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Jurisdictions with preferential taxation

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Jurisdictions with preferential taxation

Jurisdictions with preferential taxation

In jurisdictions with preferential taxation, the level of income tax is lower in comparison with other jurisdictions. At the same time, in some jurisdictions, when receiving income from other countries, some of these jurisdictions apply a system of unique tax benefits.

Moreover, tax rates at the source on the distribution of dividends, royalties, interest in these jurisdictions are very low or equal to zero.

Countries with preferential taxation include: Andorra, Bermuda, Great Britain, Scotland, Hungary, Hong Kong, Ireland, Cyprus, Latvia, Lithuania, Liechtenstein, Luxembourg, Madeira, Macao, Malta, Monaco, New Zealand, Poland, Portugal, Romania, Singapore, Slovakia, Slovenia, Uruguay, the Czech Republic, Switzerland and Estonia.

Applicable in tax planning schemes of jurisdiction, can be divided into the following categories:

1. States with zero taxes, also called Classic Offshore. Such countries are characterized by a low level of economic development, while these jurisdictions are politically stable. In such courts, the income tax is absent. In many classical offshore jurisdictions, there is no requirement for filing financial statements; the only condition that the state makes is to pay an annual fixed fee to the treasury. These jurisdictions also apply maximum measures to preserve the confidentiality of information about the ultimate beneficiaries of companies.

2. Countries with low taxes. The establishment of low fees in such countries is carried out to stimulate the economy and attract foreign capital. Offshore such jurisdictions are not, because companies in their territories pay taxes and submit accounting reports.

3. Countries with a national tax system. In the states of this category, the level of taxation is affected by the place of origin of the income. To prove eligibility, companies are audited every year and submit financial statements. In some jurisdictions, the application of tax rates depends on whether the funds were transferred in any way to “home” jurisdiction, or not.

4. High-tax countries with exclusive benefits. In such jurisdictions, the location of the source of income does not affect taxes. It is possible to distinguish rather high tax rates, as well as mandatory financial statements. Several organizational and legal forms of business are fully exempted from taxes (corporate):

  • LLC company;
  • Limited partnerships (LP, LLP, SLP);
  • Specialized companies.

5. Countries with special economic zones. Some states create special economic zones to achieve individual goals. Residents of economic zones are taxed at preferential rates or exempted from taxation in general. Among such countries can be identified as UAE, Georgia, Belarus, Russia.

Preferential jurisdictions
Country / jurisdiction Cost of registration $/€ Cost of the second year $/€ Financial statement
Andorra from 9750 EUR from 8790 EUR Yes
Bermuda from 18890 USD from 9800 USD Yes
Costa Rica from 4490 USD from 3900 USD No
Cyprus from 2690 EUR from 1890 EUR Yes
Czech Republic - A.S. from 1950 EUR from 1020 EUR Yes
Czech Republic - S.R.O. from 1950 EUR from 1020 EUR Yes
Estonia from 1890 EUR from 790 EUR Yes
Gibraltar from 2190 EUR from 1890 EUR Yes
Great Britain - LTD from 890 EUR from 790 EUR Yes
Great Britain (LP, LLP) from 1790 EUR from 1750 EUR Yes
Hong Kong from 1890 USD from 1760 USD Yes
Hungary from 2890 EUR from 1080 EUR Yes
Ireland from 1975 EUR from 1725 EUR Yes
Latvia from 1450 EUR from 1020 EUR Yes
Liechtenstein - Anstalt from 7850 EUR from 3520 EUR Yes
Liechtenstein-AG from 7690 EUR from 3980 EUR Yes
Lithuania from 2400 EUR from 990 EUR Yes
Luxembourg - S.A. from 10890 EUR from 4980 EUR Yes
Luxembourg - S.A.R.L. from 5690 EUR from 3630 EUR Yes
Macau from 3970 USD from 3650 USD Yes
Madeira from 1860 EUR from 1130 EUR Yes
Madeira - LDA from 4100 EUR from 2390 EUR Yes
Madeira - SA from 4100 EUR from 2390 EUR Yes
Malta from 2490 EUR from 1690 EUR Yes
Monaco - SAM from 10380 EUR from 5660 EUR Yes
Monaco - Sarl from 10980 EUR from 2660 EUR Yes
New Zealand from 2380 USD from 2190 USD Yes
Poland - SA from 1730 EUR from 840 EUR Yes
Poland Sp. z o.o. from 1100 EUR from 780 EUR Yes
Portugal - Lda from 2140 EUR from 1890 EUR Yes
Portugal - SA from 1890 EUR from 2390 EUR Yes
Romania - SA from 1490 EUR from 540 EUR Yes
Romania - SRL from 1490 EUR from 540 EUR Yes
San Marino from 3490 EUR from 2340 EUR Yes
Singapore from 2490 USD from 2390 USD Yes
Slovakia from 1450 EUR from 1140 EUR Yes
Slovenia from 2170 EUR from 840 EUR Yes
Switzerland Zug - GmbH from 6900 EUR from 6690 EUR Yes
Switzerland Zug - AG from 6900 EUR from 6690 EUR Yes
Tunisia from 2690 USD from 1320 USD Yes
United Arab Emirates (Dubai) from 7320 USD from 3075 USD No
Uruguay SA from 7540 USD from 5990 USD Yes
Uruguay SRL from 7540 USD from 5990 USD Yes
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