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The 5 Best Low Tax Countries to Set Up Your Company | Save Money Offshore Legally - YouTube
Channel: Just One Dime
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What's happening, guys,
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my name is Dan Rodgers, and
I'm a coach with Just One Dime.
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And today I have a really
interesting topic for you.
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This is a bit different,
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but I think you're gonna
find value in this.
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I personally find this
very, very interesting,
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and the Just One Dime
team and I think that you,
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guys, are gonna love this as well.
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We're gonna be listing five
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of the low corporate tax
countries around the world.
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So if you're thinking about
setting up a company now
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or in the future, for Amazon
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or for something totally different,
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this is still applicable,
and it's really interesting.
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Once you get into the
weeds and start working out
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how you yourself can
structure your company.
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The question is, "Can
I structure my business
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"so that it keeps more of its money
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"and it grows faster?"
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That is something that
everyone would want.
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As an Amazon seller myself
and an online content creator,
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this is something that's
interested me for a while.
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I've actually set companies
up in different countries.
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Some of them, which worked out well,
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some of them, which didn't work out well,
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and it's often quite an
expensive thing to do as well.
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So in this video we're gonna break down
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the five countries, five
low corporate tax countries,
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and the pros and cons of each,
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including things like the costs.
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One quick distinction I wanna make
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is between businesses and companies.
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These terms are often
used interchangeably,
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like "I run a business,"
or "I run a company."
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And people think that
means the same thing,
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but they're actually very different.
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A business is any activity
that trades value for value,
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if you have a lemonade
stand on the street,
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that's a business.
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A company is a legal entity,
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and a person, like you or
me, is also a legal entity.
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Therefore a business,
that exchange of value,
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can be owned by either legal entities,
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a company or a person.
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And so today of course we
have corporate tax countries,
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we're talking about this
from the perspective
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as though you have setup a company
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that owns your business.
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And so regardless of how
you earn your income,
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today I'm gonna show you
how you could potentially
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set yourself up to save
a lot of that money,
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keep a lot of that money working for you
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at the end of the day.
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Now, there's a lot of
pieces to this puzzle,
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when you look at just
financial structuring,
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it's this huge thing with many avenues.
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But today we're gonna focus specifically
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on incorporation.
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Where you can setup a company
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so that that company
keeps more of its money
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and therefore enjoys faster growth.
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But when we are researching
foreign incorporation
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we've gotta keep a couple things in mind.
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First of all, the ease
of doing business there,
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and the country's culture
towards foreign investors.
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You don't wanna go setup somewhere
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where it looks financially beneficial,
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but it's an absolute
nightmare to do business there
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or to actually even setup
a bank account there
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because no one wants to do
business with that place
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because perhaps it's
seen as shady, et cetera.
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So you wanna avoid that type of thing.
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That's also why you're probably
not gonna be that familiar
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with some of the countries on this list
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'cause we haven't gone for
all the pure tax savings
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for this very reason.
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Some of them are very
difficult to do business from.
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Number two, you're looking
for access to reliable
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and also stable banking systems.
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Three, you gotta look
at the costs involved,
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one with incorporating with
actually forming that company
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with the setup costs, but
two, with a maintenance costs,
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how much does it cost you to maintain
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that company's incorporation.
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Four, we're gonna look at the tax rates
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and how beneficial those are,
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but also how those relate to
our specific circumstance.
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For example, you might live in a country
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that has a double tax
treaty with another country,
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and that's going to change
things for you specifically.
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So you also wanna be
doing a bit of research
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if one of these interests you.
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And then five, we just threw this in here
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'cause I know a lot of you
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are interested in selling
on Amazon specifically.
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And so we're going to
look at Amazon acceptance
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because of course Amazon doesn't accept
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every single country,
they only accept companies
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incorporated in specific countries.
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So we'll tell you for each of these
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whether or not that's true,
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for Europe as well as for North America
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'cause those lists are different.
