In which European country should you open a business in 2024 and pay low taxes?

The number of companies opened in EU countries has increased significantly over the past few years.

This is directly related to the desire to work and conduct business in an economically stable and prestigious jurisdiction with access to the international market, with the opportunity to minimize taxes and obtain a long-term residence permit for the whole family through business immigration.

Registering a company in the EU in 2024 will be beneficial for both large companies and private entrepreneurs who want to optimize their business costs.

✅ Stable legal protection
Companies registered in the EU operate in an atmosphere of positive business aptitudes with the support of the state. Also in many European countries there are special subsidies, tax discounts and programs for the development of small and medium-sized businesses.

✅ Start a business in the EU and pay less taxes
Establishing the right corporate structure in a specific country can save you and your company money. After all, it is important to optimize the tax burden and reduce the amount of taxes, and not to evade paying taxes.
For example, the income tax rate in Ukraine is 18%. The income tax rate for companies registered in Cyprus is 12.5%. And in Madeira (Portugal) it is only 5%.

✅ Register a company and open a bank account in Europe
It has long been known that the requirements and procedures for opening accounts in European banks are getting stricter every year. And it is almost impossible to open a bank account in Europe for an offshore company.
Therefore, having decided to register a company in the EU, you will have a real opportunity to open a bank account in Italy, Spain, Switzerland, Portugal, Cyprus, Malta and other European countries.

✅ Business development and access to the international market
Owning a company in the EU is always prestigious. Foreign companies and contractors prefer cooperation with partners from more developed and economically stable countries that are not considered offshore.

✅Access to grants and business development programs.
In many countries, there are special programs for the development of start-ups, small and medium-sized businesses, as well as low lending rates.

✅ Open a company and obtain a residence permit
Company registration is the basis for business immigration to European countries. If certain legal conditions are met, an entrepreneur and his family can obtain a long-term residence permit and move to the chosen country. In addition, business immigration and startup programs often lead to obtaining citizenship and a passport of an EU country.

There is no single ideal jurisdiction in the world for starting a business that would suit everyone. But there are countries whose legislative and tax systems are ideal for your particular case.

Very often clients come to us with the request “Quickly register a company in the EU and pay low taxes.” But in consultation with a specialist, it turns out that, for example, the client also wants to stay in the country of business for a longer period of time or even permanently reside there with the opportunity to obtain EU citizenship, which means that it is necessary to additionally apply for a long-term residence permit abroad.

In connection with this situation, we always recommend approaching the choice of country for starting a business in a comprehensive manner, taking into account both corporate, tax and immigration laws together with the goals and objectives that the entrepreneur wants to achieve.

What should you know before registering a business in the EU?

When choosing a jurisdiction for business registration, we recommend considering the following criteria:

📌 Taxation

Taxes are always one of the main issues when choosing a country for starting a business, to which we pay special attention. It is advisable to choose a jurisdiction that has efficient and transparent taxation, or generally has lower taxation than in your home country.

However, when choosing a country to open a company, it is necessary to take into account many factors, including: benefits for newly created companies, the use of double taxation agreements, benefits for non-resident companies, benefits for certain types of companies (partnerships), benefits for limited income for small and medium-sized businesses.

And the most significant thing is that we must not forget what taxes the business owner will pay in the country where he is a tax resident.

Therefore, when choosing a jurisdiction, we are now considering not offshore, but low-tax jurisdictions that provide the largest number of tax benefits, both for businesses and beneficiaries (capital gains tax, dividends, interest and royalty taxes).

📌 Costs for business registration and further maintenance of the company

When choosing a country for registering a business, it is important to be aware in advance about the minimum required authorized capital for different types of companies, the average salary when hiring employees, the cost of renting an office, the cost of banking services, etc

📌 Absence of foreign jurisdictions on “black” lists

Blacklists are maintained by international organizations, as well as individual countries. For example, if a jurisdiction is included in the EU “black list” or is considered offshore, then this complicates the country’s financial relations with the European Union. In this case, European banks will be forced to carry out additional checks when working with companies registered in countries included in the EU “black list”.

📌 Fast and convenient travel communication with your country of residence

This factor is also very significant. For example, you decide to open a company in Hong Kong, Singapore or Seychelles, and the remoteness of these jurisdictions can create certain difficulties for the entrepreneur.

Below we have highlighted the best countries for registering a business in terms of economic stability of the jurisdiction, tax minimization and quality of life.

CYPRUS

Thanks to its legislative system, stability and full integration into the European Union, the ability to legally minimize taxation, as well as quickly and easily register a company, Cyprus is called ➡️ “The most convenient jurisdiction for European business.”

The regulatory framework of Cyprus fully complies with the legislation of the European Union and the requirements of the Organization for Economic Co-operation and Development (OECD). Therefore, Cyprus is not a classic offshore, as was previously believed. Today Cyprus is a low tax jurisdiction without the stigma of an offshore tax haven.

