If you’re a lifelong netizen, have portable skills, judge your success by the freedom to engage in what makes you happy, be who you are, and see the world, you’re likely to become a digital nomad. So you must have already tried to find answers to questions like: Which countries allow foreigners to start a business? Which country has the most business opportunities? Which country is the easiest to start a business in? Who can advise me on which country is best for startups in my area of expertise? Who can guide me in my entrepreneurial mission? You are not alone in your search. Therefore, we address your questions in this article.
To tell you for sure which country is best for setting up small businesses, dozens of jurisdictions must be compared from such aspects as: the current and upcoming issues in taxation, asset protection, business registration issues, the level of corruption and other important issues to plan the right business strategy.
On the one hand, there are worldwide and regional assessments of countries according to the ease of doing business. However, they do not provide any step-by-step guidance on how to register a business in a particular jurisdiction, how to take advantage of the local incentives available to foreign entrepreneurs, and how to recognize barriers and avoid disappointments before you investing too much to start your business in a country that is not suitable for or does not welcome your type of business. So what you need is a case-by-case review of the possible options on today’s world map.
In this article, let us share our exercise in comparing 10 popular business destinations in 2022. This food for thought will help you decide which country is best for startups in general and your small business formation in particular, so you can choose where to register a new business and picture your business prospects.
Recently we have written about Marshall Islands, Belize, Serbia, UAE, Turkey. The review of 10 jurisdictions hereby focuses on the countries that will gain popularity in 2022. If you need more specific answers to your specific questions and concerns about offshore destinations or other aspects, please feel free to book a free online session with one of our experts and/or order our professional assistance in your company formation at any of the most popular business destinations. We offer customized services at very competitive package prices.
What does it mean to ‘register’ a company abroad?
Registering a company/business means getting official confirmation that your new economic entity is legally recognized as valid in a particular country and can operate with or without the permits and licenses required by the authorities.
Whether you register a Limited Liability Company (LLC), corporation, subsidiary or any other business structure permitted in the country of incorporation, it will enjoy certain rights, obligations and many benefits provided by law.
In addition to day-to-day operations and activities, a company can perform the following functions:
- initiate legal action
- protect the shareholder’s personal property from seizure in the event of a lawsuit
- acquire assets and real estate
- operates regardless of where its shareholders are geographically.
Also, if you register your business in any country abroad as an LLC or corporation, you will not be liable for all of its possible losses, debts or failure. Your liability will be limited only by the amount of your share of the capital invested in this company.
However, there are country-specific nuances that you should consider when researching which country has the most business opportunities and which country is best for small businesses.
Things to consider when choosing the best country to register your small business in
Your vision of which country is best for startups will depend on your awareness of some key aspects. Let’s consider the most important of them.
OFFSHORE COMPANY FREE EXPERT CONSULTATION
on which jurisdiction is best for
your business, preferred tax system,
corporate structure.
Tax consequences and contracts
One of the most important things that can really affect your foreign company’s revenue, investors’ profits and employees’ wages is the amount of costs and expenses, including the taxes.
Tax planning deserves your attention from the early steps you take to register your business in a particular country. Therefore, you should assess the following problems in good time:
- investors’ and founders’ tax deductions/exemptions in the country of incorporation as well as the jurisdictions where your company is likely to operate in the future
- the income tax obligations that your business will face after you register it
- the capital gains taxation rules
- the possible impact of local tax laws on the ability to attract potential investors to your business venture in the future.
Stakeholder considerations
The main reasons for choosing a foreign country to register and develop your business may depend on the opinions of different stakeholders.
Many founders register a new company in another country because of the tax incentives.
The shareholders’ opinion on how the company should be formed and run can also be important and must be taken into account.
In addition, the company’s management structure often depends on the rules and laws that are maintained in the country of incorporation.
Even the citizenship of the business owners often makes a difference.
In fact, there is no single answer to the question of which country is best for small businesses. Therefore, our experts have to put together a puzzle of various facts and details about your particular situation, in order to give you good recommendations.
Let’s see if it is possible to define which country is the easiest to start a business in, i.e. where the rules and procedures are the simplest.
Paperwork
The rules for filing documents to register an offshore company can be quite challenging. Do you have to submit the papers in person? How can you do this remotely? What are the language and certification requirements? Also, consider the format and standard timelines for your company’s tax and administrative reports in the future.
Visa/residence issues
When choosing a jurisdiction to register a business, you should research which countries allow foreigners to start a business. In some regions and countries there may be citizenship requirements for business founders, while in other countries there are no such restrictions. This is something to keep in mind, especially if you need to open a company as soon as possible, while you do not have the right type of visa or residency status, or your citizenship makes it difficult to obtain them.
