Every year over USD 1 trillion is distributed worldwide in the form of foreign direct investment. Investments by foreign investors and entrepreneurs are of significant value to the country and are seen as a sign of a healthy economic, political and legal environment. When it comes to investing your money, some countries are simply better than others. It depends on numerous factors such as the country's overall economy and growth prospects, political stability, taxation and the overall legal system, the complexity of starting a business, opening an account and the workforce.
In this article, we summarize three jurisdictions in terms of benefits and other features crucial to foreign investors. These countries have already proven their ability to attract multinationals and other investments, but when it comes to choosing the right place to invest, each country is different and might be better than others in one or more factors.
Singapore The first country to be analyzed is Singapore, which ranks 2nd among the best countries for investment and 15th among the best countries in the world in the US News Best Countries Ranking developed in cooperation with its international partners .
Located in Southeast Asia, Singapore is a bustling metropolis and home to one of the busiest ports in the world. As one of Asia's four economic tigers, the country has experienced impressive growth in recent years thanks to efficient production and manufacturing processes and innovations in the pharmaceutical and electronics industries. High GDP per capita and low unemployment make Singapore one of the wealthiest countries in the world.
Hong Kong Hong Kong is a special administrative region of China. While Hong Kong is often considered as a separate entity from China, it is not a country and therefore enters all lists and rankings under the name of China. China takes 26th place among best countries to invest in and 20th place among best countries in general.
Hong Kong’s legal system is characterised by the strict adherence to principles and the rule of law. It operates a free trade economic system and promotes minimal government interference in most sections of the economy. This reflects on the small number of tariffs and duties on traded goods and therefore it is a better place for investments than other parts of China. Foreign investments are attracted by promoting a favourable investment climate with low taxes, few restrictions and additional incentives to encourage investments. Corporate profits tax rate is 16.5% with a possibility to waive 75% of the tax. There is no tax levied on dividends. Company incorporation is a simple and fast-forward process. All applications for company incorporation also include an application for the business registry. The application can be submitted online and the processing generally takes one hour (as opposed to four days if the application is submitted in hard copy).
Due to its impressive growth and increasing immigration, Singapore attracts the best professionals to its workforce. The country offers cultural diversity and, with four official languages, is an important gateway for international trade. The corporate tax rate is 17%, but it can be reduced by taking advantage of numerous government subsidies, incentives, and other programs. Singapore's legal system is known for its integrity, efficiency and fairness, making the country better than many as a place to start and operate a business. The World Bank Group has recognized Singapore's political and regulatory environment as the most business-friendly in the world. Other factors: Least Corrupt Country in Asia; Best IP protection in Asia; Most popular country for arbitration in Asia.
United Arab Emirates The United Arab Emirates or UAE is listed as the 22nd best country in the world and is not mentioned among the best countries for investment according to the above ranking.
Before the discovery of oil in the mid-20th century, the UAE's economy was mainly based on fishing and the pearling industry. The country experienced rapid growth and general transformation along with the start of oil exports in the 1960s. Today the country's GDP can be compared to that of leading European countries and the World Economic Forum has named the UAE the most competitive place in the Arab world.
When incorporating a company in the United Arab Emirates, foreign investors can choose between offshore or onshore registration, whichever is more suitable for the type of company and the activities planned. Onshore registration means that the investor establishes a business presence on the UAE mainland. Offshore registration usually refers to a business presence in one of the UAE's free trade zones. The UAE does not levy corporate income tax at the federal level. However, most Emirates have some corporate income taxation and can even reach 55% for certain industries. In practice, corporate income tax is mainly levied on gas and oil companies and branches of foreign banks. Other factors: The UAE is among the most liberal places in the Gulf with a legal system that allows freedom of religion; No sales tax or VAT but with plans to introduce it in the future; In addition to traditional banking, Islamic (or Sharia-compliant) banking has seen tremendous growth in recent times.
EU blue card sometimes is compared to US green card. Blue color is referred to as the color of the European Union flag, for this reason the card is meant to be blue .Its purpose is to give work and residence permit to non-EU/EEA nationals. It provides rights for people to merge into socio-economic landscape and get on a path leading to permanent residence in Europe. Simply put, people can live and work in Europe without restrictions, while owning a blue card.
