Entrepreneurs often limit themselves to their state for business development, while others are looking for access to the foreign market. Few people are looking for options to start entrepreneurship in other countries, but in many ways this approach can be more profitable, although there are a lot of risks. Just for those who are interested in this, we have prepared a rating of countries for opening a company, describing the main difficulties and advantages of this venture.
Factors to consider when choosing a country for business
It will be useful for entrepreneurs who are ready to start a business in another country to know the specifics of this process. This will help you understand how to choose the state in which business activities will unfold. Let’s analyze the factors that influence the choice of a country.
Tax consequences and contracts
Some countries are loyal to private business and support it, expressing this in the established taxes. You should immediately find out how much contributions to the budget and other organizations you and your partners will have to pay if you open a business in another country. First of all, carefully study the information about:
- the relation of tax legislation to investments from outside;
- benefits for return on investment;
- income tax liabilities;
- capital build-up obligations.
After analyzing this information in several suitable states, it remains to choose where conditions are better.
It is very difficult and long to develop and scale your business steadily without sufficient investments. Many companies exist not only on revenue, but also attract third-party partners who are ready to invest their own funds in development. Regarding this issue, study the legal documents of the countries.
Investors are expected to try to secure their investments, so they will choose the conditions that will be more profitable for them. They may prefer to register a company in a third country, which will provide more acceptable and understandable tax benefits. What matters is which country the founder of the company is a resident of.
Execution of documentation
Documentationif a “paper” issue often becomes a stumbling block in the process of registering a company in a foreign country. Different countries have their own tax and administrative reporting intervals, as well as other requirements for business processes. This applies to the documents themselves, which must be provided in case of registration of the company in another country.
Some countries are sensitive to their economy and are strict about the citizenship of candidates for starting a business. Other states quite calmly allow residents of foreign powers to have their own company. This is worth bearing in mind when considering the idea of starting a business abroad. Find out how quickly you can get a resident status, and whether it is possible in practice.
If an opening company requires a staff of employees, then take into account the conditions of their employment on the spot. Make sure that some will be able to move abroad after the new company at least for the first time to ensure a decent start and explain to local colleagues the specifics of doing business.
Consider the terms of employment of local, average salaries, labor guarantees. It may turn out that it is much more profitable to transport already proven employees to a new place than to train new ones on the spot. On the part of the regulation of labor relations, there may also be specific features that should be known and taken into account in advance.
Corporate governance requirements may change from one State to another. Compliance with certain requirements is mandatory, so even foreign companies must comply with them. Such variables will also need to be taken into account when making a final decision regarding the country to open a business.
Mergers and acquisitions
If the business is developing actively and successfully enough, sooner or later there comes a time when the company can be profitably sold, reorganized, merged or issued shares on the stock exchange. To achieve these goals, you will first have to go through certain procedures of acquisitions and mergers.
In some states, all these processes are clearly structured, have a transparent and direct algorithm. In this case, the start of the procedure, its conduct and completion will not cause difficulties. In other states where corporate legislation is not so developed, similar processes can take a long time, require the involvement of local specialists, cause delays, complications and give ambiguous results.
Rating of countries to open a company
Having understood the nuances, it is worth determining the initial list of those that best fit the description. We have identified 10 foreign countries that, for one reason or another, can become an excellent platform for registering your business.
Sweden’s free and limited market forces entrepreneurs to think globally at once. The education system in the country is well integrated, because the personnel here are not only highly educated, but they know their worth and are not deprived of talent. Sweden provides enough advantages for business:
- reliable banking system;
- developed infrastructure;
- social entrepreneurship support programs;
- active investments in biotechnology and food industry;
- the government is developing the markets of other countries.
It is important that tax rates in Sweden are not the lowest, and by registering their company in the country, entrepreneurs take on high risks.
An extremely strong economy in Norway and opening a business there means ensuring your reliability from the legislative side. No less attractive is the fact that the bulk of all processes related to registration and business management are automated. In fact, communication with the state takes place in a remote format. Other advantages include:
- optimal for remote business format;
- state support of technological projects;
- qualified employees in IT, finance, design;
- access to investments;
- established trade relations with the European Union;
- developed transport and communication infrastructure;
- effective system of bankruptcy registration.
Despite the huge number of obvious positive aspects. there are also pitfalls in Norwegian business. The country has fairly strict labor legislation, which is more than compensated by the level of training.
