business within the Marshall Islands.

This type of offshores corporations are exempt from all form of local taxes.

Marshall Island non-resident domestic entities may be incorporated by a sole shareholder, who can be either an individual or a corporation and may be managed by a sole director who can be the same person as the shareholder. There are no minimum capital requirements and shares may be issued in any form.

Members of a Non-resident domestic entity may elect to not disclose their details in a public register.

In addition, Non-resident domestic entities face no reporting requirements. No audited accounts or annual returns are required to be provided to the Government.

The Republic of the Marshall Islands passed in late 2018 the Associations Law (Amendment) Act, 2018 which amends and introduces certain provisions to the Business Corporation Act, the Revised Partnership Act, the Limited Partnership Act, and the Limited Liability Company Act.

The Associations Law (Amendment) has introduced a requirement to non-resident domestic entities (offshore companies) that provide financial services which would be regulated under the Banking Act (financial services providers) if the activities were carried out within the Marshall Islands – to be regulated by the relevant authority and fulfill licensing requirements of the jurisdiction in which the Marshall Islands company is carrying out activities.

In addition, it grants the power to the Registrar of Corporations to implement economic substance requirements and certain reporting requirements for offshore companies. We can expect further economic substance regulations to be enacted shortly, in line with those of other offshore jurisdictions.

The Marshall Islands has implemented the OECD’s automatic exchange of information for tax purposes (AEoI).

A Marshall Islands’ non-resident domestic company may raise capital offering its shares to the public, carry out third-party trading and act as an investment advisor.

Furthermore, the Marshall Islands’ offshore companies are usually used as a holding structure for owning movable and immovable assets and for conducting Forex brokerage activities.

The Marshall Islands’ Limited Liability Companies Act was enacted in 1996 adopting the model of Delaware LLC. A Marshall Islands LLC is a flexible entity that allows to form its structure according to its operating agreement, rather than dictated by rigid legal statutory mandates.

The LLC is a hybrid of both partnership and corporate structures, protecting LLC members from the debts incurred by the entity and separating the rights of its members and that of the LLC.

Members pay personal income taxes in their country of residence on LLC profits proportionally to their share of participation in the LLC company, whether distributed or not.

Besides the aforementioned structuring flexibility, Marshall Islands’ LLCs benefits from confidentiality, no reporting requirements, and local tax-exemption if the business is conducted outside the jurisdiction.

In addition, it grants the power to the Registrar of Corporations to implement economic substance requirements and certain reporting requirements for offshore companies. We can expect further economic substance regulations to be enacted shortly, in line with those of other offshore jurisdictions.

The Marshall Islands has implemented the OECD’s automatic exchange of information for tax purposes (AEoI) through the Common Reporting Standard (CRS).

The Marshall Islands LLC is an excellent entity for movable and immovable assets holding and asset protection.

No Tax | Yachting

Malta

Company limited by shares

Malta is a reputable, compliant and transparent financial hub, and the gateway to the European Union, a market of more than 500 million people.

Due to its advantageous tax regime, Malta is the jurisdiction chosen by a large number of international companies and holding companies, to establish their headquarters and do business in the European Union.

Although its corporate standard rate is 35%, in practice there is a system of tax credits and refunds for individuals and corporate shareholders of part of the tax suffered on the distribution of profits.

The tax refund may be either a six-sevenths refund for trading income, a five-sevenths refund for passive interest and royalties, or a two-thirds refund for passive income. This may lead to a reduction of corporate tax to effective tax rates of between 5 and 10 percent, the lowest across the European Union.

Holding companies may benefit from a participation exemption. Dividend income, profits from a foreign P.E., and capital gains may be tax-exempt if the holding fulfills certain participation conditions. Furthermore, certain investments that yield a fixed rate of return may also be tax-exempt.

Malta is a full member of the EU and since 2008 has adopted the Euro as its official currency, with the benefits that it entails, such as the availability of funding opportunities or the European tax directives, including the Parent-Subsidiary Directive, the EU Mergers Directive, and the EU Interest & Royalties Directive.

Malta has also signed a large list of Double Taxation Agreements, and companies doing business in Malta have access to an English-speaking high-skilled workforce, make it even more attractive to incorporate in the jurisdiction.

Malta costs to obtain and administrate licenses are one of the lowest of the European Union and often valid for the whole EU territory. This makes Malta an attractive jurisdiction to establish businesses related to e-gaming, shipping, airline or investment funds.

In addition, Malta company registration process is simple and straightforward, being possible in as little as 1 day to incorporate a company.

It is important to note that corporate tax residence in Malta is defined by the place of management and control, so to qualify for tax residency it may not be sufficient to just hold annual general meetings in Malta, decisions have to be really taken there. A company incorporated in Malta but not ordinarily resident is subject to taxation on Malta-source profits and profits remitted to Malta.

Malta is a compliant jurisdiction leading OECD and FATF compliance, and it has implemented the OECD’s automatic exchange of information for tax purposes (AEoI).

All in all, Malta is a reputable jurisdiction and its private company limited by shares an excellent vehicle, whether to conduct international trading, hold immovable assets and intellectual property, conduct e-gaming business, or as a holding group company, a ship-owning company, an investment vehicle or a captive insurance company.

Investment Fund | Low Tax | Financial Services Company | IP Holding | EU Market Entry | Gaming | Regulated Crypto Business | International Trading | Merchant Account | Tax Treaties | Ecommerce | Holding Company

Mauritius

Global Business Company (Private company limited by shares)

Mauritius is a politically stable jurisdiction and the largest international financial and business hub in the Indian Ocean region with a strong liberal economy, a reputable banking system and a wide offer of qualified professional services.

Its pro-business and flexible regulatory framework provides reliability and security for the incorporation of international companies.

Under the Companies Act, 2001 and the Financial Service Act 2007, companies may apply for a Global Business License (GBL) that allows them to carry out Business outside the jurisdiction and benefit from an advantageous tax regime.

Companies holding the Global Business License may only undertake activities set out in the Business Plan filed with the Financial Services Commission (FSC) at the time of application for a license or as amended and notified to the FSC.

GBL companies may conduct financial services activities such as banking, insurance, assurance, reinsurance, fund management, collective investment schemes, trust management, trusteeship business provision if the relevant license is obtained.

