Choosing the jurisdiction in which you will register your company is a decision that should be based on hard facts and proper consideration. In this guide, I list the best jurisdictions in the world and provide those important facts.

 

The best structures for online businesses

Growth focused / external funding

UK LLP / US LLC / Canada LP – If properly structured, a UK LLP / US LLC / Canada LP can be ideal for a company looking to grow aggressively or take external funding. It offers all the benefits that comes with being a UK / US / Canadian entity but without the tax burden (if properly structured). Its also easy to add/remove partners / members, hire employees and process credit card payments. It is important to note that this entity is not suitable for those domiciled in high-tax countries, at least not if you wish to avoid paying taxes. It is also important to note that it is very hard for non-UK residents to open a business bank account in the UK (this is slowly changing with the new online banks). There is a strong possibility that your UK LLP will have to bank in Europe or in a place like Singapore / Hong Kong. This is not a problem in the US where it is easy for non-residents to open bank accounts.

Singapore Pte Ltd – Singapore companies benefit from one of the most competitive taxation system in the world with rebates available for new/small companies. They also benefit from easy access to the world’s most solid banks, excellent payment processing options (including Stripe) and an excellent reputation overall. It also is easy to raise capital in Singapore if you are in the creative, tech, medical, urban management or chemical industries.

Hong Kong Ltd – For those who are put off by the high cost of registering in Singapore (actual cost and taxes) or the complexity of properly structuring a UK LLP, Hong Kong is an excellent alternative. The local banks are great and Hong Kong provides easy access to the Chinese market. Just as in Singapore and the UK, reputation is not a problem for HK entities. That being said, Hong Kong does not have much of a startup culture and this means that the availability of facilities for such companies is limited. Also, unlike Singapore, in Hong Kong it is nearly impossible to avoid the annual audit. Opening a business bank account has also become fairly tricky in 2017.

 

Lifestyle

RAK Offshore – This tiny emirate in the United Arab Emirates offers one of the best “true offshore” structures for those building a lifestyle business. A RAK Offshore company is completely exempt from local taxation, does not have to file an annual return or go through an audit. It can bank in the UAE but it is important to note that it cannot conduct business onshore. The maintenance cost is higher than in places like Belize or the Seychelles but the excellent reputation of the UAE more than makes up for it (no problem opening bank accounts, investing globally and doing business in OECD countries).

Estonia OU – Thanks to its innovative tax system, the Estonian OU is an excellent structure for those living in Europe. Only distributed profit is taxed (at a flat rate of 20%) and thanks to existing tax treaties that 20% can in most cases be claimed in your country of residence. It is easy to open a bank account with the local banks (Swedbank, SEB and LHV) and you can benefit from cheap EU credit card payment processing. An Estonian company can also obtain a European VAT number, a must for a B2B business. Salaries paid to non-Estonian residents are not subject to Estonian taxation.

 

Partnership

UK LLP – This structure is perfect for partnerships. If each partner hold their shares through an offshore entity or are tax haven residents, no taxes are owed on non-UK sourced income. Opening a bank account is easy (not in the UK though) and it is possible to use Stripe or Braintree to process credit card payments. Maintenance is cheap and compliance is easy.

 

The best structures for holding companies

Companies and real assets

RAK Offshore – If reputation, privacy and the availability of world-class banking services is important for your business, the RAK Offshore entity is the way to go. The UAE is not on any tax blacklist and as such, no restrictions are imposed on its companies, they can own assets in nearly every countries. The tax burden of a RAK Offshore entity is nil and compliance is both easy and while more expensive than in Belize or Seychelles, still relatively affordable.

IBCs – If reputation does not matter or if you do not need to open a bank account, using an IBC is a great way to hold assets. It is incredibly easy to register one in a place like Belize, Seychelles, BVI and compliance is only a few hundred dollars annually (no audit, no annual return). It is important to note that opening a bank account for an IBC with a good bank is very, very hard. Restrictions may also be applied when doing business in OECD countries (often in the form of a withholding tax).