In addition, the ideal location, warm Mediterranean climate, azure sea, high level of security, reliable modern infrastructure, excellent healthcare system and prestigious private education sector are key reasons why many choose Cyprus not only for work and business, but also for family life.

Corporate taxes, income tax and social charges are among the lowest in the EU.

• Corporate tax in Cyprus is fixed at 12.5%
• Special IP BOX tax regime for an intellectual property company, which allows you to reduce your effective corporate tax rate to 2.5%.
• Tax on dividends from businesses worldwide is 0%, regardless of the country of origin of income and the transfer of income to Cyprus from other beneficiary companies
• Special non-domicile tax status in Cyprus
• The legislation allows foreigners to become tax residents of Cyprus in just 60 days.
• Income tax-free minimum €19,500/year.
• 50% income tax discount for foreigners working in Cyprus with a salary of more than €55,000 per year.
• No wealth, inheritance or gift taxes
• No annual property taxes

More details:

➡️Cyprus Company Incorporation
➡️TOP 5 reasons to move your business to Cyprus in 2024
➡️Cyprus Tax Residence

PORTUGAL

Portugal is a low-tax jurisdiction with a competitive tax system that attracts a large number of specialists and entrepreneurs.

The country is included in the list of “Best Tax Residences in Europe” and occupies a position in the TOP 5 EU countries in terms of ease of doing business.

Portugal has the lowest business and operating costs in Western Europe: office rent, utility costs for office maintenance, accounting services.

The country’s government is interested in capital inflows and promotes the development of a competitive, sustainable and favorable business environment. One example is the presence of special free economic zones in Portugal that offer tax benefits.

Many entrepreneurs are well aware of the Madeira International Business Center, which is an autonomous part of Portugal and a special economic zone with a large number of tax benefits. For example, according to the Madeira International Business Center (MIBC), the lowest corporate tax in the EU is 5%.

Portugal also provides a special Non-Habitual Resident tax program for new residents.

Under the terms of the NHR (Non-Habitual Resident) program, new residents are exempt from taxes for 10 years on most types of personal income that comes from a foreign source or that is taxed in another country. For example, 0% tax on gifts, inheritance and wealth, as well as rental income, investment income, capital gains, interest, dividends – these amounts can be excluded from tax liability, subject to double tax treaties.

Companies in Portugal can be divided into three types, which have different criteria and differences, including taxation.

• Companies registered on the Portuguese mainland
  Corporate tax 17% – 21%

• Companies are registered according to the general procedure on the island of Madeira
  Corporate tax 11.9% – 14.7%

• Or on the island of Madeira under the terms of the IBC regime (International Business Center Madeira)
  Corporate tax – 5%

More details:

➡️Company registration in Madeira
➡️Taxes in Portugal. Tax status of Non-Habitual Residents (NHR)

MALTA

Malta is a member of the EU and is a modern international business and financial center with excellent infrastructure, which also offers one of the most competitive tax systems in the EU thanks to its special tax refund system.

The use of corporate taxation schemes allows reducing the tax burden to 95% of taxable income.

• Corporation tax in Malta is 35%, but thanks to the tax refund system, the overall net effective corporate tax rate can be reduced to 10%, 5% and even 0%.

• Dividends are not subject to further tax if they are distributed by a company incorporated in Malta to non-resident persons in Malta.

• Employer social insurance contributions amount to about 10% of an individual employee’s salary

Since 1992, Feod Group has been providing a wide range of immigration, corporate and legal services in the EU countries, as well as in the USA and Great Britain.

The company includes corporate lawyers and international lawyers, trust attorneys, accredited investment fiduciaries, and international tax planning specialists.

Our advantage is an integrated approach to protecting the interests of the beneficiary, your personal and business taxes, and ensuring access to social benefits for the family.

✓ Assistance in opening corporate and personal bank accounts
✓ Tax consultations and international tax optimization. Comparison of taxation by jurisdictions of interest (EU, US and UK).
✓ Drafting business plans
✓ Assistance in obtaining a business visa and business immigration for the entire family
✓ Confirmation of the origin of the source of funds
✓ Services for the selection and purchase of real estate for life and investment

Article author

Anastasia Taran Head of Corporate Services
Ukraine

In 2013, she graduated in law from the National University «Odessa Law Academy» with honors and received a Master of Law degree. Anastasia Taran has experience in international and contract law, as well as corporate and tax law in Europe. Within the framework of Feod Group, she specializes i...

In 2013, she graduated in law from the National University «Odessa Law Academy» with honors and received a Master of Law degree. Anastasia Taran has experience in international and contract law, as well as corporate and tax law in Europe. Within the framework of Feod Group, she specializes in immigration and corporate law of European countries, particularly:

• family and corporate immigration solutions.
• establishing a business in Europe.
• personal and corporate taxation in Europe.
• opening accounts in European banks.
• obtaining a tax resident status.

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