GBL companies may benefit from an advantageous tax regime and a broad network of double taxation treaties.

The Finance (Miscellaneous Provisions) Act 2018 has brought new enhanced substance requirements for Global Business Corporations (previously GBC1 companies).

Licensing conditions require GBC companies to employ directly or indirectly, a reasonable number of suitably qualified persons to carry out the core income-generating activities, and have a minimum level of expenditures in Mauritius proportional to the level of its activities.

For example, investment holdings will be required to have annual expenditures in Mauritius of at least USD 12,000, whereas non-investment holdings will require USD 15,000 of expenditures and 1 employee if annual turnover is less than USD 100 million or 2 employees if annual turnover is more than USD 100 million.

Other activities such as fund management will require annual expenditures of USD 30,000 and from 1 to 3 employees in Mauritius depending on the amount of assets under management. Financial Institutions such as Insurance, Leasing or Credit finance, intermediaries such as investment advisors, insurance brokers and agents, and other financial services will also be required to spend a certain amount per year in Mauritius and have from 1 to 3 employees depending on their level of activities.

Global Business Companies holding and exploiting IP rights will be required to prove that they have incurred the appropriate research and development expenditure to meet the substance requirements.

With respect to the taxation of GBL companies – the previous Deemed Foreign Tax Credit (DFTC) regime has been abolished. Previously, GBC1 companies were eligible for a unilateral foreign 80% tax credit on all types of income, reducing the effective income tax rate to 3%. Now, GBL companies are subject to local taxes at a rate of 15%.

However, an 80% Partial Exemption Regime on certain income streams will still be available – as long as the above-mentioned substance requirements are met.

Income streams available for an 80% partial exemption (3% effective tax rate) include foreign dividends (subject to such an amount not being treated as an allowable deduction in source country), interest income and income derived by companies engaged in ship and aircraft leasing.

To qualify for a Global Business License, a company must meet at least one of the following criteria:

the corporation has or shall have office premises in Mauritius; or
the corporation employs or shall employ on a full-time basis at the administrative/technical level, at least one person who shall be resident in Mauritius; or
the corporation’s constitution contains a clause whereby all disputes arising out of the constitution shall be resolved by way of arbitration in Mauritius;
the corporation holds or is expected to hold within the next 12 months, assets (excluding cash held in a bank account or shares/interests in another corporation holding a Global Business License) which are worth at least USD 100,000 in Mauritius;
the corporation’s shares are listed on a securities exchange licensed by the Commission; or
it has or is expected to have a yearly expenditure in Mauritius which can be reasonably expected from any similar corporation which is controlled and managed from Mauritius.

In Mauritius, companies may be structured as protected cell companies.

Protected cellular companies are entities made up of a core and several ring-fenced protected cells, creating separate portfolios of assets and liabilities which are statutorily segregated.

Cellular companies have both core capital and cellular capital, which is the capital invested in individual cells.

Creditors of a cell are unable to seek recourse from the assets of any of other cells or of the core. This corporate vehicle provides protection contagion to fund promoters as an umbrella unit trust.

In addition, this corporate structure provides several cost savings such as avoiding to setting up new entities, lower costs on corporate governance, company administration and compliance.

All in all, GBL companies are excellent vehicles for investment, investment holding, and fund management purposes. They benefit from an advantageous tax regime with an effective tax rate that may be as little as 3%, access to a broad list of tax treaties and no withholding taxes on dividends and royalties, as well as an exemption on capital gains and tax credits on dividends received.

Low Tax | Investment Fund | Wealth Management | Financial Services Company | Tax Treaties

Malaysia

Sendirian Berhad (Private company limited by shares) | Labuan Private company limited by shares

Malaysia is strategically located in the center of South East Asia closely connected to large Asian markets such as Singapore, China, Vietnam, Thailand, and India.

Malaysia is also a member of the Association of South East Asian Nations, benefitting from the free trade agreement among its member states.

Companies in Malaysia benefits from a territorial tax system, where income derived from foreign-source is not subject to taxation, whether remitted to the country or not. Furthermore, dividends paid to non-residents are exempt from withholding taxes.

There are no restrictions on Malaysian private limited companies upon repatriation of capital, profits, dividends, and royalties.

Its strategic location and tax regime make the Malaysian Sdn Bhd. an attractive corporate vehicle for establishing regional headquarters.

In addition, Malaysia has a wide variety of incentives in the form of tax holidays up to 10 years, tax allowances, accelerated capital allowances or reinvestment allowances.

Tax incentives cover the major industry sectors such as manufacturing, IT services, biotechnology, Islamic finance, energy conservation, environmental protection, regional operating headquarters, venture capital companies, business trusts, as well as for companies incorporated in special economic regions, among others.

Malaysian entities also benefit from the 68 double taxation treaties that Malaysia has concluded with other jurisdictions.

Malaysia has also low start-up costs compared to other business hubs. For instance, rental rates and wages are considerably much lower than in Singapore or Hong Kong.

Malaysia workforce is high-skilled and English-speaking and business documents are widely available in English.

Malaysia is also a strategic jurisdiction to trade by sea, it is located on the straits of Malacca and it has 4 major ports Pasir Gudang, Port Klang, Port Tanjung Pelepas, and Bayan Lepas.

Companies engaging manufacturing for export may be set in Malaysia their manufacturing and distribution base. There are 5 free zones (Pasir Gudang, Port Klang, Port Tanjung Pelepas, Kulim Hi-Tech Park, and Bayan Lepas), where companies are exempt from customs duties and benefit from flexible trading laws.

Although a company in Malaysia may be incorporated with as little as RM 2 paid-up capital, in order to qualify for work permits for foreign employees, a 100% foreign-owned company must have a minimum paid up capital of RM 500,000 for advisory and consultancy business, and minimum paid up capital of RM 1,000,000 for 100% foreign-owned companies engaging import, export, restaurant, and trading business.

100% foreign-owned private limited companies may be restricted to conduct certain activities and may require a business license/approval from the relevant authorities.

A joint venture with a Malaysian partner (at least 50% of shares) requires a minimum paid up capital of RM 350,000 with an authorized capital of RM 500,000.

An Sdn Bhd is required to appoint a resident director and a licensed resident secretary, who must be natural persons.

