Where to create a company and open a business bank account

Business
1

Given the choice of anywhere in the world really, where is best place to create a company and open a business bank account? It’s for remote long term contracting work, and remote from low/no tax countries.

Criteria are to minimise tax, costs and paperwork, and well, it being possible to open a bank account is of course necessary. Not even sure if it’s best to have the company and the bank account in the same country or in different countries.

2

I can give you an example and arguments that favor Romania for that endeavor.
If your monthly TO is under 10k EUR/mo (I think that’s the limit), your ltd company is seen as a micro company and as such it pays 3% corporate tax.
You can have and accountant deal with the paperwork (that one is not that straightforward, but even if you decide you want to get to the bottom of it, it might not be worth it - so an accountant will set you back 100 eur/month).
You can open a Wise account for both yourself and the company and thus avoid any local banks that are still in the 20th century.

So, in short, the advantage is 3% of corp. tax and the fact that it’s in the EU (if that means anything in your line of work).

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3

Hey Martin,

I think your personal tax residency should be the fact that influences your choice the most as most likely you will fall under DTTs and CFTs, which force you to establish a branch there. So the best thing would be to discuss the legal aspects with an expert where you live.

Putting that aside, Estonia fits many criteria which you are looking for - if you become an e-Resident, you can do everything online, 0% corporate income tax on retained and reinvested profits, and all EEA bank accounts are accepted to be your business’ official bank account.

4

Hey Kristjan,

The thing is I can kind of choose where I live, and Im staying away from any high tax country. I like Estonia, would totally work, but 20% on non-retained earnings is 20 more percent than I was aiming for.

How about a US (like Wyoming) LLC or a Dubai freezone company. Both of these have zero corporate tax I think. (For non-US residents it s zero) Not zero costs though, and can only get a Wise account with the US one, not the Dubai one.

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5

Dear Martin,

Your question is quite a popular one.
Most people want to pay less taxes.

To get an answer to the question, you should at least say:

  1. What are you going to do exactly? You work alone, no team? You provide services?
  2. Where do you live (tax residence)?
  3. Are you going to spend the earned money at the place where you live or invest it?
  4. Do you have US citizenship/Green card?
  5. What money flow are we talking about? There’s a fixed overhead in many solutions, that makes them good for millions, but not for thousands USD (so to say).

That’s the bare minimum, as I see it.

6

Dear Ilya,

All right,

  1. Contracting in financial services. Alone
  2. I split the year between multiple countries (none being a western high tax country) and can choose which one I spend most time in, but for this exercise let s say UAE.
  3. Spend a part of it at least
  4. No
  5. I’ll answer this in dm, not millions though
7

Not familiar with UAE tax system, but after a quick search - it has no income tax for natural persons.

So, from a quick glance I don’t see a problem with opening an offshore company in somewhat respected and open jurisdiction (say, BVI). The company ownership will be transparent, and I hope it’s ok for you.

You can withdraw money to UAE (as dividends or salary?), pay zero tax there (hopefully, I’m not familiar with UAE), and also invest using the offshore company (no capital gains at BVI).

The minor issue is opening a bank account for BVI. It won’t be a BVI bank, maybe a Cyprus bank. I hope your counteragents will be fine with BVI company and such bank. Some large companies avoid contracts with offshores. So you may need to discuss that with your potential clients beforehands.

Also, the expenses - I think about $1000-$2000 monthly, but not sure exactly. So, if you get like 120.000$ a year, then it would be the same as paying 10-20% tax.

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8

Thanks for the answer! Transparency is fine.

So the downsides of BVI company and Cyprus bank is the cost and potential difficulties opening a bank account.

Wouldn’t a US LLC be better? Still no tax, and a Wyoming LLC has a 100 USD filing fee and a 50 USD annual fee. And no problem opening a Wise account with a US LLC. Also a UAE company would probably also be cheaper.

9

Maybe you can just work from UAE, as an UAE resident, paying zero tax then?
No company, as a natural person with the bank account in UAE.

That’s the simplest solution, and I’m not familiar with UAE, so no idea if that’d work.

Why did you ask here for something else? :grinning:

P.S. Mostly people flee from high-tax jurisdictions, UAE seems to be zero tax, is it?

10

Well, that s kind of what Im doing right now, but I cant continue. Have to have contracting revenue coming to a company, can’t come to me personally.

11

Isle of Man

Zero corporation tax and no restriction on taking money out. British law, British banks. Incorporation fees a little higher than England but far lower than some listed above.

The important issue is safety. you wont wake up to find it all gone!

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