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And if that last one's important to you,
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then you're gonna be really happy.
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'Cause today we're
gonna be making our SAIL
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or our Smart Amazon Incorporation List
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available for free below.
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Basically we evaluated 120 countries,
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where they're accepted by Amazon,
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whether it's North America or Europe,
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as well as the financial benefit
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you might get in that environment.
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So this is really gonna
help you quickly narrow down
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to the best location.
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You can see it here on screen,
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but these are the accepted
registration countries
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for Amazon Europe as well
as Amazon North America.
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If it has the American flag,
it's accepted in North America.
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If it has the EU flag,
it's accepted in the EU.
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And if it has the dollar face,
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that means it has a beneficial
financial environment,
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or you might find a relatively
low corporate tax rate there.
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If it has the perfect hand icon,
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then that means it's the easiest
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in terms of Amazon specific services.
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And this just means
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the Amazon ecosystem's very strong there.
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For example, you have accounting services,
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which focus on ecommerce
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or on Amazon accounting specifically.
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And, guys, for those of
you who are interested
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in selling on Amazon
specifically, and this list,
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I can tell you, this list is
just the tip of the iceberg.
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I really recommend you
check out Amazon FBA mastery
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in the description below
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because there we go into way more details
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in terms of this type of thing.
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And then of course once you're setup,
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all the rest of the process
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are building your Amazon business as well.
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So jumping into our five
low corporate tax countries.
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Number one, the Isle of Man.
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So we start our list off on a small island
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nestled between England and Ireland
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in the middle of the Irish Sea.
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Officially it's not actually a country,
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it's a self-governing
British Crown Dependency.
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And with a population
of just 85,000 people
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it's really looking for
hard-working entrepreneurs
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and people to move to its shores.
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And there's also quite a lot going
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for the business owner in the Isle of Man.
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The Isle of Man is a low tax jurisdiction,
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there is no corporate
tax, no capital gains tax,
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no wealth tax, no stamp
duty or inheritance tax.
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There is a personal income tax,
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remember, that's totally
different to corporate tax,
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but I thought "Let me include it here"
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because some of you might even be looking
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at relocation to where
you go base your company
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to keep it simple.
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So I did include it sometimes,
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if it's a beneficial
personal tax system as well.
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It has two brackets, 10%
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and then it tops out at 20%.
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So that is relatively low,
it's actually very low
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compared to the rest of Europe.
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The Isle of Man has access
to excellent banking systems
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and it's relatively easy to
conduct business from here.
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There's actually a lot
of very big companies
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who have a presence
here in the Isle of Man.
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Directors and chair-holders
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can be based anywhere in the world,
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and you don't need to visit
the island to form that company
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to incorporate and setup that company.
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If you're concerned with
Amazon acceptance specifically,
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just know the Isle of Man
is accepted for Europe,
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but it is not accepted for North America.
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But there is a drawback,
and that is incorporation costs.
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It is very expensive, it
costs between £2,300
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and £4,500, which
is about $3,000 to $6,000.
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And that's for the Isle
of Man company formation.
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The Isle of Man government
registration fees,
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a registered office address for year one,
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and the registered agent for year one
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as well as of course your
certificate of incorporation
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and all the other documents.
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Things like memorandums of association.
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And next on our list we have Panama.
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We cross the North Atlantic
for number two on the list,
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located at the crossroads
between North and South America
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we find Panama.
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A digital nomad hotspot keen
on international investors
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and business owners.
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If you're in the U.S. you
might actually have heard
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quite a few stories or
maybe even know people
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who have moved down to Panama
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or who have registered
their company in Panama.
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When it comes to offshore entities
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that only engage in business
outside the jurisdiction,
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that means you run a Panamanian company,
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but it doesn't actually
do business in Panama.
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All its business activities
happen abroad or online.
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For example, when that happens,
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Panama levies no income
tax, no corporate tax,
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no capital gains tax, and no estate taxes.
