Countries with no exit tax

[baio12]

It can cost lot to start a company in low tax place like UAE. For new businesses it can be smart to start somewhere else then when it's making money move the company. Unfortunate thing is many countries charge exit tax so you have to pay tax on fair market value of company at the time it is being moved out which can be incredible tax bill.

What countries can it make sense to start the business, run for 1 or 2 year then move to low tax place else without owing any exit tax to original country? Such countries are shrinking but is there list somewhere of which ones remain?

 

[Sols]

The difficulty here is you're asking in the present about a future condition. Exit taxes aren't very common at the moment and not all exit taxes are the same anyway. For example, not all types of assets are subject to it and in some cases there are treaties which depending on where you go to can alter the exit tax.

Right now, most countries don't have exit taxes. In one, two, or more years, who knows?

 

[Marzio]

So don't start a company in those countries, instead form an offshore company and register a PE in those countries so that when it will come time you will move to a lower taxation country without exit tax.

 

[baio12]

Right now, most countries don't have exit taxes.

If you look at corporate tax guides for it looks almost all of them at least in Europe even Malta and Cyprus have exit tax under ATAD.

register a PE in those countries

Register PE is official process? Or just informally establishing PE for tax purpose?

 

[Sols]

If you look at corporate tax guides for it looks almost all of them at least in Europe even Malta and Cyprus have exit tax under ATAD.

True, I didn't consider that angle. IIRC, the exit taxes under ATAD are meant to capture fairly egregious circumstances. It's a form of exit tax that most businesses or people don't run into, but a legitimate concern if you plan to move a assets one day.

 

[baio12]

True, I didn't consider that angle. IIRC, the exit taxes under ATAD are meant to capture fairly egregious circumstances. It's a form of exit tax that most businesses or people don't run into, but a legitimate concern if you plan to move a assets one day.

Starting small company in some country if it earns only $200,000 they may value it at $800,000 you have extreme tax bill to take the company out. No way around it?

 

[Marzio]

Register PE is official process? Or just informally establishing PE for tax purpose?

I don't know what you mean by informally but you are going to register the offshore company in the local business registry, get tax ID and so on.

 

[JimBeam]

Moving companies is no fun. Same as moving to another country for tax purposes.

So pick wisely what works for you and go move right away, settle there and just grow it from that place without the need of moving after some time.