Best LEGIT Country to Incorporate to minimise Corporate Tax?

[banafinfodafuggiano]

I am about to sell (once again) a 5 figures Digital assets from my company.
It's basically a chunk of money that will be heavily taxed here in Canada at the end of the Corporate financial year since it's all profit.

I want to move out of Canada ASAP and get these money into the new corporate account of a country with zero or very low corporate Tax.

The country must be a legit country with a good name, not Cyprus, Bulgaria, Romania and so on... those are not accepted by the Escrow
payment system I use to transact large amount of funds with the buyers.

Is there any country that is relatively cheap (less than 5,000 USD) to incorporate a company and open a Business bank account?

Dubai I heard it's now 9% corporate tax and it's not very cheap to open a company and a bank account takes a long time plus you have to fly there.

 

[latindev]

Legit country, incorporation and bank account for less than 5k? If you think 5k is expensive I feel it's better you don't go offshore yet. Also, if you continue living in Canada it doesn't really matter where the company is incorporated, you will still pay taxes there unless you have enough management of the company outside so you can claim you are just a passive shareholder.

First make a list with countries you will be ok living, and from there start calculating where you can optimize the tax part.

 

[bandanna]

You say legit and low corporate tax?

I can think of one country mainly: Estonia.

Just nothing beats that. Zero % corporate tax, easy to get incorporated (it took me 3 days to have a company, vat number, and Wise Business set), but you need to request e-residency, which takes approx 4-5 weeks afaik. The process is fully online, and it’s absolutely impressive of what you can do fully online/remote in Estonia.

As for incorporating and bookkeeping I recommend enty.io but also xolo / companio can do the job.

 

[JohnnyDoe]

Why a Baltoid country should be more legit than Cyprus?

 

[Don]

Why a Baltoid country should be more legit than Cyprus?

From a truly discerning business vantage, the Baltoids nestled between the elite economies of Western Europe and vast Russia, exude an aura of stability and progress, an obvious nod to the refined investor. Cyprus, despite its quaint charm, had that rather unseemly banking hiccup in 2013. Thus, any sophisticated investor might naturally gravitate towards the clearly superior Baltics. But, of course, one's choice always hinges on one's refined tastes.

 

[Sols]

Estonia being marketed as 0% tax is one of the biggest scams in this industry. It's true until it's time to distribute profits. Then you're facing a potential net 25% tax bill. Sure, it might say 20% on distribution but if you read the fine prints, you'll find the 20/80 rule. There are use cases for Estonia, though, of course.

Unless you're comfortable committing tax evasion in Canada, it might be too late to take action if the deal has to go through quickly. You're tax resident in Canada and will continue until you stop being tax resident, which doesn't necessarily happen the moment you get on a plane. Earliest is probably sometime next year. Check your situation: Determining your residency status - Canada.ca

 

[myhand]

Isn't it just to figure out what the corporate tax is in the countries most discussed on offshorecorptalk ?

Let's start here, I don't guarantee for the figures it's quickly out of my head.

Cyprus 12,5% corporate tax
Dubai 9% corporate tax
Switzerland 7,7% corporate tax
Estonia 0% tax but 20% Tax on distribution
Romania Micro company 3% corporate tax
Bulgaria 10% corporate tax
Rep. Georgia corporate tax is 15%
UK corporate tax 19% and 25% exceeding profits £250,000

So make your choice from one of these and also check where your business would fit in the best and the costs of establishment as well as the costs to maintain the company.

 

[banafinfodafuggiano]

You say legit and low corporate tax?

I can think of one country mainly: Estonia.

Just nothing beats that. Zero % corporate tax, easy to get incorporated (it took me 3 days to have a company, vat number, and Wise Business set), but you need to request e-residency, which takes approx 4-5 weeks afaik. The process is fully online, and it’s absolutely impressive of what you can do fully online/remote in Estonia.

As for incorporating and bookkeeping I recommend enty.io but also xolo / companio can do the job.

How is Estonia zero corporate tax?

Why a Baltoid country should be more legit than Cyprus?

Several bank accounts and EMIs frozen with Cyprus banks, the services I offer are paid through a popular online company that does not accept companies in Cyprus. I get paid $50-100K in one go from one client I cannot bank and incorporate in a ridiculous island like Cyprus... My clients are from western countries and see the country of incorporation of my company everytime we close a deal.