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It is a pure tax haven,
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and that's why you will hear
some shady things about it
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as well as the Panama papers, et cetera.
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Panama has a vast incorporation network
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with access to banking, which
is often offshore banking,
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so it's a little bit more complex
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than some of the other systems
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where you often base your company there,
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you have a bank account there.
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Sometimes your Panamanian
company will be based in Panama,
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but the bank account
will be somewhere else.
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So it's a little bit more
complex like that in some cases.
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It is known well for its
strict banking secrecy laws
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and it protects account-holder privacy.
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Every offshore Panamanian company
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requires a minimum of three directors,
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a company secretary, a
registered office address,
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and opening the business bank account
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requires a visit as well as a deposit.
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Offshore accounts are
also offered, though,
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and those are often recommended.
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The incorporation costs vary
between about $800 and $1500.
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There are no mandatory
local presence requirements.
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What that means is you
don't have to be in Panama
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a certain amount of days per year.
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But of course depending
when you watch this video
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for almost all of these
you wanna be checking this
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at the current time when
you're looking to do it.
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But that's one of the big benefits of this
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is you don't have to physically yourself
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be present there.
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And take note of the annual fees,
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the maintenance fees with
the structure you setup,
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with whichever incorporation
service you use
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'cause those can really add up
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and that's something you wanna be doing
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for every single one of these.
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For Amazon acceptance, Panama
is accepted for North America,
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but not for Europe currently.
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Panama has signed 12
double taxation agreements
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with these 12 countries on screen here.
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You can pause this if you
wanna look at that list.
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And moving on to number three
on our list here, Estonia.
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We travel back across the North
Atlantic for number three,
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and bordering Russia with
its shores on the Baltic Sea,
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Estonia has actually opened its arms
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to foreign entrepreneurs.
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It's developed the very first
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e-residency program in the world.
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That means you can actually
become an e-resident of Estonia
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without ever even going to Estonia.
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Now, I know Estonia is lesser-known,
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but did you know that both
Skype and TransferWise
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are actually Estonian startups?
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Estonia offers a zero
percent corporate tax rate
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on retained earnings.
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This means your company's
retained earnings,
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whatever you keep in the company,
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let's say you sell on Amazon,
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you sold products for six months
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and you make a big profit on those,
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that profit is still in
the company's bank account,
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you pay zero tax on that.
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And you can reinvest those earnings.
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Elsewhere that profit, even
if it's still in the company,
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it would be taxed at a
higher corporate tax rate.
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Meaning there's less to reinvest.
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And so in this way Estonia helps companies
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grow much, much faster.
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It should be noted, though,
that a 14% to 21% tax rate
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is applied to distributed profits.
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That means if, let's say, you
have that big amount of profit
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in the company bank account
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and you distribute that
to yourself in some form,
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then that tax rate is going to be applied
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between 14% and 21%.
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So that has to be noted,
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it's not that there's just no tax,
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it is applied only on distributed profit.
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But as you can imagine,
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let's say you're building your
business to sell it one day,
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most of your profits are
gonna be kept in the company,
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meaning you have a zero percent tax rate.
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It also has a personal income
tax rate of 20% for residents.
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Incorporating in Estonia
can be done entirely online,
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you'll need a legally
registered address in Estonia,
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but again, this can be a virtual address
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and can be setup without you
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ever having to visit the country.
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There are a lot of turnkey
services in Estonia
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that are gonna help you setup
the company from A to Z.
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So check them out online.
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But opening a business
bank account in Estonia
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often requires a visit.
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But do note this, a
lot of online solutions
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that are recommended and well-accepted,
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things like Holvi or Payoneer,
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and you just wanna speak to these services
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to see your own options there.
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But they have been
surprisingly forward thinking
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in terms of keeping everything online.
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If you can have an online
account for it, rather do that.
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If you can have e-residency,
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better than residency, et cetera.
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Very, very online oriented.