One of the few powers that is extremely popular among businessmen, because you can register a company here quickly and relatively inexpensively. The level of entrepreneurial optimism in the UK is really very high and in addition there are several more advantages for an entrepreneur:
- the establishment of a company takes several days;
- there is no prosecution for unprofitable activities;
- tax benefits for investors, founders, employees;
- multinational, qualified, experienced personnel;
- reliable economy;
- low corporate rates.
After leaving the European Union, the UK lost a little of its authority in the business environment. However, the government pays a lot of attention to supporting the economy, takes various measures to regain its former position in the global business arena.
Many entrepreneurs dream of starting their own business in the USA, because the country’s GDP is one of the highest in the world. The entrepreneurial infrastructure of the states can be safely called the most leading in the whole world. But in addition, there are many advantages for interested businessmen in the country:
- huge variety of the market;
- high level of investment support;
- developed business culture;
- strong economic traditions;
- educated and qualified personnel;
- diversity of local legislation;
- low functional costs.
Nevertheless, the conditions for registering your business vary greatly from state to state, which can affect both positively and negatively. It is also not very profitable to start lawsuits in America, since the processes can drag on for many months. Against the background of advantages, do not forget about the disadvantages and choose the state that is more suitable according to the legislation.
South Korea has been experiencing steady economic growth for many years, and investment flows are pouring into the country, investors are especially willing to invest in innovative projects. In addition to active investments and a keen interest in business in South Korea, there are still advantages for the development of your company:
- simplified taxation system;
- qualified personnel;
- powerful innovation base;
- experience in the field of development;
- strict control over the fulfillment of business obligations;
- one of the fastest internets in the world.
It is in Korea that the largest corporations, such as Samsung and LG, are based, and the headquarters of many successful innovative projects are located.
If you have a dream to start your own business in Europe, then Denmark is the best fit. In addition to the fact that the country is a member of the European Union, it has several other advantages for business registration:
- a few days to register a company;
- the citizenship of the management does not matter;
- there are no notarial actions;
- legislation is focused on modern business conditions;
- borders are open for export;
- the special attention of the State is aimed at ensuring legal protection;
- the presence of the “flexicurity” system, which provides flexible rules for hiring employees.
The conditions available in the state for registration and business development will certainly be attractive to both small and large companies. Many business processes, also related to the registration of new entrepreneurs, hiring of employees and other things in the country are digitized. That is why it will take only one day to organize a new company here, and it will cost about $ 100.
A very developed state of the UAE looks attractive for starting a business. It is advantageous to register a mining company because the region is rich in resources. Trade relations in the Emirates also attract entrepreneurs, and for what reasons:
- no quotas;
- no currency control;
- no tax on personal, capital and corporate income;
- 100% profit repatriation;
- support for starting your own business;
- entrepreneurship promotion;
- resident visas;
- developed infrastructure and communications;
- duty-free import of goods;
- resources for investment.
Opening a business in the Emirates involves 100% foreign ownership. The value added tax in the country is one of the lowest – only 5%. By registering a company on the territory of this eastern state, an entrepreneur gets opportunities for development.
Hong Kong, China
The developed financial infrastructure quickly made Hong Kong one of the most attractive in terms of business registration. There are acceptable conditions for small and large entrepreneurs. The advantages include:
- fast registration of property rights;
- many experienced lawyers;
- low tax rates;
- no import tariffs (there are exceptions);
- trust of the World Bank.
Many people seek to open a business in Hong Kong, most often it is an LLC. To do this, the company must have at least 1 director, no more than 50 shareholders, the opening is available without a visit, the secretary, employees and the legal address of the company must be local.
There are many headquarters of large corporations and small companies in Singapore. This is due to a loyal business policy, it is not for nothing that Singapore is considered a global financial center. The city has powerful trade and investment opportunities, it attracts large entrepreneurs and industry leaders. Singapore is considered the best for doing business for several reasons:
- political stability;
- one of the richest countries;
- comfortable geographical location;
- dividends and capital gains are tax-free;
- trained personnel;
- free trade agreements with other countries.
The government provides substantial support to small businesses, and investors are actively interested in business development here.
The country of green meadows and happy cows is famous not only for its fabulous landscapes. New Zealand is favorable for starting a company. The country offers advantages:
- trained personnel;
- quick company registration;
- affordable salary;
- grant financing from the state (for some types of business);
- low interest rates;
- no social security tax, capital gains, salary;
- transparent access to statistics and documentation;
- creating an LLC (LLC) form as a separate legal entity.
All these advantages could not be overlooked, so there are already quite a lot of entrepreneurs and startups from Russia in New Zealand today. Thus, you have familiarized yourself with our rating of countries for opening a company and, based on this information, choose the option that suits you best.