Isn't it just to figure out what the corporate tax is in the countries most discussed on offshorecorptalk ?
Dubai 9%

Dubai 9% isn't that only on locally sourced income?

My income is derived 100% from outside the UAE

 

[JohnnyDoe]

Several bank accounts and EMIs frozen with Cyprus banks,

Do you realize that you can open an account in any country, not necessarily where the company is incorporated?

the services I offer are paid through a popular online company that does not accept companies in Cyprus.

Change that “popular online company”? Or use one of the many solutions that you can find in the Mentor Gold group.

I get paid $50-100K in one go from one client

And you are looking for a cheap solution?

ridiculous island like Cyprus...

what’s ridiculous about it?
If you want to laugh at countries, let’s start with the rats roaming the streets of Paris, or the taxes of Italy, or *insert just anything* of Germany.

My clients are from western countries and see the country of incorporation of my company everytime we close a deal.

Same here. Never had any issue with a Cyprus company registered with VIES. Well, in reality I do have some issues when they spell it “Cypress”

 

[Don]

Estonia being marketed as 0% tax is one of the biggest scams in this industry. It's true until it's time to distribute profits. Then you're facing a potential net 25% tax bill. Sure, it might say 20% on distribution but if you read the fine prints, you'll find the 20/80 rule. There are use cases for Estonia, though, of course.

Oh, how utterly pedestrian that Estonia remains an enigma, especially in forums such as this, regrettably overshadowed by the predominant Cypriot legal intelligentsia, leading to an inevitable predisposition in favour of Cyprus. While I too indulge in promoting Cypriot legal expertise, I'm not so one-dimensional as to allow misconceptions to persist unchallenged. In fact, the opposite of what you have said is true. If you read the "fine print", you'll find that it's possible to reduce tax to 0%. It should come as no surprise that these refined intricacies might very well surpass the comprehension of the average mind though.
When it comes to use cases of Estonia and Cyprus, it's worth noting that actually, one of the best use cases is combining both Estonia and Cyprus.
Example: Estonia as an operating company. Cyprus as a holding to exit the company tax-free and rewarding shareholders with low effective tax profit distributions that could result from IP assets structured under the IP box regime.

Alas, for those with a cultivated appreciation for the finer nuances of international tax expertise, it remains a tragically elusive commodity, particularly in those lesser nations. This scarcity is further exacerbated by tedious impositions like DAC6, which, regrettably, dampen the enthusiasm of many a distinguished advisor from openly promoting cross-border structures, given the onerous duty of divulging such strategies to the tax authorities. Such is the lamentable state of affairs for professionals in this domain. Consequently, we are left to seek solace in but a handful of distinguished sanctuaries, like the venerable online forum, OffshoreCorpTalk. Here, one may delicately discourse upon these stratagems whilst judiciously preserving the cloak of anonymity—a luxury in such brutish times.

Estonia's fiscal framework, a detail that connoisseurs would no doubt appreciate, has been the very epitome of stability for over two decades. Indeed, for the past nine years, it has earned the distinction of being the most sought-after OECD jurisdiction from a tax standpoint.

This laudable recognition stems from four notable attributes of its tax regime. To initiate, there's a 20 per cent tariff on distributed corporate profits, while undistributed profits remain tax-free. Subsequently, a commendable flat 20 per cent duty on personal income, notably abstaining from personal dividend proceeds as an example of exemption. As a third highlight, its property levy focuses purely on the intrinsic worth of land, artfully avoiding the pedestrian assessment of tangible assets. Fourthly, it has a territorial tax system that exempts 100 per cent of foreign-taxed profits earned by domestic corporations from domestic taxation.

To conclude, Estonia boasts an impeccable fiscal framework befitting those with a discerning palate. While it does exhibit certain modest imperfections, one can; with a touch of adroit cross-border structuring, transform it into an outstanding instrument for boosting capital growth - Quite the sophisticated endeavour, I dare say.

I am about to sell (once again) a 5 figures Digital assets from my company.
It's basically a chunk of money that will be heavily taxed here in Canada at the end of the Corporate financial year since it's all profit.

I want to move out of Canada ASAP and get these money into the new corporate account of a country with zero or very low corporate Tax.

The country must be a legit country with a good name, not Cyprus, Bulgaria, Romania and so on... those are not accepted by the Escrow
payment system I use to transact large amount of funds with the buyers.