Non-export oriented industries may face certain restrictions when hiring foreign employees. Such as a minimum of total sales of RM2 million and a minimum paid-up capital of RM100, 000. Manufacturing, service, plantation and construction sectors may employee citizens from countries, include Indonesia, Thailand, Nepal, Cambodia, Myanmar, Laos, Vietnam, and the Philippines.

Malaysia has agreed to implement the OECD’s automatic exchange of information for tax purposes (AEoI) by 2018.

In summary, Malaysia is the gateway from Southeast Asia and despite its legal obstacles, an attractive jurisdiction to establish Regional Headquarters and export-oriented companies, while benefitting from an advantageous tax regime and a high-skilled cost-effective workforce.

The Labuan International Business and Financial Centre is a reputable free trade area located in the Federal Territory of Labuan, an island off the coast of the state of Sabah in East Malaysia.

Labuan is becoming one of the major financial hubs of Asia due to its pro-business regulation, low taxes and compliance with international standards on due diligence and transparency.

Companies incorporated in Labuan benefit from an attractive tax regime. Trading profits arising outside of Malaysia are taxed at 3%.

Certain royalties or income derived from the exploitation of an intellectual property right will be subject to tax under the Malaysian Income Tax Act, rather than under the Labuan tax.

Non-trading profits such as those arising from the holding of investments in securities, stocks, shares, loans, deposits or other properties may not be subject to taxation.

Furthermore, payments on dividends, interests, royalties, technical and management fees are exempt from withholding taxes.

Labuan companies no longer require an authorization from the Ministry to conduct Labuan business activities with Malaysian currency or with Malaysian residents.

Labuan is ideal for import-export businesses. As it has a free-port status, indirect taxes do not apply. Stamp duty is also exempted on all instruments executed by a Labuan entity in connection with its Labuan business activity.

Labuan companies are not subject to exchange controls and free movement of capitals is ensured.

In addition, Labuan incorporated entities may benefit from the tax treaties that Malaysia has concluded.

However, some treaties especially exclude Labuan from the treaty tax benefits. Including, Japan, Netherlands, United Kingdom, Australia, Sweden, Luxembourg, Republic of Seychelles, Chile, Indonesia, South Africa, and South Korea.

To benefit from these tax treaties, a Labuan company may elect to be treated as a Malaysian resident company and taxed at Malaysian standard rates.

Labuan companies are required to have the so-commercial substance in Labuan. This could be having a Labuan bank account, staff in Labuan, a virtual office or an annual board meeting in Labuan.

Furthermore, Labuan holdings and companies conducting regulated activities are required to meet certain economic substance requirements – they will need to have an adequate number of full-time employees and an adequate amount of annual operating expenditure in Malaysia according to their business.

For instance, Labuan holdings would be required to have a minimum of 2 full-time employees in Labuan and a minimum annual expenditure in Labuan of RM 50,000.

There are certain restrictions for Labuan companies. A Labuan private limited company is not permitted to engage in the business of banking, insurance or other financial services unless it is licensed under the Offshore Banking Act 1990 or the Offshore Insurance Act 1990.

Expatriate directors and employees of a Labuan company can secure a 2-year multi-entry business visa, together with their dependents.

Among other benefits, employees of Labuan companies enjoy a 50% tax-exemption on employment income in a managerial capacity with Labuan entity in Labuan, or in a co-located office of marketing office which may be located elsewhere in Malaysia to facilitate business meetings.

A 100% exemption applies for non-citizens in respect of director’s fees from Labuan entities.

A 65% exemption of the statutory income applies on the provision of qualifying professional (legal, accounting, financial or secretarial) service rendered in Labuan by that company to a Labuan entity.

Malaysia has implemented the OECD’s automatic exchange of information for tax purposes (AEoI).

In summary, the Labuan private limited company is an excellent vehicle for ASEAN market entry, fund management, group holding company, international trade, and professional services, among others.

Territorial Tax | Outsourcing | Tax Treaties | Manufacturing | Residency / Visa | Emerging Market

Netherlands

Besloten Vennootschap met beperkte aansprakelijkheid (Private company limited)

Legal Basis – Civil law (Napoleonic)

Legal framework – Book 2 of the Dutch Civil Code

Company form – Private company limited (Besloten Vennootschap met beperkte aansprakelijkheid, BV)

Liability – The liability of the shareholders is limited to the amount of their shares.

Share capital – BVs do not require a minimum share capital (only a nominal deposit of €0.01). Company equity is divided into shares, which are not freely transferable and are privately registered.

Shareholders – A BV may be incorporated by one or more natural persons or legal entities, residents or non-residents. Details of the shareholders are disclosed publicly.

Directors – A BV must have at least one director. Tax substance rules require that at least 50% of the board consist of Dutch tax resident directors.

Secretary – The company may appoint a secretary, but it is not mandatory.

Registered Address – A company must have a registered office in the Netherlands.

General Meeting – A BV is required to hold an annual meeting of shareholders to vote on certain items, such as the appointment of directors and adoption of annual accounts. AGM may be held outside the Netherlands.

Electronic Signature – Permitted.

Re-domiciliation – Inward/outward re-domiciliation is usually not allowed. An exemption applies to the Societas Europeae (European Limited Liability Companies) which in some cases can change their legal seat to the Netherlands.

Compliance – A BV has to draft and file its annual reports and accounts with the Chamber of Commerce and file a tax return annually with the Tax and Customs Administration (Belastingdienst).

Medium and large companies are required have their annual report audited by independent, qualified and registered Dutch auditors, if 2 of the following 3 criteria are fulfilled by the company during 2 successive years: total assets exceeding EUR 4.4 million; turnover exceeding EUR 8.8 million; a workforce of more than 50 employees.

Tech Startups | Reputation | Financial Services Company | IP Holding | EU Market Entry | Venture Capital | International Trading | Merchant Account | Tax Treaties | Ecommerce | Holding Company

Panama

Sociedad Anónima (Corporation limited by shares) | Sociedad de Responsabilidad Limitada (Limited Liability Company)

Panama is an international trade and financial center strategically located between the Americas. Its politically stable environment, its pro-business legislation, its attractive tax regime, and a developed and large banking sector have made Panama one of the most popular jurisdiction to establish international companies.

Panama has excellent infrastructure and communications and is one of the largest international distribution and free trade centers worldwide.