Purpose of introducing a EU blue card It was introduced by European Commission in 2007, proposed and implemented in 2009 as well as issued by 25 countries which are member states of EU. According to Eurostat data in 2016 the highest number of work permits issued was registered in Germany (more than 17,000), France (more than 700) and Poland (more than 600).
The EU blue card’s second purpose is to make Europe a more attractive destination for professionals from outside the European Union. A special EU Blue Card Scheme was created for all EU member states, except the UK, Ireland and Denmark, inviting highly qualified persons to EU states. This scheme is supposed to make Europe the world’s most favorite migration destination.
This can be ensured by providing equal salaries and working conditions to foreigners, free movement within the Schengen area, socio-economic rights, favorable conditions for family reunification, a perspective of permanent residence and a freedom of association as well. There are several main benefits of obtaining the EU Blue Card. These include very high chances of getting a permanent residence permit which entitles to any kind of occupation under facilitated conditions, equal rights as well as equal opportunity to work in the largest Europe’s economy and vast business market and easy-travel opportunities.
Requirements for a blue card application Although the same basic criteria can be applied for all 25 member states of EU, there are minor additional criteria set by each member state for its own. Generally, the Blue Card can be requested, if three main conditions are met. These are: non-EU citizenship, foreigners to be educated or professionally experienced (highly-qualified or skilled workers, researchers, students and vocational trainees) and having employment contract or binding job offer (seasonal workers, intra-corporate transfers). A person can be considered high-qualified worker if he or she has a work contract of at least one year, and if he or she can meet the conditions listed below. If a person is able to meet such obligatory requirements, he will be given an online profile in the EU Blue Card network which has a double function – to consult foreigners by employers in order to offer them a job contract and to enable foreigners to submit their applications.
During past few years there is a lack of workforce which can be noticed in such fields as: medicine, technology, informatics (IT), natural sciences and mathematics. This means that foreigners, working in mentioned fields usually have a higher chance of obtaining the EU blue card.
Additionally, if a person is self-employed or entrepreneur, he/she will be able to receive the blue card in case he/she possesses sufficient financial resources, has a business which will have a positive effect on the economy of the hosting state and can provide an economic interest that is short in the hosting EU member state.
When applying, it is important to consider time frames needed for gathering all the necessary documents. Usually 4-6 months are needed to prepare all the required documentation. Some countries set appointments at the appropriate Embassies or Consulates in foreigners’ home countries, some offer online applications which may be filled by foreigner himself/herself or his/her employer or a law firm. After applying the person is expected to wait for up to 3 months until the processing is completed.
Modern companies require specialized, professional employees with a high degree of responsibility and special expertise in specific areas. Since most people today live in a very rapidly changing environment, access to continuous professional development that deepens employees' knowledge is required. Therefore, when it comes to finding the right people for the right job, it is crucial to go through every single stage of the hiring process, such as: B. the planning, recruitment and selection of employees.
The recruitment phase consists of the implementation of certain methods and strategies that a company uses to find applicants for employment. This means searching for potential employees using internal and external sources, reviewing and shortlisting the applications received based on the suitability and suitability of the candidates, and having potential employees evaluated by professional recruiters.
The methods and strategies to be used must be valid and appropriate to ensure an effective recruitment process. Consequently, certain resources are required to perform this process. The most important thing is to delegate the task to competent HR and recruiting professionals who can assess whether a candidate has the right skills and qualifications to be successful in the position. They also need to know where to look for the right candidates for open positions and how to attract both suitable and unsuitable candidates.
This means recruiters should be able to understand the market and therefore know what a suitable candidate looks like. For this reason, the best choice for an international company is to hire local professionals who are familiar with the market and can easily identify the right candidates for the positions on offer.
Local recruitment companies typically have background knowledge of the range of local staff available. As separate business entities, third-party companies relieve the client company's managers, directors and other employees of additional work that is at the expense of their regular roles and day-to-day responsibilities. Since the best results are achieved when one is fully focused on one thing, a professional third-party firm is more likely to be more successful in attracting the best talent than the firm's senior executives.
With outsourcing now becoming an option in a wider range of hiring strategies, some companies are using it to buy time and ensure a more responsive approach to customer needs. Local external service providers can be of great help to internal employees, mainly because of the time savings in managing and implementing the recruitment process.
Local recruitment companies can offer more engaging and convenient recruitment processes by staying in touch with candidates, understanding the position sought and expediting hiring processes. Due to the existing background knowledge, it is not necessary to specifically educate or train the employees in order to prepare them for such a responsible task with long-term consequences for the company. Local recruiters are also likely to avoid common pitfalls of the hiring process.