HR options
If you need to move your most valuable staff after you’ve registered a business, it can be difficult to do so quickly, especially if you’re not sure how long you want to rely on them. Recruiting the local staff can also be a problem due to the lack of professionals with the right skills and language skills, the costs of hiring and retraining staff for your project, the cultural differences that take time and extra effort to resolve.
It would be too late to start thinking about HR issues after you have registered a company in another country. In addition, you may face some legal restrictions on how you can hire and fire employees, promote or demote employees, and your obligations may prove too challenging.
Therefore, you need to discuss with our experts your HR needs and policies even at the time of choosing the country of registration and preparing the company structure.
Management issues and operational arrangements
Corporate governance requirements and aspects are also country specific. Do you need a brick and mortar office? Can you sell your products on the domestic market? Where do you find suppliers? Before choosing which country has the most business opportunities and registering your company, you should understand what can make a difference to your success both in the short and long term.
Mergers and acquisitions
One day, with a successful development of your business, you may decide to sell or merge your business on very favorable terms according to the rules established in the chosen country. In some places, these procedures are more transparent and straightforward than others, and any entrepreneur can easily understand, start and complete them. However, in countries with less developed corporate law, such processes can be confusing, so it would be challenging to sort things out without extra cost and effort.
10 countries to register a company in: food for thought in 2022
After recommending all the key aspects of choosing a country to register your business in, let’s share our experts’ shortlist of the promising business destinations in 2022 and their strengths. Our selection for this article is based on our experts’ current insights and recent experience advising our clients.
Please note: our list is not numbered, as the final decision on which country is best for startups must be made by you, taking into account your specific circumstances and wishes.
NEVIS — a good choice for asset protection
Nevis has become one of the most popular places on the globe to register a business.
Nevis has gone far ahead of Europe in terms of asset protection and diversification, so it is often recommended as a country to register a business in. If you need to secure your international assets protection from claims by foreign authorities or legal proceedings abroad, you should consider Nevis.
Other advantages of Nevis as a place to register your business are:
- data protection, very strong confidentiality of business and financial information, no requirement to submit personal information of top managers and owners with the public register
- Nevis is not on the OECD and FATF blacklists or graylists, so your business can benefit from this country’s good reputation
- the fast procedure for company registration.
- no personal income tax
- minimum requirements for start-up capital and very reasonable costs for company formation.
- exemption from corporation tax for non-resident companies
- you can register a combination of a Nevis offshore trust and LLC.
- foreign investors can get Nevis citizenship and pass on very good terms.
Apart from the above advantages, you should also discuss the only possible concern: companies registered in Nevis have not yet achieved international recognition and unconditional trust. However, your company’s reputation and credibility will depend on your business strategies and openness with your shareholders.
You will soon see and agree for yourself that there is every reason to call Nevis one of the best countries to register and open a business in.
CANADA — the right place for companies focused on innovation engineering
Canada, like Europe, is a very good place to start an innovative business. This country is a business acceleration center and is set to become a world-leading hub for innovations. The basis for this ambition is the Innovation and Skills Plan, which was adopted in 2017. Furthermore, if you register your business in Canada, you will have access to the first-class engineering expertise. New generations of technical talent are provided by professional higher education. The government supports universities and encourages research and innovation.
Companies registered in Canada have the following benefits:
- Canada as a center for quality and high-tech products
- tax deduction that can be used for research and development of new products on the premises of newly registered companies
- a unique business and investment environment enhanced by the proximity of the United States, the government support and the developed infrastructure – available to all companies registered in Canada
- the country’s huge highly skilled labor market, which, together with the developed immigration legislation, makes it possible to involve professionals from Canada as well as from any other country and to do so on very attractive relocation terms
- the convenient geostrategic location allows trading of physical goods in the markets of Asia, the EU and North America;
- relatively low cost of business services and cost of living in the country.
SINGAPORE – a country in Asia that provides impressive tax incentives for foreigners to register their business
For years, Singapore has remained a popular destination for our clients, where we offer to register business entities with a focus on markets in Asia.
The country has repeatedly been rated as Asia’s most competitive country in which to form and conduct business. The strong trade and investment opportunities attract global entrepreneurs and business leaders to this cutting-edge business hub.
It is for many reasons that many large international companies locate their headquarters in Singapore. Here are some of its strengths:
- it is one of the richest countries in the world
- it is a politically stable country
- it is a convenient geographical location to develop business in Asia
- it has created a competitive market with highly qualified professionals
- it is tax-free for dividends and capital gains
- there are serious tax preferences for registered resident companies.
For free advice on your possible choice of Singapore as a country to register a company in, please request a free online consultation.