Panama levies taxation in a territorial basis, hence corporations in Panama that exclusively conducts its business outside of Panama, are exempt from all local taxes including income tax, capital gains tax, withholding taxes, and stamp duty on transfer of corporate shares, and other property. Furthermore, interest paid by local banks are tax-exempt and there are no foreign exchange controls.

Panama corporations are also exempt from local taxes on income earned from the international maritime commerce and trade by owners of vessels registered in Panama, regardless of the place where the contract is executed.

Panama corporations may also benefit from confidentiality. Shareholders and beneficial owners’ details are not disclosed in a public registry and shares may be registered in a bearer form, but must be deposited with a custodian (immobilized). Confidentiality of business and banking transactions is protected by law.

Although names and addresses of directors and officers are included in the Articles of Incorporation and available to the public, the use of nominees is permitted.

Panama corporations may be incorporated for any legal purpose and activity and only require a license to conduct financial or insurance activities. They can be incorporated by a sole shareholder but at least 3 officers are required, who may be the same person and may be corporate or individual, resident or non-resident. Annual general meetings are not mandatory.

There are no initial capital requirements and shares may be issued with par value or non-par value.

Panama corporations exclusively doing business outside the country, also benefit from minimal reporting requirements as they are not required to file annual return nor tax return, neither filing any kind of statements or financial reports.

The incorporation process is quick and straightforward, and the ongoing maintenance costs are low.

In addition, citizens of more than 50 countries (denominated friendly nations), may be eligible to apply for a permanent residence permit through incorporation, provided that certain conditions are met.

Panama is a compliant jurisdiction and has implemented the OECD’s automatic exchange of information for tax purposes (AEoI).

Panama corporations are commonly used for international tax structuring, international commercial transactions, banking, and merchant account access, e-commerce and internet services, trading, asset management or as a holding company.

A Sociedad de Responsabilidad Limitada (SRL) is a hybrid of a corporation and a partnership, similar to UK LLPs. SRLs may be considered tax neutral entities and profits may be taxed at the personal level.

Non-resident members may pay personal income taxes in their country of residence on the SRL profits proportionally to their share of participation in the SRL, whether distributed or not.

It is important to note that certain countries do not recognize the pass-through status of an SRL, if the SRL is deemed to be tax resident in one of such countries, it may be subject to local corporate income tax.

SRL’s tax transparency may allow residents of certain jurisdiction to not be penalized under controlled foreign company rules.

In addition, Panama levies taxation in a territorial basis, hence SRLs in Panama that exclusively conducts its business outside of Panama, are exempt from all local taxes including income tax, capital gains tax and withholding taxes. Furthermore, interest paid by local banks are tax-exempt and there are no foreign exchange controls.

Unlike a corporation, an SRL requires at least two members, and its details are disclosed in a public registry. At least one manager is required who may be a member or a third party. There are no initial capital requirements.

Panama SRLs exclusively doing business outside the country, also benefit from minimal reporting requirements as they are not required to file annual return nor tax return, neither filing any kind of statements or financial reports.

The incorporation process is quick and straightforward, and the ongoing maintenance costs are low.

Panama is a compliant jurisdiction and has agreed to implement the OECD’s automatic exchange of information for tax purposes (AEoI) by 2018.

Panama SRLs are commonly used for fund management, e-commerce, access to banking and merchant accounts, and professional services.

Territorial Tax | International Trading | Ecommerce | Merchant Accounts | Residency / Visa | Financial Services Company

Philippines

Corporation

Legal Basis – Civil law

Legal framework – The Corporation Code of the Philippines, Foreign Investments Act

Company form – Corporation

Liability – The liability of the shareholders for the company is limited to the amount of their shareholdings.

License – An overseas company intending to do business in the Philippines must establish a legal presence in the country by obtaining a license to do business from the Securities and Exchange Commission (SEC). Usually, foreign companies that wish to do business in the Philippines, incorporating a subsidiary. A subsidiary can engage in the activities allowed by the SEC, as shown in its SEC-approved articles of incorporation.

Share Capital – There is a minimum US$200,000 equity capital for the domestic market enterprise, or US$100,000 paid-in capital if the company is involved in advanced technology as determined by the Philippines’ Department of Science and Technology (DOST) or

employs at least 50 direct Filipino employees.

At the time of incorporation, at least 25% of the authorized capital must be subscribed, and at least 25% of the subscription must be paid-up (subject to applicable minimum capitalization).

If the company intends to export more than 60% of its products, it will be incorporated as an export market enterprise, and above-mentioned capital requirements will not apply. The minimum paid up capital for Export companies is PHP 5,000.

There are certain industries that require a higher amount of minimum paid-up capital, e.g. retail trade with foreign equity (at least US$2,500,000).

Shareholders – There must be at least 5 but no more than 15 incorporators, who must act as directors. Each of them has to own at least one share in the company and the majority must be Philippines residents (3 of 5). Using nominee incorporators is a common practice. Details of shareholders are available to the public.

Directors – A Filipino subsidiary must have at least 5 directors who must be natural persons and each one must own at least one share. A majority of the directors must be Philippines residents. Details of directors are available in a public registry.

Secretary – Philippines companies must appoint a secretary, who must be a citizen and resident in the Philippines.

Registered Address – A company must have a registered office in the Philippines.

General Meeting – Generally not mandatory.

Electronic Signature – Permitted.

Re-domiciliation – Inward/outward re-domiciliation is not allowed.

Compliance – Under Philippine tax laws, corporations are required to pay internal revenue taxes and submit a tax return. Companies whose gross quarterly earnings or receipts exceed PHP150,000 must have their accounts audited and examined yearly by independent certified public accountants in the Philippines.

The SEC requires the yearly submission of the financial statements of a company.

ASEAN Market Entry | Outsourcing | Manufacturing | Residency / Visa

Seychelles

International Business Company (Company limited by shares)

Seychelles is a popular offshore financial center and a growing international company formation market.

Companies incorporated under the International Business Companies Act, 1994, benefit from one of the quickest company formation worldwide and the lowest annual government fees.

International Business Companies are considered resident for tax purposes but are subject to a territorial tax system, whereby income accrued from foreign-sources is not subject to taxation.

To incorporate a Seychelles IBC, only one shareholder and one director is required, who can be either an individual or a corporation and may be non-resident.