Local recruiters can easily find a common language with potential candidates in the local job market, find an easy way to contact and engage with them, and help the company connect with and engage with them Stay in touch by keeping them updated throughout the hiring process. This makes the recruitment process more effective, methodical and organized, i. H. smoother and more personalized in terms of the approaches used, leading to the selection of the employees who will make the best of their jobs in the future.
Austria is a sophisticated and prosperous business centre, which serves as a trading bridge between Eastern Europe and Balkans. Austria welcomes foreign investors and rather than combating offshore countries, Austria makes tax treaties with them. In addition, tax-minimizing structures are developed for all types of companies, which allow the effective tax rate to be only 3-5%. These are only few of numerous benefits of company formation in Austria.
Business structure in Austria Choosing the right business structure may have critical consequences therefore it is highly important to explore all the available options before making this decision. Below are four most popular types of companies available for formation in Austria:
Joint stock company (Aktiengesellschaft) is designed for large businesses and its minimum share capital is 70,000 EUR. The capital is divided into shares and can be offered to the public. One shareholder is needed to start joint stock company and his or her liability is limited by the contribution to the capital. Limited liability company GmbH (Gesellschaft mit beschränkter Haftung) is the most popular type of company in Austria. The minimum share capital is 35,000 EUR from which 17,500 EUR or more must be deposited at the moment of registration and each shareholder must contribute with at least 7,000 EUR to the starting capital of the company. Shares of this type of company cannot be traded to the public. General partnership is formed by two or more corporate bodies or individuals with the same economic objective. Important to note, that all individuals participating in formation of general partnership have full liability for the company's debts as well as have equal rights in managing the partnership. No minimum capital contribution is set for general partnerships. Limited liability partnership can be formed if there is at least one partner with full liability on company's debts and can make major business decisions and at least one partner with his or her liabilities limited by the contributed capital and has no decision power. Procedure of company formation in Austria The number one action for all new entities is to receive a confirmation from the Economic Chamber saying that the company is indeed a new enterprise. Then a document called Articles of association is drafted by a lawyer before a notary and a starting capital is deposited in a bank account and a confirmation deed of the funds is received.
After the above things are done, the company formation process can be started at the local court. For this process shareholders need to deposit following documents:
Application of registration; Notarized declaration of establishment; Articles of association; Confirmation deed that the starting capital is deposited in the bank; Specimen signatures of the board of directors. After around seven days, when the business entity is registered at the local court and the information is published at the local newspaper, the company can be registered with the local Tax Office. There you will need to fill an application and declare the Articles of association, certificate of company registration at the local court and specimen signatures of the company representatives. In exchange, Tax Office issues a VAT number and tax identification number.
The last steps include registration in the Trade Register, registration with the municipality and finally – registration of company's employees with the social security authority.
The average time needed to set up a company in Austria is 21 days, from which the most time – 12 days – is spent waiting for a tax identification number (the official deadline to obtain the tax identification number is 1 month).
A cryptocurrency is a digital asset designed as a medium of exchange. It uses cryptography to secure transactions and control the creation of additional currency units. Cryptocurrencies are digital currencies, a subset of alternative currencies. The most popular cryptocurrency is Bitcoin, and since its invention, the various new cryptocurrencies that have been created are often referred to as altcoins, short for Bitcoin alternative.
Bitcoin was designed to be a peer-to-peer system for online payments without the need for a trusted central authority. Since its invention in 2008, Bitcoin has evolved into a currency, a technology, an investment vehicle and a user community. In fact, it is believed to be the first cryptocurrency, although as mentioned, similar systems have existed before. Because the Bitcoin system operates without a single administrator (like PayPal) or central repository, the US Treasury Department has categorized Bitcoin as a decentralized virtual currency. In fact, the first decentralized digital currency would be a more correct term than the first cryptocurrency.
Since all transactions are digital and take place directly between users and without intermediaries, it is important to ensure that users do not spend more Bitcoins than they own. Therefore, all transactions are verified by network nodes and recorded in a publicly distributed ledger called a blockchain.
While everyone has heard of Bitcoin and other cryptocurrencies, few have complete knowledge of how they work. In the remainder of this article, we will introduce you to the main advantages and disadvantages that you should consider before taking advantage of the possibilities of Bitcoin.