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Incorporation costs here
are the lowest on the list,
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and they vary between $350 and $450.
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Financial records must be kept,
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services for this might cost you
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between $50 to a $100 a month,
that's your bookkeeping.
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For Amazon acceptance
you'll be glad to hear,
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Estonia's accepted in both,
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North America and the European region.
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And moving on to number four
on our list we have Cyprus.
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Now, number four was closely
contested with Ireland,
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both having the exact
same corporate tax rate.
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However, Cyprus came out just on top
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because of lower costs.
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A mediterranean island
off the coast of Turkey,
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Cyprus has a vast array of
foreign incorporation services.
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It boasts a flat corporate
tax rate of 12.5%,
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and there is no withholding
tax on dividends paid
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to non-resident shareholders.
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Incorporation can be
done entirely remotely.
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The setup requires a
resident company secretary
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and also a registered office address,
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as you've seen with most of these.
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Opening a bank account in Cyprus
can also be done remotely.
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Filing is very important here,
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and it also has to be done in Greek.
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Therefore you're gonna
need resident accountants.
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Incorporation costs in Cyprus
range between $1400 and $3500.
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That includes the business
bank accounts in most cases.
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The minimum capital
required is just one euro.
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Currently the euro and the dollar
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are very, very closely matched,
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so that's about one dollar.
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The annual renewal fees
for a Cyprus company
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are about €750 or $750.
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For Amazon acceptance
Cyprus is accepted by both,
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North America and Europe.
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And moving on to number five
on our list, we have Georgia.
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We just jump across Turkey
to find number five,
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and based between Europe and Asia
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in a highly strategic
location between the two,
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this trade hub is looking to
attract foreign investors.
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The corporate tax rate is zero
percent on retained earnings,
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so similar to Estonia in this case.
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The maximum tax rate on
distributed profits, though,
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is just 15%, so it pulls
just ahead of Estonia here.
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And it has a very low
withholding tax on dividends
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of just five percent.
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And for those of you keen on relocation,
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on the personal income
front, local-source income,
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that's like if you make
money in Georgia itself,
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let's say you have a
physical store in Estonia
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selling to Estonian customers,
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that tax rate is 20% for
your personal income.
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But foreign-source income,
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that means your business
operates outside Georgia,
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for example, in ecommerce or online,
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or in a different country,
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that income on a personal
front is tax-exempt.
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The incorporation cost sits
between a $1000 and $1500.
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Everything can be done remotely,
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however a visit would
really expedite the process.
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It's relatively easy to
open the bank account
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even remotely in Georgia,
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but it is going to take
mailing back and forth
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notarized and apostilled documents.
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For Amazon acceptance
Georgia is accepted by both,
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North America and Europe.
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You now know these five
low corporate tax countries
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and the pros and cons of each.
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We went over the Isle of Man, Estonia,
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Panama, Cyprus, and Georgia.
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So which would you choose or
which country did we miss?
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Let us know in the comments.
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Guys, I just wanna emphasize,
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this is literally the tip of the iceberg.
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There is so much more beneath the water,
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we go into a lot more
in Amazon FBA mastery,
[1007]
you can find a link below.
[1008]
We also go into a lot of things
[1010]
like how do you setup in
the U.S. as a foreigner?
[1014]
And what clever strategies you can use
[1017]
if you wanna do that, and
you're going that route?
[1019]
What should you do if
you're a single owner,
[1021]
what should you do if you're a partnership
[1023]
wanting to do that?
[1024]
So all those specifics
are covered as well as,
[1027]
of course, the rest of
your Amazon journey,
[1030]
everything else you're gonna
do after incorporation.
[1033]
So if you're interested and
you also want a community,
[1036]
check out the links below.
[1037]
I really enjoyed this
video, I hope you did too,
[1040]
if you did, drop this
video a like for me please,
[1042]
but I hope you, guys,
are making good progress,
[1044]
and I will see you in the next video.
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