Why not use lesser known jurisdictions?

[romashkavarashka]

Why not open a company in Mongolia? 10% of tax.
Kuwait? 0%
Saudi Arabia? 5%
Lebanon? 17%, the same as in Singapore.
Quatar? 10%, at max.
Canary Islands 4%

There are more.

Why do people here not talk about these and other, lesser known, countries, with low taxes? Would there be real hard problems of opening a company in such countries?

 

[Sols]

They don't have as well-developed financial services sectors as the more popular jurisdictions. This tends to cause costs to be higher, less transparency on the process, and local banks might not be interested in opening accounts for you, especially for smaller amounts (under 1 million USD/EUR annual turnover).

In many Middle Eastern countries, there are restrictions on foreign ownership. Not to mention the sanctions and other reputation concerns associated with some of the territories there.

Access to foreign currency and converting the local currency can also be a problem.

But mostly it's just lack exposure and experience.

If you want to be the pioneer who turns Qatar into the new UAE for us, go for it!

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This is the probably the answer to your question.

 

[KJK]

Mongolia - heard from two different sources it may be good place for banking when you get rejected elsewhere, e.g. some shady Bitcoin exchanges banked there. If you've got enough money, you can create your own bank (which was easy to do in the Carribean, now not so more - maybe try Mongolia instead 😀). For company it probably shouldn't be your first choice

Saudi Arabia - unless you want to do local business, it doesn't make much sense. For international business, UAE may be better. Also remember that if you're in Saudi, the prince can just come and do whatever. Check out what happened to the country's billionaires recently - they were arrested and taken into hotel "prison" and held until they paid a few billion to the state.

Lebanon - very liberal muslim country (compared to Saudi and even UAE), I've heard it used to be good for banking; for company it seems very unstable. Check out the demographics - maybe 1/4 or 1/3 of the population are refugees (from Syria etc.) and there are huge protests against the government. It may turn into failed state.

Qatar - you will not find any bank for a Qatar company, prepare to be blacklisted by everyone and everything. It's even worse to have something with Qatar than with Iran.

Canary Islands - not a country, this is part of Spain. You can form a Spanish company if you want to do local business in Spain.

________________

Opening a company is never a problem. They will probably look at you like an idiot in these countries but you'll find someone to help you form a company there. The real question is what to do next, with a useless company in an useless jurisdiction.

 

[romashkavarashka]

KJK said:
Opening a company is never a problem. They will probably look at you like an idiot in these countries but you'll find someone to help you form a company there. The real question is what to do next, with a useless company in an useless jurisdiction.
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What do you do with your new company? Use it.

Why open bank accounts in those countries? I propose to open a a company in those countries, and a corporate bank account could be open elsewhere, in other, perhaps, well known jurisdiction. Would there be an issue with this approach?

 

[romashkavarashka]

Sols said:
and local banks might not be interested in opening accounts for you,
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then a bank account could be opened in another country, whether it be well or not well known.

 

[Tax Cow]

Considered Canary Islands a number of times.

Their 4% CIT comes in exchange for hiring locals (3 or 5, depending on the island), and having at least one local resident director there. Another issue is that Spaniards don't speak English well - they are worse than Romanians, Hungarians, Bulgarians. The workforce in the Baltics costs about the same but their English is better by a huge margin. It's not even comparable.

The sole use-case I see for that Canary Islands tax incentive is for an export or service business which focuses all its efforts on the Latin America region.

 

[KJK]

romashkavarashka said:
I propose to open a a company in those countries, and a corporate bank account could be open elsewhere, in other, perhaps, well known jurisdiction. Would there be an issue with this approach?
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Oh that sounds like a great idea, just do it, pretty please. Go and open two companies in the locations you mentioned, let's say one in Qatar and one in Mongolia.
Then try to get a bank account anywhere in a well known jurisdiction as you mention. Maybe try walking into a Swiss bank saying "Hi I'm romashkavarashka and I have this new company in Qatar or Mongolia, can I get an account with minimum balance?".

