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Posts Tagged ‘Business Base’

Montenegro – a Tax Haven in Europe

May 4, 2016 Comments off

Montenegro, known as ‘The Jewel of the Adriatic’ has become one of the most friendly places for business in Europe. It is now a decade ago since the semi-autonomous region of Montenegro, declared its independence and went on to become a sovereign state.

Old Town Budva in Montenegro

Much of Montenegro’s allure comes from its shining mix of colors: aquamarine waters, green pine-forested mountains, blazing blue skies and white pebble beaches.

Montenegro was featured in the glamorous James Bond film “Casino Royale.”

 

Sveti Stefan near the town of Budva in Montenegro. Image courtesy of Travel the World, Wiki Commons.

Porto Montenegro – sometimes called the Monte Carlo of the Adriatic – has upgraded this tiny Balkan state from a favorite destination of average Russian and Serbian tourists to a mecca for some of the world’s wealthiest people.

However, Montenegro has also attracted a lot of attention for another reason: it is one of the easiest places to do business in Europe. Starting a company in Montenegro takes an average of about a week and requires no paid-up capital. To form a Montenegro corporation, you must follow six procedures, most of which are simple. The only documents you have to submit to the government are the articles of incorporation, corporate statutes, and list of directors.

There is no such thing as anonymous ownership of a company in Montenegro, as you have to disclose your name, any former names, and your citizenship. However, if you’re looking for a solid company to do regional business, Montenegro is hard to beat. Being a director of company could even qualify you for Montenegrin residency with a little bit of cash.

There are several other steps to form a company here, but the total cost to be paid locally in Montenegro is about USD 100.

Montenegro offers global entrepreneurs a low-tax haven where they can pay a little tax and gain access to a network of treaties.

While countries like Monaco have become less attractive as holding vehicles for patents or royalties, a Montenegrin corporation is suitable for a number of business activities.

In addition, Montenegro has some of the lowest tax rates in Europe and even the world. Corporate taxes in Montenegro are a flat 9%. While royalties and capital gains are also subject to the 9% rate, there are no surtaxes or minimum taxes for companies doing business in Montenegro. There are also no stamp duties, although real property is subject to a 3% tax payable by the buyer at transfer.

Resident individuals in the country pay a maximum 15% tax on salary earnings (9% to about $1,000 per month, 15% on the balance).

Montenegro also offers relief from taxes on foreign source income under an extensive network of tax treaties, although the United Kingdom and most countries in Europe dominate the list, along with China, Korea, India, and Malaysia, and some African countries. The United States, Canada, and Australia are not on the list.

Montenegro Airlines flies to the capital of Podgorica and to the Adriatic Sea airport of Tivat from European cities including Paris, Rome, Budapest, Zurich, Moscow, Frankfurt, Istanbul and Ljubljana. JAT Airways, the Serbian national airline, flies to Belgrade from most European capitals, and has several flights a day from Belgrade to Podgorica and Tivat. A return ticket for a 45-minute flight from Belgrade costs USD 125.

Contact us if you want to set up a Montenegro company.

taxmoneyhavens.com

 

 

Macau Offshore Haven

September 24, 2015 Comments off

Macau is a former Portuguese colony and was administered by Portugal from the mid-16th century until late 1999 when it was ceded to China. Macau became the second Special Administrative Region after Hong Kong.

Macau by night

In 2002, the government of Macau enacted a law from 2001 which legalized gambling, and offline casinos opened up. Macau’s Internet gambling sector was regulated in 2003.

Today, Macau is the gambling center of Asia. Its offshore financial sector is growing but still is nowhere near the size of Hong Kong.

 

Macau by night courtesy of Inamoka, Wiki Commons.

 

Macau Incorporation

Macau has many different types of corporate structures available, allowing for a wide range of liability.

  • Unlimited Liability Company (S.N.C.)
  • Mixed Liability Company by Quotas (S.C.)
  • Mixed Liability Company by Shares (S.C.A.)
  • Limited Liability Company by Quotas (L.D.A.)
  • Limited Liability Company by Shares (S.A.)
  • Limited Liability Company by Sole Owner (S.U.L.)

Macau companies are exempt from tax on the first 200,000 MOP (Macau pataca), or roughly $25,000 USD, and the next 100,000 MOP is taxed at 9%. Remaining income is taxed at 12%.

Unlike Hong Kong, there’s no territorial taxation system in Macau. Worldwide income may be subject to tax. However, under the Offshore Regime of Macau, companies can be fully tax exempt if they do not operate in MOP currency, do not target Macanese persons, and do not focus on other Macanese companies.

Unlike Hong Kong, where you pay tax depending on the source of income, Macau has taken a different approach of either full tax exemption or full tax liability.

There is no sales tax (VAT) in Macau.

The Offshore Regime creates two types of offshore operations: Offshore Commercial Service Companies and Offshore Auxiliary Services Companies. Both are designated International Business Companies (IBC), but are significantly different from the IBC legislation of Belize, Seychelles, and so on.

The differences between Offshore Commercial Service Companies and Offshore Auxiliary Services Companies lie within their scope of operations. While auxiliary services companies can only perform duties for holding or parent companies, commercial service companies are free to conduct business with anyone. Auxiliary companies pay a lower annual fee—between 4,000 and 10,000 MOP less per year.

All companies in Macau—even those registered under the Offshore Regime—must prepare and file financials. The costs of forming a regular or offshore company in Macau are higher than in Hong Kong, but not by much.

