Tax effective country and ways to reinvest company profits?

[curiousKitty]

Goal: Maximise reinvestment of profits to grow business

I heard some countries let you use profits to reinvest rather than tax them first. What are those countries? Does Singapore let you do that?

How exactly does that work? Some said there are compliant strategies like running expenses through child company, inter company loans, shareholder loans and such. I always thought when you give someone a loan it becomes capital asset on balance sheet and you still need to pay tax on loan amount.

 

[Sols]

Estonia is often brought up as the prime example of this. They only tax companies on distribution, not on profits. So long as you keep reinvesting, you pay no corporate income tax.

Georgia and Latvia have also implemented this system.

Singapore does not have this system.

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This is the probably the answer to your question.

 

[Mary P]

Yes, such a procedure exists in majority of countries and one of the best solution is Hong Kong, as they have 0% corporate and dividends tax rates.

Last edited: Apr 27, 2023

 

[jafo]

Peter Cooper said:
Yes, such a procedure exists in majority of countries and one of the best solution is Hong Kong, as they have 0% corporate and dividends tax rates.
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Who would you recommend to delve deeper into evaluating if a Hong Kong company is the correct vehicle for a trading company (buying/selling IT hardware)?

 

[Mary P]

curiousKitty said:
Goal: Maximise reinvestment of profits to grow business

I heard some countries let you use profits to reinvest rather than tax them first. What are those countries? Does Singapore let you do that?

How exactly does that work? Some said there are compliant strategies like running expenses through child company, inter company loans, shareholder loans and such. I always thought when you give someone a loan it becomes capital asset on balance sheet and you still need to pay tax on loan amount.
Click to expand...

I work in the company Fintech Harbor Consulting as a fintech lawyer, this company provides services in this jurisdiction, you can view more details via the link Hong Kong Company Registration | Company Formation in HK | Fintecharbor.com, you can also leave an application on the website or your data here in a private message (phone number, mail, telegram, WhatsApp etc.) for a more detailed consultation.

 

[NHRInvestor]

I am curious to know what strategies are available to withdraw funds from such companies without triggering the corp tax rate. For example directors loans, royalty payment etc. Does anyone have any suggesations they feel like sharing here?