Members benefit from confidentiality as no details are available in the public registry.

IBCs are not required to file an annual return or financial statements, as long as they do not derive income from within Seychelles.

Seychelles has implemented the OECD’s automatic exchange of information for tax purposes (AEoI).

Seychelles offshore companies are commonly used for estate planning, wealth management as well as a holding company and to conduct international trading.

Territorial Tax

Singapore

Private company limited by shares

Singapore is the trading hub of Southeast Asia. Home of the busiest port in the world, Singapore is a developed country in one of the fastest growing regional economies.

It has enormous potential for startups and internet entrepreneurs from all over the world. The country fosters entrepreneurship, and the government supports the free market.

One of the most advantageous parts of doing business and set up a company in Singapore is the clear and transparent tax scheme and the availability of several tax breaks and incentives for startups and technological innovation.

Furthermore, companies incorporated in Singapore can benefit from a broad list of more than 70 tax treaties that Singapore has concluded with foreign jurisdictions.

There are many different government grants, incubators, accelerators, private equity funds and banks who can provide financing for your business at every stage of development.

Financing is a core component in any business, and Singapore provides the best alternative investment market in the entire world.

Courts in Singapore are under common law jurisdiction and are known for being speedy. For entrepreneurs who want boots on the ground sourcing from the vast resources in South East Asia, the Singapore court system can give them a confident backing for hiring, clear laws, and a good government with low corruption levels.

The country is also an important international financial hub, a solid banking system leading world’s private banking sector, offering top-notch corporate banking facilities and a broad range of banking services, investment funds, and insurance services, among others.

It also has the fourth largest currency exchange and capital market worldwide, behind New York, London, and Tokyo.

In addition, the economy of Singapore is considered as one of the most open economies, which welcomes thousands of foreign investors, expats entrepreneurs and multinational companies employees.

Singapore’s immigration policy is geared towards attracting foreign talent, with several visa schemes to attract high-skilled foreign employees, entrepreneurs and investors.

Singapore participates in the OECD’s Automatic Exchange of Information for tax purposes (AEoI) and is conducting exchanges of information through Common Reporting Standard (CRS).

All in all, Singapore is an excellent jurisdiction to incorporate and its private company limited, a powerful vehicle for international trade, start-ups looking to raise capital, internet entrepreneurs, holding companies, merchants, and any cross-border business.

Low Tax | Tech Startups | Venture Capital | Financial Services Company | ASEAN Market Entry | China Market Entry | Indian Market Entry | Banking | IP Holding | Ecommerce | Merchant Accounts

Thailand

Private company limited by shares

Thailand is the second largest economy of the Association of Southeast Asian Nations (ASEAN) and the gateway of one of the most growing and promising markets worldwide. Thailand has a dynamic diversified economy, with leading industries such as automotive and electronics.

In addition, Thailand has concluded free trade agreements with China, India, Japan, South Korea, Australia, and New Zealand, among others.

Incorporating and doing business in Thailand gives access to a growing domestic consumer market, cost-effective skilled labor, a strengthened banking system, and a relatively high commercial freedom.

Thailand has world-class infrastructure, including a developed highway system, 7 international airports, modern city-wide mass transit, 6 deep sea ports, and 2 international river ports.

Furthermore, business costs in Bangkok such as office rentals, electricity and water are considerably lower than other trade hubs of the region such as Singapore, Kuala Lumpur, Shanghai or Hong Kong.

Usually, foreign-ownership of a Thai company is limited to 49% capital shares, but this restriction may be waived if a Foreign Business License is granted if the business is unique or does not compete with Thai businesses. Conditions, such as minimum capital (THB 3 million), transfer of technology and reporting requirements, may apply.

However, a 49% foreign-owned Thai company may be formed with a preference share legal structure and other protection mechanisms to ensure that the foreign minority shareholder obtains full control rights, voting majority in the shareholder meeting and undivided profits.

In addition, under the US-Thailand Treaty of Amity, Americans may hold a majority of the shares or the whole company, subject to certain conditions and restrictions on certain economic activities.

Furthermore, Thailand has concluded double tax agreements with more than 40 jurisdictions.

Thailand has not implemented the OECD’s Automatic Exchange of Information for Tax Purposes (AEoI) yet.

In summary, Thailand is an emerging market and the regional hub of Southeast Asia and an interesting jurisdiction to incorporate a company for manufacturing, outsourcing, and regional headquarters.

International Trading | Tax Treaties | Manufacturing | Outsourcing | Residency / Visa | Reputation | Regulated Crypto Business | Tax Treaties

USA

Delaware

Corporation | Limited Liability Company

Delaware is one of the world’s most popular jurisdictions to incorporate a company. Nearly half of US publicly traded companies and more than 65 percent of all Fortune 500 companies are incorporated in Delaware. Including giants such as Apple, Coca-Cola, Google, and Wal-Mart.

Delaware stands out for its separate Court of Chancery, the oldest business court in the US, specialized corporate law cases. The Court of Chancery use judges instead of juries and are usually expertized in complex corporate law matters.

Delaware Court maintains the most advanced and up-to-date case law, that allows for predictability and therefore decreasing liability and litigation among Delaware companies.

These predictable laws allow corporations to make better assessments of the probable outcomes of litigation or the advisability of settling a case.

The legal and liability protection of established corporate laws in Delaware makes the jurisdiction one of the most reputable business-friendly states.

The State of Delaware has also an attractive tax regime. Delaware corporations doing business exclusively outside of the State are exempt from State tax. Furthermore, there is no inheritance tax on stock held by non-Delaware residents, no state sales tax on intangible personal property and share of stock owned by non-residents are not subject to Delaware taxes.

Companies incorporated in Delaware are confidential. Details of shareholders, directors, and officers are not disclosed in the company formation documents and are not available to the public.

Delaware corporations are flexible structures, the same person may be the sole shareholder, the director, and the officer.

In addition, it has one of the quickest company registration procedures and lowest costs of incorporations in all United States.

Delaware is an excellent jurisdiction for startups and companies seeking financing. Venture capitalists, angel investors, investments banks and other investors prefer Delaware corporations above all other states and corporate structures.

Delaware LLCs requires minimal corporate structure requirements for its management, nor are there provisions for company meetings, directors, secretary, or capital. A Delaware LLC may be incorporated by only 1 member who can be also its manager.