Residents are liable for income tax on salary from employment with Macanese companies or salaries paid into Macau, which means that if you work remotely for a foreign company, you pay no tax. This can be used to live and work tax-free in Macau.

There is no capital gains tax, capital duty, capital acquisitions tax, inheritance tax, wealth, or sales tax.

taxmoneyhavens.com

Curaçao a Tax Haven for Internet Based Business

April 22, 2015 Comments off

The financial services industry on Curaçao was started by the Dutch during the 1940’s when Dutch corporations moved their assets to the region to escape the Nazis.

Curacao

 

After the war many of the companies returned their head quarter back to the Netherlands but left behind the infrastructure of an offshore center.

The infrastructure includes 70 banks, more than 50 of them international, as well as asset management, trust and insurance companies. The worlds major international audit  and law firms are also established on the island.

 

Picture of Curaçao courtesy of Wiki Commons

The Caribbean island of Curaçao realized that competition for business is stiff. So they had to keep the tax rate extremely low and attractive and add value to business. Being a tax free jurisdiction almost guarantees that you’ll end up on some OECD or IRS blacklist.

So the tax rate on corporate profits was set to 2% only, something that wouldn’t qualify them as a tax haven, but would be low enough to attract entrepreneurs. In addition, Curaçao also looked at ways it could actually provide value to 21st century businesses.

The Internet businesses they hoped to attract all need bandwidth. So Curaçao invested in fiber to the point that its data centers now have among the fastest, most highly connected data centers in the region.

So instead of just being a Curaçao company in name only, businesses can actually host their servers here as well. This helps any Internet business justify why the company is based in Curaçao.

Advantages of being based in Curaçao:
– Not being listed as a tax haven.
– Offering robust local services incl. state of the art internet which support the business.
– International financial center
– A blend of European and Caribbean Culture

The Kingdom of the Netherlands is a member of the European Union. However, Curaçao, Aruba and Sint Maarten all have the status of Dutch overseas countries and territories and are not part of the EU.

taxmoneyhavens.com

Tax Haven Zone in Armenia Launched

February 26, 2015 Comments off

Armenia launched last year, the first-ever tax-free business zone which is meant to mainly cater to high-tech manufacturing companies.

Armenia Map

The tax-free zone covering around 10 hectares (25 acres) of land and office space is designed for companies specializing in information technology, engineering, telecommunications, renewable energy and pharmaceuticals.

Companies based in the zone will be exempt from profit, value-added and property taxes as well as import duties.

Regional Map with Armenia courtesy of Wiki Commons

 

taxmoneyhavens.com

0% Corporate Tax in the European Union? Yes. in Estonia.

November 25, 2014 Comments off

The Baltic nation plan to build itself as an e-nation, effectively allowing anyone to become a digital citizen and living his digital life within its networks.

Tallin

The country aims to have 5,000 e-residents by 2020. Additional lure is the possibility to get 0% corporate income tax in the European Union. Estonia does not have the reputation of a tax haven which gives companies an additional reason to move businesses to Estonia, an added value is the fact that Estonia is not only a EU and Euro zone member, but also one of the Baltic countries. So you have both legal security and political support of Baltic countries.

Estonia will issue identity cards allowing access to its digital services to people residing outside the Baltic nation as it seeks to boost foreign investment. Lawmakers in the capital Tallinn voted unanimously with no abstentions to let foreigners seek e-residence status to be able to set up a company in Estonia or sign legal documents from anywhere in the world, according to a live broadcast. The law goes into effect on Dec. 1.

Estonia emerge as a global digital leader.

Tallin, Estonia old and new. Picture courtesy of Wiki Commons.

 

Corporate Income tax

Estonia applies a unique and favorable approach on taxation of corporate profits. Resident companies and permanent establishments of the foreign entities (including branches) are subject to 21% income tax only in respect of all distributions (both actual and deemed), including:

  • dividends and other profit distributions;
  • fringe benefits;
  • gifts, donations and representation expenses;
  • and expenses and payments not related to business.

Profit retained in the company is taxed at 0%.

As of January 1, 2009 dividends paid to non-residents are no longer subject to withholding tax at the general rate of 21%, irrespective of participation in the share capital of the distributing Estonian company.

Estonia does not impose any estate taxes. Local governments have the authority to impose local taxes, but effectively only few municipalities have introduced these.

 

Tax Treaties

Estonia has effective tax treaties with 51 countries. Under the double tax treaties a significant reduction of withholding taxes on various payments to non-residents is available.

 

Considerations for the investor

  • Main principles of Estonian tax policy: simple tax system, broad tax base and low rates.
  • The aim of the current Estonian tax policy is to shift the tax burden from labour to consumption.
  • Flat income tax rate since 1994 (flat income tax rate at 21% applies to both individuals and companies).
  • Unique corporate tax system since 2000: all undistributed corporate profits are tax-exempt. (0%)
  • Individuals can have investment account to benefit from 0% corporate income tax.
  • Local taxes play an insignificant role in the Estonian tax system.
  • Electronic tax administration is well established. Business taxpayers can file, view and correct their tax returns online using the eTaxBoard (eMaksuamet). They can also use it to view their tax account balances and VAT returns, and submit VAT refund applications.
  • Vast majority (92% – 2010) of yearly personal income tax declarations are submitted electronically.
  • The standard VAT rate is 20% from 1 July 2009 and the reduced rate is 9%.

taxmoneyhavens.com

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