Is there any country that is relatively cheap (less than 5,000 USD) to incorporate a company and open a Business bank account?

Dubai I heard it's now 9% corporate tax and it's not very cheap to open a company and a bank account takes a long time plus you have to fly there.

Perhaps you could move the software rights to an entity in Estonia as a non-monetary capital contribution. It should be feasible with the indicated budget if structured right.
If you later sell the software at the same price as the valuation of the capital contribution, it could be structured with effectively 0% tax on the Estonian level.
Company, banking, etc., - all can be set up remotely.
You should ensure you can get away without paying tax in Canada on such a move though, which at first glance seems a bit complex.

 

[Sols]

Oh, how utterly pedestrian that Estonia remains an enigma, especially in forums such as this, regrettably overshadowed by the predominant Cypriot legal intelligentsia, leading to an inevitable predisposition in favour of Cyprus.

I'm sorry I hurt your feelings and made you so upset with my casual, offhand remark about how Estonia is frequently misunderstood/misrepresented. But I'm glad to see your thesaurus came in handy.

 

[Don]

I'm sorry I hurt your feelings and made you so upset with my casual, offhand remark about how Estonia is frequently misunderstood/misrepresented. But I'm glad to see your thesaurus came in handy.

Thanks for the heartfelt apology! I must admit, your words are as refreshing as a new synonym on a crisp page. Here's to keeping things polite and our vocabularies vast!

 

[Paul Tudor Jones]

Estonia being marketed as 0% tax is one of the biggest scams in this industry. It's true until it's time to distribute profits. Then you're facing a potential net 25% tax bill. Sure, it might say 20% on distribution but if you read the fine prints, you'll find the 20/80 rule. There are use cases for Estonia, though, of course.

100% this and moreover, the 2nd biggest scam in Estonia (or genius marketing, depending on how you look at it) is how what they call "e-Residency" which is not a residency at all

 

[Don]

100% this and moreover, the 2nd biggest scam in Estonia (or genius marketing, depending on how you look at it) is how what they call "e-Residency" which is not a residency at all

Well, just like those e-ladies on screens aren't about to join you for coffee, that little 'e-' in e-Residency should've been the first clue it wasn't a real key to Estonia. Always check the fine print!

 

[blancmon229]

Oh, how utterly pedestrian that Estonia remains an enigma, especially in forums such as this, regrettably overshadowed by the predominant Cypriot legal intelligentsia, leading to an inevitable predisposition in favour of Cyprus. While I too indulge in promoting Cypriot legal expertise, I'm not so one-dimensional as to allow misconceptions to persist unchallenged. In fact, the opposite of what you have said is true. If you read the "fine print", you'll find that it's possible to reduce tax to 0%. It should come as no surprise that these refined intricacies might very well surpass the comprehension of the average mind though.
When it comes to use cases of Estonia and Cyprus, it's worth noting that actually, one of the best use cases is combining both Estonia and Cyprus.
Example: Estonia as an operating company. Cyprus as a holding to exit the company tax-free and rewarding shareholders with low effective tax profit distributions that could result from IP assets structured under the IP box regime.

Alas, for those with a cultivated appreciation for the finer nuances of international tax expertise, it remains a tragically elusive commodity, particularly in those lesser nations. This scarcity is further exacerbated by tedious impositions like DAC6, which, regrettably, dampen the enthusiasm of many a distinguished advisor from openly promoting cross-border structures, given the onerous duty of divulging such strategies to the tax authorities. Such is the lamentable state of affairs for professionals in this domain. Consequently, we are left to seek solace in but a handful of distinguished sanctuaries, like the venerable online forum, OffshoreCorpTalk. Here, one may delicately discourse upon these stratagems whilst judiciously preserving the cloak of anonymity—a luxury in such brutish times.

Estonia's fiscal framework, a detail that connoisseurs would no doubt appreciate, has been the very epitome of stability for over two decades. Indeed, for the past nine years, it has earned the distinction of being the most sought-after OECD jurisdiction from a tax standpoint.