Delaware LLCs may elect to be treated as a C-Corp (subject to corporate tax) or be fiscal transparent entities. Profits of an LLC that elects to be a fiscally transparent entity, is considered to be transferred to its members and taxed at the personal level. Members pay personal income taxes on LLC profits proportionally to their share of participation in the LLC, whether distributed or not.

This means that a Delaware LLC is not seen as a separate entity for taxation purposes, and therefore if its members are non-US tax residents they will only be required to pay taxes in the US on income sourced from the US.

If its members are tax residents in a no tax or territorial tax country and no income is sourced from the US, they may operate with a Delaware LLC fully tax-exempt while benefitting from the reputation of a US incorporated entity.

Companies incorporated in Delaware are confidential. Details of members, managers, and officers are not disclosed in the company formation documents and are not available to the public.

In addition, it has one of the quickest company registration procedures and lowest costs of incorporations in all United States.

Delaware LLCs are excellent vehicles for international professional services, conduct international trade, e-commerce, Amazon FBA and get access to merchant accounts.

Tax Treaties | Venture Capital | Merchant Accounts | Tech Startups | Ecommerce | International Trading | Banking

Wyoming

Limited Liability Company

Wyoming has always had a pro-business policy. They were the pioneers of the LLC in 1977, when they combined a partnership and a corporation to create a hybrid legal entity called a Limited Liability company – whereby the owners of the LLC would be limited in risk of losing (like a corporation) but benefitting from the pass-through federal taxation and flexibility of a partnership.

Thereby enabling businesses to flourish because owners could act without personal risk in the new business venture.

Wyoming LLCs are flexible structures, their owners can freely determine in the operating agreement, how the LLC will run. There are minimal company structure requirements for its management, nor are there provisions for company meetings, directors, secretary, or capital.

It may be formed by the only person and may be managed by its members or employees without an ownership stake.

Wyoming LLCs are private entities. Details of its members, managers or officers are not disclosed in a public registry.

In addition, Wyoming is the only state with specific laws protecting the interests of the members of Single-Member LLCs. Wyoming has spent the time to consider the rights and protections of their Limited Liability Company, and it is reflected by having the strongest legislative law in the nation.

The only state in the US which provides single member LLCs ownership charging order protection in Wyoming. A charging order is an order by the court directed to the LLC ordering it to send all distributions that would have gone to the owner/debtor to the judgment holder instead. This limitation can make it more difficult for a creditor to collect on their judgment because the creditor will not be able to force the debtor to sell his ownership interest in the company.

The incorporation procedure is simple, straightforward, and it can be done in as little as 1-2 days. Wyoming LLCs also benefits from the lowest incorporation and maintenance costs of the US.

Wyoming LLCs may elect to be treated as a C-Corp (subject to corporate tax) or be fiscal transparent entities. Profits of an LLC that elects to be a fiscally transparent entity, is considered to be transferred to its members and taxed at the personal level. Members pay personal income taxes on LLC profits proportionally to their share of participation in the LLC, whether distributed or not.

This means that a Wyoming LLC is not seen as a separate entity for taxation purposes, and therefore if its members are non-US tax residents they will only be required to pay taxes in the US on income sourced from the US.

If its members are tax residents in a no tax or territorial tax country and no income is sourced from the US, they may operate with a Wyoming LLC fully tax-exempt while benefitting from the reputation of a US incorporated entity.

Wyoming LLCs are commonly used for asset protection, e-commerce, Amazon FBA, professional services, banking in the US and get access to merchant accounts, for startups and as a holding company.

Tax Transparent | Ecommerce | Merchant Accounts | Banking | Asset Protection | Tax Treaties

St. Vincent and the Grenadines

Business Company (Company limited by shares) | Limited Liability Company

Saint Vincent and The Grenadines is an independent and politically stable jurisdiction.

Business Companies in St. Vincent have one of the simplest and straightforward registration procedure and one of the lowest incorporation and mainteinance costs worldwide.

Requirements for a BC are minimal. No minimum paid-up capital required, the company may be incorporated with a sole shareholder and a sole director and annual general meetings are not mandatory.

Appointment of secretary is optional. It can be administered from St. Vincent or from any part of the world, and its books and records may be kept outside the territory.

BCs are allowed to issue registered shares, with or without par value, with voting or non-voting rights.

Shareholders and directors’ details of an IBC are not filed in any public registry.

Saint Vincent and The Grenadines has implemented the OECD’s automatic exchange of information for tax purposes (AEoI).

Saint Vincent and The Grenadines BCs are commonly used for asset protection, Forex brokers, international trade, as well as for yacht and vessel registration.

Limited Liability Companies in Saint Vincent and The Grenadines are hybrid entities with separate legal personality and limited liability of its members but with greater structure flexibility than a corporation and taxed as a partnership.

There may be incorporated as a single-member LLCs, and there are no company structure requirements for its management, nor are there provisions for company meetings, directors, secretary, or capital. Its operating agreement may be arranged by its members according to their needs.

Members pay personal income taxes in their country of residence on LLC profits proportionally to their share of participation in the LLC company, whether distributed or not.

LLC’s tax transparency allows residents of certain jurisdiction to not be penalized under controlled foreign company rules.

Limited Liability Companies doing business internationally are exempt from all form of local taxes.

The Limited Liability Companies Act 2008 also allows the formation of Series LLC. Which is comprised of a Single-member LLC with ownership of multiple LLCs that own a single asset business.

Each LLC unit may have different purposes and its members may hold different rights, duties and powers. The Series LLC adds a layer of asset protection to investors, as the liabilities of a single LLC within the Series do not affect the assets of other single LLCs or the Series LLC.

Furthermore, Saint Vincent provides LLC ownership charging order protection. This means that a judgment creditor’s sole remedy against the economic interest of a member of an LLC is by way of charging order and such creditor does not have any right to obtain possession of or otherwise exercise legal or equitable remedies with respect to the property or assets of the LLC.

Confidentiality of persons doing business in Saint Vincent is ensured by the Preservation of Confidential Relationships International Finance Act 1996. Furthermore, members and officers’ details of an LLC are not filed in any public registry.

In addition, St. Vincent and the Grenadines has a relatively small but solid and properly regulated private banking sector.

