Among the countries with the lowest corporate taxes in the world, we can mention a number of Eastern European countries as well as the countries that are perceived as tax havens because they have a 0% corporate income tax (Anguilla, Bahamas, the Cayman Islands and others). At the other end of the spectrum, we can mention the United Arab Emirates, Brazil or Japan. Below, we present five countries that offer attractive taxation regimes.
Montenegro
The corporate income tax for those who start a company in Montenegro is 9% which applies to both local and foreign companies. The basis for taxation is the residence of the company: resident legal entities are taxed on their worldwide income while non-resident companies only on their Montenegro income.
By comparison, investors who open a GmbH in Germany will pay a higher corporate income tax: the effective corporate tax (which also includes a solidarity surcharge and other added taxes) is between 30 and 33%.
Isle of Man
The Isle of Man is one of the locations in Europe that offers a very attractive taxation regime. The standard corporate income tax rate for both resident and non-resident companies is 0%.
Poland
When opening a Sp.z.o.o company in Poland, the most popular business form (the equivalent of the private limited liability company), investors will pay a standard 19% corporate income tax rate. A lower 9% rate can be available to small companies and for those who start a business with a maximum revenue value.
Investors can reach out to a team of local Polish lawyers for more information about the taxation policies.
Other low tax jurisdictions in Europe can include Ireland, with a 12.5% corporate income tax rate and Hungary with a 9% corporate tax. In Romania, investors who start a qualifying micro-enterprise can benefit from an even lower tax, of 3% or 1%.
As mentioned before, there are countries that levy a 0% corporate income tax, such as the Cayman Islands, Belize, the Bahamas, Bahrain or Bermuda, to name a few. Some of these are famous offshore centers particularly because of their zero taxation.
The value of the corporate income tax is an important criterion when choosing the jurisdiction to base the business. We recommend that business owners are aware of its value and the general taxation policies but also take into consideration other issues, such as ease of incorporation and doing business.
