Want to start a business in a location with a low corporate tax rate?
If you are planning on living there, you’ll want to be sure that it offers a great quality of life as well, whether it’s high quality schools, great healthcare, great public facilities, or even something so simple. only breathtaking landscapes.
Even if you only plan to visit occasionally, you may still want to choose a destination that is safe, with good health care and facilities.
Let’s take a look at some of the best places to live with low corporate tax rates.
Guernsey (0% corporate tax)
Guernsey has an incredible 0% corporate tax rate for most businesses, although there is also a higher 10% rate that applies to certain types of businesses (like banks) and a 20% rate that applies to others, including cannabis companies.
As an Anglo-Norman island between the UK and France, Guernsey has stunning countryside and coastline. It is an independent and self-sustaining British Crown dependency, with a large financial industry and a large creative and digital industry. You can automatically live in Guernsey and / or start a business there if you are a UK citizen, and others can get a visa.
Most residents of Guernsey speak English (the official language) although French is used for administration. A small number of inhabitants speak Guernésiais, a Norman dialect.
Barbados (5.5% corporate tax)
With a corporate tax rate of just 5.5% (and only 1% if your business earns more than $ 30 million), Barbados is definitely business friendly. There is a decent health care system, a large expat community, and of course all the sun, sand, and recreation options you could possibly want.
The main downside is that Barbados can be very expensive. Imported brands are expensive, and unless your business is making a lot of money, you may need to adjust your lifestyle accordingly.
Hungary (9% corporate tax)
Hungary’s corporate tax of 9% is the lowest in the EU. There is also a low income tax rate, at 15%. Hungary has well-developed urban transport systems and strong pre-school and primary education. (There are also a number of international schools in the capital, Budapest.) Hungary also has a vibrant cultural scene and a fascinating history.
Value added tax is high (at 27%) so products can be expensive. However, there is a 5% lower rate for most drugs and some food products. Compared to other European capitals, Budapest has a low cost of living.
Gibraltar (10% corporate tax)
Gibraltar is a British territory located off the southern coast of Spain. It has an incredibly strong economy and is one of the richest countries in the world. If you are a UK citizen, you can move to Gibraltar without a residence permit.
The main language of Gibraltar is English, although there is also the local dialect of Llanito, which is a local form of Spanish with elements of English and other languages. It’s small and densely populated, so if you like a lot of space to move around, this might not be the right choice for you.
Cyprus (12.5% corporate tax)
As well as having a low corporate tax rate, Cyprus is a cheap place to buy property, and it’s also easy for foreigners to do so. The average price of a house on the Greek Cypriot side of the island is approximately $ 110,000 (plus stamp duty).
If you love the sun, you will be very happy in Cyprus, with almost 340 sunny days a year. During the summer months (April to October) it is very hot and dry, so you need to make sure to wear sunscreen.
Ireland (12.5% corporate tax, which will likely rise to 15% under G7 reforms)
Ireland was classified second in the world for quality of lifewhich makes it a fantastic choice if you are looking for a low corporate tax country. It has a very strong education system, although it should be noted that a large majority of schools are affiliated with the church, with a relatively small but growing number of multi-faith schools.
Ireland has a temperate climate, with mild, humid and variable weather, and generally hot summers and mild winters. It is a popular and safe country with many coastlines and beautiful lakes and landscapes.
Canada (15% corporate tax)
Canada was ranked best in the world for quality of life, due to its political stability, good labor market and strong public education system. It is also considered incredibly business-friendly, due to favorable tax laws, as well as low levels of bureaucracy and corruption.
Canada is a large country, with almost all Canadians living in the south, where the weather is warmer. If you are considering moving to Canada, keep in mind that winter can be extremely cold in some areas. So be sure to choose carefully. Of course, if you love skiing, Canada is a fantastic place to live, with a number of top ski resorts.
Can you run your business abroad from your home country… and should you?
Some entrepreneurs choose to establish a branch of their business in a country for tax purposes, without being resident there themselves. It is certainly possible, although you will likely need a physical address for your business in the country so that someone can receive legal documents related to your business.
However, just starting a business in another country to avoid paying taxes in your home country is considered unethical by some people, especially if you have accumulated a lot of wealth. Like this author of AIS-CPA said, covering the Paradise Papers leak:
“By not paying taxes, they are robbing the governments of their countries of huge sums of money that are intended to run the systems that allowed them to achieve their incredible wealth and prestige in the first place.”
Ultimately, if you really want to run a business in a low corporate tax country, you might find that it’s easier (and more ethical) for you to live there on your own. All of the above countries have excellent quality of life, so why not give them a try?
This column does not necessarily reflect the opinion of the Bureau of National Affairs, Inc. or its owners.
Kenneth W. Boyd is the co-founder and chief educator of accountant.com, an online training provider for established finance and accounting professionals. He also runs the blog Accidentally accounting, a one-stop-shop for an overview of everything related to accounting.
Bloomberg Tax Insights articles are written by seasoned practitioners, academics, and policy experts who discuss current tax developments and issues. To contribute, please contact us at [email protected].