Saint Vincent and The Grenadines is a compliant jurisdiction and has agreed to implement the OECD’s automatic exchange of information for tax purposes (AEoI) by 2018.

Saint Vincent and The Grenadines LLCs are vehicles commonly used for asset protection, fund management and investment structures.

British Virgin Islands

Business Company (Company limited by shares)

The British Virgin Islands is one of the world’s largest offshore financial center and a leading center for offshore company incorporation.

The British Virgin Islands has a strong offshore regulatory environment. They have a distinct combination of oversight and a laissez-faire approach which makes it both easy to do business – yet reputable with banks and other jurisdictions around the world. The British Virgin Islands has reputable compliance and regulatory body, which makes it very simple and easy to bank with a BVI company.

Business companies in BVI are commonly used as asset protection vehicles, very often in combination with a trust as a holding. The directors of the BVI BC may protect the assets by transferring its assets to another company, trust, foundation, association or partnership; the directors can also merge or consolidate with any other company or can re-domicile the BC to another jurisdiction entirely.

The BVI Business Companies Act, 2004 states that all international business companies formed in BVI must establish and maintain a Register of Directors, whereby the initial director is appointed within 30 days of incorporation. Further statutory requirements are minimal and flexible.

There are no requirements to appoint a local director or a secretary, no minimum capitalization required, BVI BCs can re-quire and re-issue their own shares.

Shares can be issued for a consideration other than cash, with or without par value, and be denominated in any currency.

BVI is one of the few places in the world where bearer shares are still commonly used. Although they have undergone significant changes within the past decade (specifically the BVI Business Companies Act, 2004, as amended) bearer shares still exist. The main requirement for bearer shares is that an “Authorized Custodian” maintain the following on file:

the full name of the beneficial owner of the shares; and
the full name(s) of any other person(s) having an interest in the share(s) or a statement to the effect that no other person has any interest in the share(s).

Corporate Maintenance of BC companies is simple:

Annual meetings are not required to be in the British Virgin Islands, in fact, there is no statutory requirement to hold annual general meetings.
No financial statements, annual return filing, no yearly audits
Only one shareholder is required.
You are permitted to run a BVI as a single directorate.
Corporate Books, minutes and records can be stored anywhere.

Incorporation can take place within one or two days. Shelf companies can be transferred even quicker as needed.

Details of shareholders and directors are not disclosed in a public registry. Furthermore, nominee directors and shareholders are commonplace and can be used to further increase privacy at a slightly higher price, in order to ensure the utmost privacy and protection.

BVI International Business Companies are exempt local taxes and stamp duty, even if they are administered in BVI. Only registration and annual license/franchise fees will apply. Furthermore, unlike other offshore vehicles, the BVI Business Companies Act allows BCs to conduct business and own real estate in the British Virgin Islands.

In addition, BVI has a modern infrastructure and good telecom systems. They also speak English and use a legal system derived from English common law. The BVI Government is quite responsive to the needs of offshore companies and has fostered a pro-business environment. The legislation is flexible, with the goal being to entice legitimate offshore activities, and to keep out money-laundering and other criminal activity.

The British Virgin Islands is a compliant jurisdiction, which has never been blacklisted by the FATF and the OECD. It has started to implement OECD’s automatic exchange of information for tax purposes (AEoI) through the Common Reporting Standard (CRS) in 2017.

The BVI is one of the most popular, oldest, and most reputable offshore jurisdiction, which makes it very simple and easy to bank with a BVI company. Particularly in Asia, a British Virgin Island company is a very popular legal entity.

An adequate economic substance is required for BVI Business Companies conducting relevant activities pursuant to the recently enacted Economic Substance (Companies and Limited Partnerships) Act, 2018.

Relevant activities include:

Banking Business
Insurance Business
Fund Management Business (any activity that requires an investment business license under the Securities and Investment Business Act, 2010)
Finance and Leasing Business
Shipping Business
Pure equity holding business – which will be subject to reduced substance requirements
Intellectual property Business – those carrying out High-risk intellectual property business will be subject to enhanced substance requirements
Distribution and service center business – trading goods with or providing services to foreign affiliates

Economic substance will be mainly assessed according to the following criteria:

the relevant activity is directed and managed in the BVI;
adequate numbers of suitably qualified employees who are physically present in the BVI (whether or not employed by the relevant legal entity or by another entity and whether on temporary or long-term contracts);
adequate expenditures incurred in the BVI;
appropriate physical offices or premises in the BVI; and
where the relevant activity is the intellectual property business and requires the use of specific equipment, the equipment is located in the BVI.

All BVI Business Companies must provide information on an annual basis to enable the International Tax Authority in the BVI to assess whether a business is carrying out relevant activities and, if so, whether it is meeting the economic substance requirements.

Relevant BVI business companies incorporated on or before December 31, 2018, will have until June 30, 2019, to meet substance requirements.

Automatic exchange of information will be made to relevant foreign competent authorities if it is found that an entity is not complying with the economic substance requirements or conducts certain IP business or claims to be tax resident in a jurisdiction outside the BVI.

Failure to comply with substance requirements may lead to a minimum penalty of USD 5,000 and to a maximum penalty of USD 50,000 (High-risk IP) or USD 20,000 (other businesses).

Additional penalties may be applied if a company continues to fail substance requirements from a minimum amount of USD 10,000 to a maximum amount of USD 400,000 (High-risk IP business) or USD 200,000 (other businesses)

BVI BC companies are commonly used vehicles for offshore savings and investments, international corporate banking, forex, and stock trading, international trade, professional services, as well as a holding company, ship and aircraft registration, captive Insurance and estate planning.

No Tax | Investment Fund | International Trading | Holding Company | Asset Securitization | Private Trust Company | Wealth Management

Vanuatu

International Company (Company limited by shares) | Private company limited by shares

Vanuatu is a pure tax haven, there are no direct taxes both for individuals and corporations.

Company law in Vanuatu is based in English Common Law. Companies in Vanuatu are governed by the Companies Act, except International Companies, the most common offshore entity, which is governed by the International Companies Act. This type of company offers more flexibility and easier administration.

Companies registered under the International Companies Act are entitled to do international business and may have restrictions to trade within Vanuatu, own a real estate interest within the territory, except the lease of an office where it conducts its management, and hold banking, trust or insurance licenses.