Advantages and disadvantages of using bitcoin Due to bitcoin's relatively novel nature, its price can increase or decrease unpredictably over a short period of time, and it can sometimes be more illiquid than other types of currency. This means that keeping your savings in bitcoins is a risky decision and not recommended. Bitcoin is seen as a high-risk asset, and it is not advisable to store money in bitcoins that you cannot afford to lose. On the other hand, due to its high volatility, those willing to take a risk may see considerable returns over a short period of time. Lack of awareness and understanding of bitcoin means it is relatively rarely used among businesses as a billing method. Once more and more businesses and private individuals start using bitcoin, its volatility and its liquidity risk should settle down.
Another thing to consider before acquiring bitcoins is the security of your digital wallet. Like your real wallet, your bitcoin wallet needs to be safe. Indeed, since bitcoin makes it possible to quickly and easily transfer funds anywhere in the world, the security concerns it poses are even greater. Remember, it is your responsibility to adopt good security practices. Overall, bitcoin is considered to be a safe and transparent system due to its cryptographic security. As a bonus, bitcoin users can enjoy considerably smaller transaction fees than those charged by credit cards or PayPal.
Money laundering is a money legalization process, when a person takes actions that conceal the source of funds in order to make their nature lawful. Anti-money laundering (AML) involves a set of measures aimed to prevent usage of the financial system or banks for money laundering or terrorist financing. AML measures and instruments are globally standardized and implemented by international and national institutions, banking and business companies. Each bank and other financial institutions, as well as other business entities, must execute the laws and regulations on AML. In order to obtain bank license, the bank must approve compliance with AML requirements and present AML policy. AML policy can be upgraded in case of necessity or in response to recent trends in AML field and recent practice.
AML policy core principles Although the AML policy may differ from bank to bank, the major principles are common customer due diligence procedures (CDD) based on know your client principle. Due diligence procedure is based on client provided information in the questionnaire. Such questionnaire must be frequently updated.. If the person transfers funds significantly exceeding the indicated cash flow - the bank may ask additional questions in order to verify the purpose of such transfer. If the company changes the business profile, it must notify the bank. In addition, if the company starts co-operation with a new company, it must notify the bank in order to provide smooth transfer process. Usually banks or other large financial institutions incorporate a specific department that challenges AML. Such department are called Legal Compliance Department.
AML and customer due diligence definitely affect client's privacy. However, the purpose of investigation is solely based on protection of public interests and prevention of financial crimes and support of terrorism. Consequently, lack of investigation would greatly threaten the internal market of the Europe Union.
Goals of AML policy AML policy was introduced with the ultimate goal to establish a general framework to fight against money laundering, terrorism, corruption and other financial crimes. The other goal is to protect community from money legalization and to ensure that the organization complies with relevant laws and regulations.
By introducing AML policy, it is planned to provide transparent and trackable cash flow that must be maintained in order to prevent terrorist financing and to control its usage by suspected terrorists and criminal groups and their own financial resources. The full transparency and traceability of transfers of funds is an important and valuable mechanism in the prevention process, identification and investigation of money laundering and terrorist financing. If the bank detects a suspicious transaction,it may freeze the funds until the client provides an explanatory reasoning.
Given that within the European Union there are no withholding taxes on IP royalties between member states, we can suggest a number of countries where royalties are particularly advantageous.
CYPRUS The intellectual property royalties tax regime in Cyprus has changed as a result of the recommendations of the Organization for Economic Co-operation and Development (OECD) Action Report 5 and the Ecofin Council conclusions published on 8 December 2015. Legislation has been changed to limit the companies that can benefit from research and development (R&D) exemptions, but the tax rate in Cyprus is still one of the most favorable in the EU for foreign companies using Cyprus intellectual property want to license -resident companies (intermediaries), where this right is then sub-licensed to the end user. Overall, the effective tax on IP royalty income should be less than 2.5%.
IRELAND In 2015 Ireland introduced an effective corporation tax rate of 6.25% on intellectual property income based on an allowance for research and development costs borne by the company. By linking the two components in this way, Irish law encourages companies to conduct R&D directly within the EU - leading to the creation of intellectual property - while discouraging them from acquiring licenses without directly committing to R&D.
