Starting a business in another country than one’s own can bring significant advantages to the foreigner. Among these, easier business registration requirements and time-related to the entire procedure, simpler ways of obtaining specific business licenses and most of the times better tax benefits.
There aren’t few those who decide to start new businesses or relocate existing companies to other countries with the purpose of obtaining certain tax advantages. And there are a lot of countries which offer such benefits. Among them, Malaysia is doing a great job with its province Labuan. Starting a company in Labuan brings many benefits as it has a tax-free status.
There are also other countries which offer various advantages, among them being those related to taxation.
Tax benefits granted under various agreements
Many countries have signed double tax treaty agreements under which foreigners who open companies there can obtain various tax deductions, refunds of even exemptions. One of the countries that signed a lot of double tax agreements is Italy. Those who decide to open companies in Italy can benefit from a quite extensive list of countries with which such conventions have been signed.
In order to understand how these agreements work it suffices to say that the income earned by a company of foreign citizen with activities in two countries which have signed such a treaty will not be taxed twice. Also, the list of incomes which fall under the incidence of such tax treaties includes a lot of them, ranging from business profits to salaries and other types of incomes earned from dividend payments and owning real estate properties.
The foreign country’s tax system can be a real advantage
Sometimes, a foreign investor’s home country can impose higher and more taxes than the governments in other countries. This can determine a business owner to consider relocating a company or starting a new business despite not knowing what to expect. Many times, lower and fewer taxes represent a good incentive for foreigners choosing a foreign country for doing business.
Incentives for foreign entrepreneurs
Speaking about incentives, there are many governments which offer incentives to foreigners who open companies in their countries. From lower taxes to exemptions, there are cases in which the local authorities encourage foreign investments this way.
Investments in certain industries and the creation of jobs are also rewarded through programs enabled by governments and which attract many foreign business people.
Taxation is, perhaps, one of the strongest incentives for foreign investors, which is why many governments in countries on every continent try to improve in order to attract those seeking for such stimulants. Taxation represents an advantage for both foreign companies which benefit from lower taxes and also for the governments which increase their annual incomes.