Then share your findings.

xzars: Honestly the only situation when this sounds like a good deal is if you really like the location (Gran Canaria...) and you really want to visit it often. Otherwise it means maintaining at least an office or a fake office there. For Latin America there must be better solution directly in LatAm (maybe Panama etc.)

The remark about Spaniards not speaking English is interesting. My experience is that it is not that they don't speak English, they actually understand and sometimes speak pretty well, of course not all people (e.g. 50+) - however, they are somehow too proud and stict to their native language, just like French just speak French. With Hungarians it is a completely different story, the entire country just speaks very little English and it's not that they would be afraid/shy/proud, they just honestly don't know it.

 

[bibing]

Essentially you have 2 issues when you need to choose a jurisdiction for a new company (granted we all aim to save on taxes)
1. You need a jurisdiction with "easy" access to financial means (banks)
2. You need a jurisdiction which is stable and has credibility.

Many banks, and nowadays EMIs, are not going to deal with offshore entities. Lots of paperwork to comply with current laws. So they chose to not to. Not worth the business. And doing paperwork is expensive too.

 

[romashkavarashka]

KJK said:
Oh that sounds like a great idea, just do it, pretty please. Go and open two companies in the locations you mentioned, let's say one in Qatar and one in Mongolia.
Then try to get a bank account anywhere in a well known jurisdiction as you mention. Maybe try walking into a Swiss bank saying "Hi I'm romashkavarashka and I have this new company in Qatar or Mongolia, can I get an account with minimum balance?".

Then share your findings.
Click to expand...

Bad advice. I won't share my findings. I'll keep them with me. Otherwise everyone will begin to do it, it'll become saturated and useless.

 

[romashkavarashka]

xzars said:
Another issue is that Spaniards don't speak English well - they are worse than Romanians, Hungarians, Bulgarians. The workforce in the Baltics costs about the same but their English is better by a huge margin. It's not even comparable.
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Speak Spanish and have no problems.

 

[romashkavarashka]

bibing said:
Essentially you have 2 issues when you need to choose a jurisdiction for a new company (granted we all aim to save on taxes)
1. You need a jurisdiction with "easy" access to financial means (banks)
2. You need a jurisdiction which is stable and has credibility.

Many banks, and nowadays EMIs, are not going to deal with offshore entities. Lots of paperwork to comply with current laws. So they chose to not to. Not worth the business. And doing paperwork is expensive too.
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Then how do people open a company in the UK remotely as non residents and then, since they aren't allowed to open a UK bank account, open a bank account in other country with no problem?

the same goes for Hong Kong.

because these are crediable?

 

[Martin Everson]

romashkavarashka said:
Why not open a company in Mongolia? 10% of tax.
Kuwait? 0%
Saudi Arabia? 5%
Lebanon? 17%, the same as in Singapore.
Quatar? 10%, at max.
Canary Islands 4%
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Aside from Canary Islands which one would you call stable and open enough to want to deal with? i.e didn't Saddam roll into Kuwait on vacation with some tanks the other day and stayed there for months before he was forced to move on like a gypsy? 🙁

KJK said:
Saudi Arabia - unless you want to do local business, it doesn't make much sense. For international business, UAE may be better. Also remember that if you're in Saudi, the prince can just come and do whatever. Check out what happened to the country's billionaires recently - they were arrested and taken into hotel "prison" and held until they paid a few billion to the state.
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They were all given free refreshments while they were dangling by their ankles from the chandeliers of the Ritz Carlton in Riyadh. They were treated very well thank you very much.

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[Artemis Eleutheria]

Martin Everson said:
They were all given free refreshments while they were dangling by their ankles from the chandeliers of the Ritz Carlton in Riyadh. They were treated very well thank you very much.
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I would say significantly better than anyone here would be treated during a taxman shake-down.

 

[bibing]

romashkavarashka said:
Then how do people open a company in the UK remotely as non residents and then, since they aren't allowed to open a UK bank account, open a bank account in other country with no problem?

the same goes for Hong Kong.

because these are crediable?
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Short answer, YES.
UK, Hong Kong, Singapore are OK and considered "solid" jurisdictions.
Brunei, Cayman, Belize, well good luck in banking.

