As the business environment gets harsher due to global changes in the global economy and growing competition as well as the mounting scope of regulatory and tax regulations, business persons may come to the pint when they consider potential alternatives. And then the logical question comes into mind - where is the best corporate tax in the world and how such taxation advantages can be used for a particular business.
When answering this question and taking a closer look at possible solutions in various countries we do not take into account typical offshore jurisdictions (such as Seychelles, Panama, Belize, etc.) which offer the possibility to register offshore companies with zero tax rate. Due to a number of various international regulatory changes and regulations, the use of such type of companies became essentially non-feasible thus these companies, even though they offer zero corporate rate taxation, have little or no usage in praxis.
Now, before going to answer what is the current solution for the best corporate tax rate, let’s answer the question on what requirements such company shall fulfill. These are:
- The country where you can register your company with the best corporate rate shall have, apart from tax advantages, the stable economy and clear regulatory system along with multiple double tax treaties agreements being signed.
- It shall be easy to reach the country from various parts of the world and have the secure and developed infrastructure.
- It shall have all what may be required for real business operations in the country - various types of commercial spaces, utilities connections, transportation, personnel, etc.
- It shall have the option to receive residency visas for company owners and work permits for company’s employees.
- You need to have the possibility to have the real business operations in the country – office, personnel, etc. without risking be become tax liable in such country.
When taking a look at various international countries offering advantageous tax treatment and advantageous corporate tax rate such as Cyprus, Switzerland, Hong Kong, UAE and others, the United Arab Emirates can be seen as the best solution providing combination of all the requirements above means the lowest tax rate, number of tax treaties signed with other countries, easy to reach and being highly foreign investor-friendly.
The fully resident UAE companies are free from all taxes except of the VAT of 5% (which applies only to the local market transitions) means such companies clearly offer the best corporate tax rate. The business you can execute over such companies can be local as well as international. As the companies of this type are registered in the UAE free zones in Dubai and other Emirates, these companies can be 100% foreign owned.
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