Today, the right choice of jurisdiction is the basis for the development of a successful business with maximum benefit for the company.
Choosing a jurisdiction to host an IT company is, first of all, a detailed assessment of all risks. That is why, in the process of choosing a jurisdiction for an IT business, you should familiarize yourself in detail with all the “pitfalls” of a particular country. The wrong choice of jurisdiction for international business can lead not only to the loss of resources and time, but also to the loss of valuable counterparties, the failure of contracts and the addition of taxes.
When choosing a jurisdiction, you should pay attention to the following factors:
The cost of registering a company;
Possibility and cost of opening a current account;
The cost of maintaining the company;
The prestige of the jurisdiction for counterparties;
Stable political situation;
TOP of the best jurisdictions for IT business development
Some of the best jurisdictions for locating IT companies are:
The Netherlands is one of the most respectable hubs for starting an IT business. Although they have a very high corporate tax of 25% per annum (with an annual profit above 200 thousand EUR). For IT companies, there is also the Innovation Box taxation regime with a 5% income tax rate. As a result, the Netherlands is one of the best jurisdictions for IT business development. At the moment, there are no strict requirements for the presence of substance in the country, and opening accounts will not be any particular problem.
The term for registering a legal entity in the Netherlands is up to 14 days.
The cost of registering a company is from 1700 EUR.
The tax regime in America depends on the specific state. The most comfortable place to locate IT companies is the state of Delaware. In this state, the company's income tax is only 8.7%, and if you do not operate in the state, then there is an opportunity to reduce the tax burden to 0%. Companies are also required to pay a "franchise" tax of $175. In case of delay in payment, interest is charged at 1.5% per month. In the event that the founder of the company is a non-resident alien who does not operate in the United States, the company is exempt from federal taxes. Comfortable legislation for attracting investments.
The term for registering a legal entity in the United States (C-corp) is from 4 to 6 days.
The cost of registering a company in the USA starts from 1000 USD.
The UK is a classic jurisdiction, both for creating IT companies and for resolving any disputes in the field of Hi-Tech. Many people are attracted by the very low price of setting up a company in the UK, but a beneficiary from Ukraine cannot open an account in the country. To do this, there are a number of payment systems that can easily help open the necessary accounts. Comfortable legislation for attracting investments. The corporate tax rate for LLCs is 19%.
The term for registering a legal entity in the UK is 1-3 days
The cost of registering a company in the UK is from 700 EUR.
Income tax from companies in Estonia is 0%. In the case of distribution of profits among members of the board in the form of dividends, the tax is 20%. Recently, there have been problems with opening accounts for IT companies.
The term for registering a legal entity in Estonia is up to 1 month.
The cost of registering a company is from 1800 USD.
Income tax in Cyprus is 12.5% per annum. There is an IP-Box regime that can lower the rate on IP income in Cyprus to 2.5%. In order to open an account in Cyprus, you need to create a substance (local director, employee or office). Comfortable legislation for attracting investments.
The term for registering a legal entity in Cyprus is 14 days;
The cost of registering a company in Cyprus is from 1500 EUR.
Hungary is the EU country with the lowest cooperative tax - 9%. There are also no strict requirements for substance. Banks also quickly open all the necessary accounts.
The term for registering a legal entity in Hungary is 6-10 days;
The cost of registering a company in Hungary is from 1,200 EUR.
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