BELGIUM Belgium has introduced a tax system that favors those with income from acquired copyrights. This tax regime can have many different applications and can be used to protect artworks as well as a useful tax break for IT developers. Income from IP rights royalties is taxed at 15%. This income is not taken into account when calculating social security contributions. In addition, these taxes are reduced by 50% for imports due to the application of standard import costs. The first €15,000 that a copyright owner earns in a year is therefore taxed at 7.5%, and the next €15,000 at 11.25%. This tax system applies to people with a total annual income of up to 56,450 euros.
LUXEMBOURG In general, corporate tax in Luxembourg is 29.22%, but for IP licensing income it can be as low as 5.8%. This is due to an 80% corporate income tax exemption. Interestingly, this exemption also applies to companies that have registered a patent for use in connection with their own business, which then calculate a notional net income as if they had received the licensing income.
ITALY Italy is a larger market compared to the other countries discussed and can be a very attractive place for a company to invest in R&D since 2015 companies have been able to deduct intellectual property income from their taxable income base. The tax deduction was set at 30% in 2015, 40% in 2016 and 50% from 2017. Businesses will therefore enjoy a significant tax rebate by reducing their taxable income.
THE NETHERLANDS Since 2010, IP income has been taxed at only 5% in the Netherlands. Except for patents, there is no income limit. Patent holders can actually have access to this tax regime if their share of the expected revenue is between 30% and 70%, taking into account the total combined revenue from patents and other sources. These rates also apply to foreign companies owning intangible assets or companies that have received research and development accreditation from the Dutch Ministry of Economic Affairs if they are owners of software IP or trade secrets. The only other caveat to this favorable tax regime is that it doesn't apply to marketing and branding-related assets.
As more jurisdictions open up to foreign trade, companies can gain access to a large pool of resources abroad. They can establish relationships with foreign partners and relocate their production to foreign locations or simply export their products to new markets. IT and software development companies are also trying to capitalize on moving production to foreign jurisdictions.
In general, the main advantages to offshore software development is lower cost compared to home country. For example, the cost of developing the exact same software in India is 50% lower than in the US. The savings generally come from lower labor costs, but offshoring IT and software production offshore can also expand the company's access to a broader pool of workers with higher skills and expertise. This could explain why 50% of America's Fortune 500 companies use offshore IT and software development. Let's look at some of the jurisdictions where opening a software development company might be more beneficial compared to others and discuss the reasons why.
India India has long been one of the preferred software development outsourcing destinations for leading multinational companies around the world. This means that one of the biggest advantages of choosing India for your IT and software development business would be multinational demand for outsourced software development services. Meanwhile, the company would benefit from relatively lower labor costs, a broad pool of skilled workers, and a business-friendly environment with the government encouraging start-ups and small businesses. Furthermore, the IT industry is expected to grow in the early to mid teens in the coming years due to favorable political and economic initiatives by the Indian government.
United Kingdom London was recently described as the city with the most opportunities for business and took first place in terms of technology readiness. While low labor costs are not among the benefits of starting a software development business in London, there are several other benefits that could offset relatively higher wages. Numerous hubs and incubators offer young start-ups and small companies an environment with all the necessary functions and support for less than 300 euros a month. The government is also committed to supporting the software development and technology sectors with organizations such as Tech City UK and Innovate UK with the aim of accelerating the growth of IT companies. Various tax benefits are now available to IT and software development companies in London. Other benefits to consider include a skilled workforce and high-speed Internet access.
Poland Eastern Europe is becoming more and more attractive for IT and software development companies, with Poland ranking as the number one Eastern European country. While Poland may not offer as low labor costs as India, it can offer other advantages such as proximity to Western Europe and the ability to find common working hours with the rest of the world. Poland also shares a cultural affinity with the western world as well as other eastern countries. It is also believed to offer better product quality and business environment compared to lower cost targets for software development companies.
Each continent has additional jurisdictions to consider for registering an IT company - each with their own benefits and characteristics:
America: Brazil, Argentina and Chile; Asia/Pacific: China; Europe: Romania, Belarus and Ukraine. The above countries have large enough populations to have a broad labor pool and good education systems to produce skilled software developers. The business risks in these countries are manageable and the costs are reasonable compared to the USA, Canada and Western Europe.
It is important to remember that while a particular jurisdiction may be considered the best place to start an IT business for one entrepreneur, it may not be suitable for another. Consider the necessities your business is most interested in. This can be language, geographic location, regulation of specific activities, skilled labor, or cost.
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13.04.2025 12:45