This laudable recognition stems from four notable attributes of its tax regime. To initiate, there's a 20 per cent tariff on distributed corporate profits, while undistributed profits remain tax-free. Subsequently, a commendable flat 20 per cent duty on personal income, notably abstaining from personal dividend proceeds as an example of exemption. As a third highlight, its property levy focuses purely on the intrinsic worth of land, artfully avoiding the pedestrian assessment of tangible assets. Fourthly, it has a territorial tax system that exempts 100 per cent of foreign-taxed profits earned by domestic corporations from domestic taxation.

To conclude, Estonia boasts an impeccable fiscal framework befitting those with a discerning palate. While it does exhibit certain modest imperfections, one can; with a touch of adroit cross-border structuring, transform it into an outstanding instrument for boosting capital growth - Quite the sophisticated endeavour, I dare say.

Weird writing style. Chatgpt and shakespeare in one. THere are way better and simpler jursidictions than Estonia.

Cyprus 12,5% corporate tax
Dubai 9% corporate tax
Switzerland 7,7% corporate tax
Estonia 0% tax but 20% Tax on distribution
Romania Micro company 3% corporate tax
Bulgaria 10% corporate tax
Rep. Georgia corporate tax is 15%
UK corporate tax 19% and 25% exceeding profits £250,000

AFAIK, The simplest to set up and maintain would be Bulgaria. 10% PIT and CT and 5% dividends. CT can even be reduced with deductions to 7.5%.

Cyprus under the non-dom is great. Switzerland is complicated like always and depends on the canton. Estonia like with the e-residency is for the most part a scam.

 

[JohnnyDoe]

100% this and moreover, the 2nd biggest scam in Estonia (or genius marketing, depending on how you look at it) is how what they call "e-Residency" which is not a residency at all

The name they gave to it is a marketing gimmick, it’s just a card for e-signing documents that simplifies filings.

 

[AndyAresa]

CT can even be reduced with deductions to 7.5%.

thanks. do you mind sharing more details? is this available for a limited company in Bulgaria?

 

[Don]

Weird writing style. Chatgpt and shakespeare in one. THere are way better and simpler jursidictions than Estonia.

I am not going to argue with that.
Apparently, Cyprus is the only jurisdiction that deserves special subcategories in the forum. I do like the country a lot, but there are use cases where it's not the most optimal choice and nevertheless recommended.

AFAIK, The simplest to set up and maintain would be Bulgaria. 10% PIT and CT and 5% dividends. CT can even be reduced with deductions to 7.5%.

Cyprus under the non-dom is great. Switzerland is complicated like always and depends on the canton. Estonia like with the e-residency is for the most part a scam.

If you are running your business in Switzerland, from a tax perspective, it's, in fact, better to use an Estonian company with a branch office in Switzerland than a simple Swiss company, as you benefit from getting rid of the WHT tax on dividends + by structuring some operations in Estonia you can shift some profits that will not be taxed if not distributed and can be reinvested tax-free.

How is this a scam?

I don't like either how Estonia markets its e-residency, but I have yet to see another country officially promoting doing business as a non-resident and having a special program for this.
They seem to be focusing on the promotion of running an Estonian company remotely with no substance and only with non-residents in the structure while relocating and establishing residency in Estonia has been completely sidelined.

 

[Sols]

Apparently, Cyprus is the only jurisdiction that deserves special subcategories in the forum.

We're beginning to stray very off topic, but IIRC, that's for historical reasons, back from many, many (10+) years ago in the forum's history. It's not an endorsement of Cyprus being the be-all and end-all jurisdiction.

 

[blancmon229]

thanks. do you mind sharing more details? is this available for a limited company in Bulgaria?

Yes, it applies to EOOD and OOD.
Bulgaria has 10% PIT - 25% (deduction expense) = 7.5% and 5% dividend tax
Ideally the set up is most income should be distributed via dividends and you should take the gross minimal salary of BGN 780 /month. With the Social security cap + pension. Your total costs will be BGN 927/month.

It was discussed here by @JimBeam : Georgia (Tbilisi) a good place to move as a company?

"So this averages at about 6k EUR/year and for that money you get pension and basic (state owned) health insurance. Beyond that you can take everything else as dividends at 5%."

Quite effective and requires less complex planning if you are a EU citizen. Tax residency requirement is 183 days but Bulgaria is very livable and apparently some say it will be Schengen soon. As a EU citizen you just go to the immigration office, and register, and within 3 days they will issue you a prolonged residence permit for 5 years.

If you're not a EU citizen, there are many simple ways to get a residence permit in Bulgaria .