United States — let your new business discover tax incentives and gain access to a huge market
The US is a good place to start a business, especially if it is focused on IT products and services. Everyone knows that Silicon Valley is located in California, and some other states have become hubs for innovation-driven companies. Let us mention just a few reasons for this success:
- opportunity to employ a diverse and skilled workforce
- international cooperation and advanced positions in research, development and innovation in many areas
- a wide range of financing sources for companies and individual companies: investment funds, banks, venture accelerators, business angels
- fairly easy procedures for business registration.
Please note that each state has its own specifics, so the rules and laws must be clarified for each state in particular.
Procedures and requirements may also differ for resident and non-resident entrepreneurs. For example, residents may only register a business in the state where they reside. Non-residents will need to analyze all options and seek professional advice.
For example, we can recommend the state of Delaware as the place to register your business due to benign tax conditions and a consistent legal system. You can even call it an offshore zone. Over half a million entrepreneurs incorporated businesses in Delaware, including more than 50% of all U.S. public companies in 2019 and 60% of companies listed in the Fortune 500 rankings.
The main advantages of Delaware for new business owners are as follows:
- the initial incorporation fee is very small compared to other states
- several significant tax incentives for LLCs, including corporate tax payable only on profits generated in the US, i.e. all profits received from other countries, including Europe, are exempt from tax
- business licenses are not required
- foreigners do not pay income tax
- non-residents may be shareholders, members, directors or officers of Delaware corporations
- the fee for preparing and filing documents with the IRS is lower than the average amounts charged for similar services in other states
- the rules and requirements for doing business in Delaware are minimal and unsophisticated
- The Court of Chancery is specifically focused on dealing with claims against businesses.
We can also recommend Wyoming to you as a very favorable US state for company formation.
Regarding the disadvantages of the US business registration, consider the following questions:
- Not all states have low taxes. For example, a cumulative corporate rate in Silicon Valley is charged at 29.85%, of which 21% is the federal corporate income tax. The good news is that it takes a business to grow to make a profit. However, once your profits are in sight, it is a good time to attract investors and reorganize the company or business project as a whole, which involves moving to a state or country with a lower tax burden. So tax predictions should be done as soon as you start your test trading operations in the states;
- Sometimes it is quite difficult to know whether foreign income is taxable or not. So you need to consult professionals.
Do you need advice on opening a business in the US or Europe in 2022? We will be happy to offer you our professional services and share our tailored recommendations. Just send us your request to the email address kgn@kgn.dk , and we promise to give our quick feedback.
UNITED KINGDOM — a hub for very fast growing and efficient companies
If you need detailed information on how to register a company in the UK or Europe, we can tell you quickly and easily. In fact, this solution is one of the winning strategies many of our customers have chosen.
The benefits of opening a business in the UK include the following strengths:
- it is possible to open a company in UK within 1 hour and the fee is GBP20
- the UK tax authorities understand that new businesses usually do not make a profit in the first years of operation, so there is no penalty for unprofitable business operations here
- the UK government offers various tax incentives to investors, founders and employees as well as foreign entities
- some of the best places to start a business and register a business in the UK are Belfast, Durham, Derby, Stoke and Stirling.
BRITISH VIRGIN ISLANDS – easy banking as an incentive to register a BVI business
The British Virgin Islands (BVI) is the best place to register an offshore company if you are an IT entrepreneur with worldwide income that you would like to keep overseas for later investment in new business ventures.
This country has perhaps the most reputable and experienced registered agents of all offshore countries. This is an important advantage when you want to register a company without wasting time and effort.
Another important benefit of operating an international business registered in the BVI is the ability to link it to an overseas bank account opened elsewhere in the world, be it a European country or, for example, Hong Kong or Singapore . Asian banks are particularly welcome for businesses registered in the British Virgin Islands.
There are reasons why banks are keen to work with businesses incorporated in the BVI.
BVI legislation is ideally designed for the successful operation of the international offshore hub and its impeccable services. This means that the BVI is the likely answer to the questions of which country is easiest to start a business in and which country is best for small businesses.
Despite all the worldwide calls from international organizations to combat tax evasion, the BVI does not seem to be the target of any criticism. All the standard requirements for company registration and business development are largely met there.
Therefore, foreign banks have no doubts about the legitimacy and transparency of companies registered in the BVI.
Some additional forms must be completed when registering a business in the BVI. They include the statement of the beneficial owners. Therefore, foreign banks feel comfortable with companies registered in the BVI.
In addition to the advantages, there are some disadvantages to registering a business in the BVI:
- registration is not as cheap as in some other offshore countries (eg Belize), although cheaper than in Europe
- registered agent fees and government fees are also somewhat higher
- as in almost all offshore countries, there is a requirement for the financial substance of any business that you register in the BVI
- AEOI (automatic exchange of information/financial data between counties) can be , which can be of little importance if the registered company is properly structured and its management architecture is appropriately designed.
For more details on how to order our professional service to register a business in the BVI with an overseas bank account.