 

Pension

Estonia OU – This is by far the best entity for those looking to build a pension. This is essentially a zero-tax entity as only a distribution tax is levied and in this case, no distribution occurs until retirement. At that point, the company simply pays you a salary that is 100% tax-free as long as you do not live in Estonia. As an added bonus, registering and maintaining an Estonia OU is both very cheap and easy. It also will not attract the wrong kind of attention unlike a tax haven company.

 

The best structures for day traders

Company shares / Bonds / ETFs / Forex / Metals

RAK Offshore – For those trading big accounts, the combination of a RAK Offshore company and a Singapore trading account is as good as it gets. Compliance is very easy, the annual cost is reasonable, privacy is excellent and access to the best brokerage firms and banks is easy to secure. It is important to note that such a company cannot invest in UAE assets.

IBCs – For those trading small accounts, an IBC is the way to go. Registration is cheap and easy, compliance is a breeze and privacy is excellent. That being said, it is very hard to open a bank account with a good bank, you may actually have to go with an “island bank”. In this case this should not be a major problem as the vast majority of your capital will be held by the broker but it still is a factor to consider.

 

Where to register your business

You can access detailed country guides by clicking on the thumbnails

Taking action

To access our step-by-step guide to registration, case studies, Zero Tax Nomad course and for personalized help, please log into your Insiders Club account. Not a member? Click here to learn about the benefits of membership.

  • Pingback: GIBRALTAR CORPORATE TAXES 2016()

  • Olga

    Wow! That’s an awesome analysis you’ve done. Thank you for putting this information together. Which one would you recommend for a global online consultancy services?

    Thank you

  • Olga

    Wow! That’s an awesome analysis you’ve done. Thank you for putting this information together. Which one would you recommend for a global online consultancy services?

    Thank you

  • A UAE offshore company (RAK offshore) is what I’d recommend provided that your personal tax situation is taken care of. The banks there are excellent, there’s many options for payment processing, no taxes, no bookkeeping requirements, no audit, no accounting requirements.

  • A UAE offshore company (RAK offshore) is what I’d recommend provided that your personal tax situation is taken care of. The banks there are excellent, there’s many options for payment processing, no taxes, no bookkeeping requirements, no audit, no accounting requirements.

  • bobriakov

    And does the bank opening require a visit or some banks allow remote openings?

  • bobriakov

    And does the bank opening require a visit or some banks allow remote openings?

  • Konstantin Kurbatov

    Such a great overview, thank you! I also would suggest to add a withholding tax rate to each country as it’s a crucial point for foreign investors.

  • Konstantin Kurbatov

    Such a great overview, thank you! I also would suggest to add a withholding tax rate to each country as it’s a crucial point for foreign investors.

  • Yes a personal visit is required. All reputable banks these days require it, in UAE, Hong Kong, Singapore etc.

  • Yes a personal visit is required. All reputable banks these days require it, in UAE, Hong Kong, Singapore etc.

  • Richard

    Great info! I’m looking into registered agents in Gibraltar and getting a huge range in prices. I was wondering which one you based your the pricing in you info on? Also would you recommend one in particular?

  • Richard

    Great info! I’m looking into registered agents in Gibraltar and getting a huge range in prices. I was wondering which one you based your the pricing in you info on? Also would you recommend one in particular?

  • Hi Richard, formacogibraltar.com is one of the most popular registered agent in Gibraltar and their prices are very competitive.

  • Hi Richard, formacogibraltar.com is one of the most popular registered agent in Gibraltar and their prices are very competitive.

  • Dave

    Great info. Who would you recommend for opening a RAK off source company?

  • Dave

    Great info. Who would you recommend for opening a RAK off source company?

  • World Assets Management (worldassets.eu) is the best corporate service provider for RAK offshore formation.

  • World Assets Management (worldassets.eu) is the best corporate service provider for RAK offshore formation.

  • Rick

    Awesome analysis, thank you!! As for small trading/investment accounts for US citizens, do you know which countries would be best to open a brokerage account in, and do you happen to know any brokerage firms in these countries that are known to take US clients? I know a lot of brokerage firms turn away US clients since FATCA..