 

[Tax Cow]

romashkavarashka said:
Speak Spanish and have no problems.
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It's about finding profitable utility for the Spaniards I must employ to qualify for the 4% rate. My Spanish ability or non-ability has less significance. Or do you insist I should hire 2 masseurs, 2 cleaners, one chef, and work from home villa?

 

[andres33]

The tax advantage in Canary Island has caducity date. It remain only 10 years. The called Zona Especial Canaria, (ZEC) will end the 31 december 2019
To be considered ZEC, companies have to fulfil the following requirements: the administration of the country must be carried in the Canary Islands, at least one of the administrators has to be a resident in the Canary Islands , commercial operations must be carried out from the Canary Islands , an investment of €50,000 (on the smaller islands) or €100,000 (on Gran Canaria and Tenerife) must be made in the first two years, and three (on the smaller islands) to five (on Gran Canaria and Tenerife) job positions must be created within six months.
Activities authirized. Need translator if you don't know spanish
https://canariaszec.com/wp-content/...ividades-incluidas-según-NACE-Rev.-2-2019.pdfIt's not dificult to find people speaking english in Canary Island. The islands live esencialy with tourism industrie.
If you don't want to have 3 employees then choose Madeira. You need only 1 employee and local office and you will pay only 5% Tax. And if you setup your company in a special zone in Funchal you will pay half of 5%. You will pay only 2,5%. And you will have substance automatically. You need an investment of €75,000. Unlike with ZEC companies in the Canary Islands, the investment doesn't have to be made in Madeira and you don't need to have an administrator in situ. The problem is the same that Canary. The end of these advantages will be 31 december 2029
.

 

[blockchain4ever]

KJK said:
Saudi Arabia - unless you want to do local business, it doesn't make much sense. For international business, UAE may be better. Also remember that if you're in Saudi, the prince can just come and do whatever. Check out what happened to the country's billionaires recently - they were arrested and taken into hotel "prison" and held until they paid a few billion to the state.
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Great country, but you can't open a bank account remotely, you need to do it in person.
To get a visa you need to convert to Islam and ask for a Visa to Mecca. Then visit one of the local branches close to Mecca while you do your Hajj. Of course if you ever go back and you get caught as an apostate, it's the death penalty.

Whether it's better or worse than UAE is a personal choice I guess.

 

[romashkavarashka]

blockchain4ever said:
To get a visa you need to convert to Islam and ask for a Visa to Mecca. Then visit one of the local branches close to Mecca while you do your Hajj. Of course if you ever go back and you get caught as an apostate, it's the death penalty.
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What are you talking about? Have you been there?
To get a visa you need proper documents and apply for it, like for any other country.

 

[KJK]

blockchain4ever said:
To get a visa you need to convert to Islam and ask for a Visa to Mecca. Then visit one of the local branches close to Mecca while you do your Hajj. Of course if you ever go back and you get caught as an apostate, it's the death penalty.
Click to expand...

Oh sure, that must be the reason why Saudi is now running a huge international campaign to attract tourists and investors into the country. I imagine every backpacker will be converting to Islam soon.

So much disinformation here... It is very similar with UAE - yes, it is not a perfect country, there is censorship and it doesn't have a constitution but that doesn't mean it is some hellhole where you should be afraid to touch your wife in public or something.

Do you even know how many non-Muslims, buddhists, christians, hindus (from Philippines, India, Nepal...) have visa and work in the Gulf countries?

 

[JohnLocke]

xzars said:
Considered Canary Islands a number of times.

Their 4% CIT comes in exchange for hiring locals (3 or 5, depending on the island), and having at least one local resident director there. Another issue is that Spaniards don't speak English well - they are worse than Romanians, Hungarians, Bulgarians. The workforce in the Baltics costs about the same but their English is better by a huge margin. It's not even comparable.

The sole use-case I see for that Canary Islands tax incentive is for an export or service business which focuses all its efforts on the Latin America region.
Click to expand...

Good information. As far as I read somewhere, if you setup any business (restaurant, fastfood or locale sales) you can be exempted from taxes but you need to be resident. What I mean, is, that if you consider to move out of your country anyway, then why not consider these Islands.

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