DENMARK – competitive tax rates and labor costs that attract investors to register new businesses
Denmark is recognized as one of the easiest countries in Europe to start a business and register a business. Its strengths include the following advantages:
- the Danish flexicurity model (flexibility plus security on the labor market) with the most flexible employment and dismissal rules in the world, which makes it possible to reduce costs by scaling up business operations while involving part-time employees and temporary workers.
- you can register a company in Europe and complete company registration in Denmark in a few working days, not weeks;
- There are no citizenship requirements for your key executives, including the CEO and board members
- no need to worry about notary certification
- the corporate tax rate in Denmark is below the average OECD and EU level, and there are tax incentives for expats and foreigners who meet certain criteria
- the Danish company legislation is up-to-date and in accordance with current EU legislation.
NORWAY – a magnet for foreigners who want to register their new digital business in a high-tech hub
Norway is a sustainable economy and almost every interaction with the public authorities can be digital. Although the country is not part of the EU yet, it offers a number of opportunities for business in Europe due to Norway’s membership of the EEA.
You can quickly register a company in Norway and then quickly understand how to comply with the simple tax rules. Maintaining a new legal entity is also quite easy and not very costly in the European business community.
Here are some of the advantages of Norway that you will enjoy if you decide to register a company here:
- it is a good option for companies doing web based/digital business as all questions and issues involving communication with the government bodies can be arranged/resolved digitally
- the support and incentives from the authorities are aimed at technologically advanced companies, services and products
- the country’s labor market is rich in highly educated IT, finance, design and music technology professionals
- entrepreneurs have easy access to manufacturing expertise, investors and creative talent
- the country is economically and politically stable
- Norway has long-standing trade relations with the EU and European countries
- the communication and transport infrastructure is well developed.
However, there are some weaknesses:
- a newly registered company needs a lot of time to get a building permit
- the country’s labor regulations are quite strict, which is a disadvantage compensated for by the availability of highly qualified personnel.
To find out how Norway compares with other destinations that may suit your specific needs and new business formation goals, please send us a request for an online consultation with our expert.
NEW ZEALAND – the right destination for quick and easy business setup
New Zealand is a country known as one of the easiest destinations to start a business in due to many advantages, including the following:
– it only takes 1 or 2 days to register a company
– registration of business and real estate can be done in 2 days
– the country’s workforce is skilled and educated
– labor costs are relatively low,
– in terms of taxes: there is no payroll tax, social security or capital gains tax,
– you can register an LLC, which is more of a company, independent of shareholders.
New Zealand can be called the best place to do business, even if you only consider the possibility of ultra-fast company registration. But there is also much more to appreciate in New Zealand. To discuss this with our expert, please book a free online session.
ISLE OF MAN – recommended for zero tax rate and other perks for those intending to register a business
The Isle of Man has a trade facilitation customs agreement with the UK. It is an island country located between England, Ireland, Scotland and Wales, yet it is independent from the UK and the EU. This status provides certain benefits to companies registered in the Isle of Man that invest in the local economy but do business overseas.
The following benefits will be available to you if you register a company on the Isle of Man:
- zero income tax rate
- a well-developed banking system with sophisticated services
- the possibility to register and operate a company with only one owner (shareholder)
- right to appoint only 1 director, whether resident or non-resident, in the Isle of Man
- the benefits of registering a company in the Isle of Man which will hold investment portfolios including commercial property assets
- The Isle of Man is great for owning intellectual property
- a fairly quick procedure for company registration in the Isle of Man compared to Europe.
OTHER COUNTRIES that we recommend in 2022 to register a business and start new businesses
MALAYSIA offers all the advantages of a country with a large market and low business registration and maintenance costs.
SOUTH KOREA is the land of innovation and technology, a good place to set up an online outlet or other remote business types.
SWITZERLAND is a European country with excellent banking facilities at the highest level and relatively easy rules for company registration.
THAILAND is not Europe but can be very attractive for any online business as it is a digital haven for down-shifters and digital nomads.
SWEDEN is similar to Norway, which is in Europe, but not as optimized for business establishment and is somewhat difficult to register new companies in.
AUSTRALIA is a great country to start a small business (you can register a business almost instantly there).
THE NETHERLANDS is a great place to start any new business with tax benefits and the registration process requires no effort.
The exact cost and time needed to incorporate your new business in a particular country depends on the city, state or province where you want to start your business.
We hope we have given you an idea of what to look for to define which country is best for business. However, as mentioned earlier, you should take the time to research all possible options thoroughly, to understand what you want and how you can successfully grow your business and your business in a chosen destination.
Our experts can cut you short in becoming the owner of a new business abroad and help you choose the country in which to register the business, prepare a successful modus operandi for your business, help open accounts in a reliable bank or payment system .
We offer the following unique types of tailor-made services :