  • Rick

    Awesome analysis, thank you!! As for small trading/investment accounts for US citizens, do you know which countries would be best to open a brokerage account in, and do you happen to know any brokerage firms in these countries that are known to take US clients? I know a lot of brokerage firms turn away US clients since FATCA..

  • The US-owned brokerage firms in Singapore and Hong Kong sometimes open accounts for US citizens (Citi, Interactive Brokers etc). The benefits of using such a setup as opposed to trading with a US-based account are not significant however.

  • The US-owned brokerage firms in Singapore and Hong Kong sometimes open accounts for US citizens (Citi, Interactive Brokers etc). The benefits of using such a setup as opposed to trading with a US-based account are not significant however.

  • Rick

    I was thinking that a US citizen may be able to set up an IBC somewhere like Nevis and then a brokerage account in the name of that IBC in a place like Singapore or HK and be able to lower their taxes. As far as trading profits, would it not be possible for US citizens to essentially avoid the US federal income tax in this way?

  • Rick

    I was thinking that a US citizen may be able to set up an IBC somewhere like Nevis and then a brokerage account in the name of that IBC in a place like Singapore or HK and be able to lower their taxes. As far as trading profits, would it not be possible for US citizens to essentially avoid the US federal income tax in this way?

  • It certainly is possible to register an IBC and open a trading account for it. That said, I can’t tell you if it would benefit you from a tax perspective. Especially due to CFC rules (See IRS form 5471, https://www.irs.gov/pub/irs-pdf/f5471.pdf ). I’d certainly talk to a tax attorney before making a move.

  • It certainly is possible to register an IBC and open a trading account for it. That said, I can’t tell you if it would benefit you from a tax perspective. Especially due to CFC rules (See IRS form 5471, https://www.irs.gov/pub/irs-pdf/f5471.pdf ). I’d certainly talk to a tax attorney before making a move.

  • Rick

    Ok, thanks for the info! Yeah, the US tax code really shows no mercy for expats…

  • Rick

    However, I wouldn’t have to pay taxes on any income earned from an offshore business until I repatriate it back to the US, so I would still be able to hold profits in offshore banks and access it abroad without paying US taxes, no? Well, I assume this is why virtually all US multinationals stash their foreign profits overseas

  • Idy

    Hello,

    In your list, you have forgotten the Costa Rica.

    Why ?

  • Idy

    Hello,

    In your list, you have forgotten the Costa Rica.

    Why ?

  • I did not list it here because it isn’t a good business jurisdiction. I covered its residency program for individuals however.

  • I did not list it here because it isn’t a good business jurisdiction. I covered its residency program for individuals however.

  • Nathalie

    Hello!

    Hong Kong is on the blacklist of European commission.

    Proof here : http://www.paradisfiscaux20.com/

    Regards

  • Nathalie

    Hello!

    Hong Kong is on the blacklist of European commission.

    Proof here : http://www.paradisfiscaux20.com/

    Regards

  • Hi Nathalie,

    There is no such thing as a European Commission tax blacklist. There is talk of creating one but at the moment it’s just that, talks.

    In any cases, such a move is very unlikely to have any impact on HK. The only EU country in HK’s list of major trading partners is Germany with 1.6% of trade.

  • Hi Nathalie,

    There is no such thing as a European Commission tax blacklist. There is talk of creating one but at the moment it’s just that, talks.

    In any cases, such a move is very unlikely to have any impact on HK. The only EU country in HK’s list of major trading partners is Germany with 1.6% of trade.

  • If I have a residence in a tax haven jurisdiction and own a small business online, where would you recommend?

    I would like to open a company that can do banking with solid banks and also hold some assets under the company´s name.

  • If you are a tax haven resident, the UK would be a great option for your business. You can read my article about the LLP structure at:
    //www.freedomsurfer.com/uk-llp/

  • Alex Strong

    Wheres best for a online business? current tax resident of the UK.