Offshore companies in Vanuatu are guaranteed to be fully tax-exempt for 20 years, and only subject to an annual fee of USD 300. Companies may elect to be long term entities and pay renewal fees of USD 1,000 (5-year company), USD 1,500 10-year company) and USD 2,500 (20-year company).

The name of the company must include a word or abbreviation that denotes limited liability, such as Ltd., Corp., Inc., S.A., S.R.L., B.V., Sdn Bhd, GmbH, … etc. The name can be in any language.

It can not include any words that refer to financial services, such as trust, bank or insurance, or words that relate to a public institution or words such as Foundation or Charity.

ICs may be formed by one or more shareholders, one or more directors, who may be juristic or natural persons. Directors may be residents or non-residents. Nominee directors and shareholders are commonly used.

Details of beneficiaries, shareholders, directors of a Vanuatu offshore company are not publicly disclosed. There are no annual meeting requirements, and meetings may be held outside Vanuatu by a call, video call or any other mean.

ICs must have a registered office and a local registered agent. Appointment of a secretary is not mandatory, and the secretary may or may not be in Vanuatu.

The issued minimum capital is a share with or without par value. Shares may be issued with or without voting rights, nominative, bearer, preferred and redeemable.

Vanuatu offshore companies may be subject to a solvency test, directors must ensure that any distribution does not affect the company’s capability to meet its liabilities, failure to comply with it may carry directors’ personal liability.

International Companies may be required to keep financial records, but may not be required to file accounts and annual returns.

Vanuatu has implemented the OECD’s automatic exchanges of information (AEOI) through the CRS (Common Reporting Standard).

A Vanuatu international company is commonly used for holding tangible and intangible assets, asset protection and confidentiality, gaming, estate planning, trading, securities dealer, holding vessels, among others.

Companies registered under the Companies Act have no restriction to trade with residents and lease real properties within the territory but may require a license to provide financial services. There are four main types of resident companies: Single Shareholder Private Company, Private Company, Public Company, and Community Company.

Private Companies may be limited by shares or by guarantee. They are restricted to invite the public to subscribe to the shares, shares may not be freely negotiated and transferred, and the numbers of shareholders are limited to 50. A private company must have at least one Vanuatu resident director and one local secretary.

Details of shareholders and directors of resident companies are publicly disclosed.

Private companies limited by shares must hold annual meetings in Vanuatu, file annual returns, and submit audited financial statements if their annual turnover exceeds VUV 20m.

Resident companies are tax exempt but subject to annual registration fees, may be subject to stamp duty on certain transfers and to V.A.T.

Resident companies registered under the Companies Act may be considered exempt. Exempted Companies must file financial accounts and annual returns. They must have a resident director and must hold annual general meetings. But accounts and details of shareholders and directors are not available to the public.

An Exempted company is a commonly used vehicle for holding the bank, trust or insurance licenses, as they must be registered under the Companies Act. Exempted companies may have restrictions to do business with residents.

Banking in Vanuatu is regulated by the Banking Act Cap 63, Reserve Bank of Vanuatu Cap 125 and the International Banking Act. The banking system in Vanuatu consists mainly of a national bank “Reserve Bank”, commercial banks, banks, and the offshore banking sector. Commercial banks are authorized to provide services to non-residents and internationally through a network of correspondents, consultants, and branches. The Reserve Bank is the authority in charge of supervising the operations of banks and financial institutions.

In Vanuatu, there are two types of licenses for the banking sector, the financial institution license, and the banking license.

The main difference is that the financial institution license prevents the provision of the checking accounts service since most other banking services are available. Most offshore banks under the exempt company structure operate under the license of the financial institution.

Under the International Banking Act, a financial institution can be established with a minimum paid-in capital of at least USD 500,000.

Subject to the approval of the Reserve Bank, the capital may be held in a foreign financial institution and may be invested in approved financial instruments. It may not be required to hold a banking license in another reputable jurisdiction.

The Reserve Bank will conduct a due diligence process, to verify that the company has a sound business plan, shareholders and directors have good bona fides and evaluation of facility property, management and capital (source and structure) to assess risk management.

Offshore banks may have restrictions to do banking business locally. Banks must maintain a physical office and keep all accounting and financial records in Vanuatu and must file financial accounts and annual returns, so shell banks are not allowed.

Any bank, whether offshore or not, must present monthly and quarterly data on assets and liabilities, profitability, large loans and deposits, the maturity of assets and liabilities, credit risk between countries, risks of partner organizations and capital investments.

In addition, the Reserve Bank conducts at least once every two years’ banks’ inspections. To verify loans risks and the measures of compliance with the anti-money laundering regulations.

The guidelines established by the Reserve Bank’s Banking Supervision Department for banks and financial institutions in accordance with the Financial Institutions Act and the International Banking Act include:

A minimum capital of USD 500,000 for offshore entities and VUV 200m (≈USD 1.8m) for local entities.
A maximum risk limit on the issuance of loans for a single customer or related clients group, of 25% in relation to exposures to non-banking and non-government counterparties.
Authorization of the Reserve Bank for holdings of more than 25% of its capital in non-financial companies, amounts exceeding that limit are deducted from the capital of a bank. The establishment of a subsidiary requires the authorization of the Reserve Bank, either in Vanuatu or abroad.
Compliance with KYC policies established for the effective management of bank risks and compliance with anti-money laundering and terrorism guidelines in customer due diligence.
Credit risk management and compliance with the minimum requirements of the Reserve Bank for the classification of assets and measures to reduce losses.
Application of liquidity management policies to ensure compliance with its depositors’ demand.
The annual report from the external auditors that the information filled to the Reserve Bank is correct and that the bank operates in accordance with all the rules and requirements
The financial institution must be well-managed and the people in key positions have relevant qualifications and experience in accordance with their responsibilities.

Vanuatu has implemented the OECD’s automatic exchanges of information (AEOI) through the CRS (Common Reporting Standard).

No Tax

SBLC.INFO

Corporation Establishment

UAE

RAK | Ras Al Khaimah

International Company (Company limited by shares)

Dubai (Jebel Ali)

Special Status Non-Resident Company (Company limited by shares)

Abu Dhabi Global Market

Antigua and Barbuda

Anquila

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