When you are a business owner, many things can become a constant source of headaches for you. Taxes are one of those headaches. Depending on where you have your business, the tax system may strip you of money so bad that your only choice is bankruptcy.
A solution? Set up your business in a country or city where taxes are not such a headache. There are several tax havens in Europe where you will pay little tax money, depending on the type of industry that you pursue.
Jersey is part of the Channel Islands near the United Kingdom, which became self-governing after separation. With the population going just slightly over 100,000 people, the country is small, but with no taxes on business, capital gains, or stamp duty. Personal income tax is also very low, making it a good business place.
Many people decide to start doing business in Switzerland for a good reason. It has very low-income taxes depending on which canton you are from and no tax for income that comes from abroad. It’s no surprise that 18,000 of the bank accounts in Switzerland belong to foreign customers.
Cyprus is attractive for both tourism and business. The costs of living are very low, and you have no tax on interest income and dividends. This can help you save significant amounts of money.
If you have a holdings company outside Malta’s borders, then you may reduce your corporate tax payments by as much as 7%. Plus, you may deduct plenty of business expenses pre-tax, which makes it a tax haven.
Ireland has a tax treaty that covers more than 70 countries, keeping a corporate tax rate of only 12.5%. Plus, R&D companies get impressive tax breaks, which is why so many entrepreneurs decide to start their businesses in Ireland.
If you are a foreign investor working with forex brokers offering ECN/RAW trading accounts, Luxembourg may be your ideal place. Income tax should only be paid if your income comes directly from Luxembourg, which is very convenient if you are an international investor.
If you live in Monaco for at least half a tax year or have a business there, you can get numerous tax benefits. There is no corporate or personal income tax, no capital gains tax, no inheritance tax, and no wealth tax, thriving from real estate investments. It’s no surprise that one-third of the residents here are millionaires.
Whether you are an EU or a non-EU citizen, you can create an EU business in Estonia. You are only taxed for the money you take out, not the sums you invest. You also have no tax on reinvestments.
If you have a business in Germany, you are exempt from interest tax as a foreigner, whether you are a resident there or not. Foreign income is also exempt from taxation, regardless of the form that it comes in.
If you have an LLC in Denmark, you get complete privacy from tax authorities, protecting you from extra taxes. Also, foreign businesses expanding in Denmark don’t have to pay corporate tax, allowing you to save money.
The Bottom Line
Tax havens are great for business, as they allow you to save income money. Rather than being forced to give back to the government, you may put that money to good use and grow your business.