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The idea of moving your business can be a daunting one, but there are numerous upsides to consider. There are many countries dotted around the world with lower levels of corporation tax, meaning that you could save a substantial amount of money on your operating costs– even when you factor in the potential expense of such a move.
According to the Tax Foundation, the US has the third-highest corporation tax rates in the world, so it’s easy to contemplate the savings you could make. If you decide to make a move, where in the world should you aim to go?
With a top rate of corporation tax of just 12.0% — which is less than half the US rate — it’s easy to see why Macau has become such a business center in recent years. A former Portuguese colony, Macau has been under Chinese sovereignty for nearly 20 years, and has flourished in this time.
A corporation tax rate of 17.0% and a low-regulation style system has meant Singapore has created a powerful reputation as a business haven. The top rate corporate tax is still nearly half of what it is in the US, and an established foreign infrastructure can help you make the transition with ease.
While there will be new laws to adapt to, the general low levels of regulation mean that there are fewer bureaucratic hoops to jump through, which is well worth taking into account.
The UK’s top rate of corporation tax of 20.0% is not the lowest in the world (though still lower than the US), but is noticeably low for a developed country. What makes the UK such an intriguing investment is the uncertainty created by the Brexit vote. The right wing of the (minority) governing Tory party have made it clear they believe the UK’s future involves styling itself as a “Singapore-style low tax, low regulation economy”. The center wing of the party disagrees, but it’s fair to say current Brexit negotiations are not going well, meaning that a “Singapore-style” economy could ultimately be born from the chaos.
There will be new-to-you laws and legislation to adapt to, meaning you may need help with key legislation, but there’s plenty of help around. If you need to figure out IR35 then expert advice and resources from Qdos Contractor will get you up to speed, while PAYE advice can be found from most accounts. Ultimately, if you prefer the idea of moving to an Anglophone country with a potentially lucrative future, then the UK might be a good bet.
Ireland has one of the lowest corporate tax rates in the world, at 12.5%. The downside is the country has a history of economic instability — the so-called “Celtic Tiger” that ultimately proved unsustainable — which may give you pause. The economy is relatively stable at the present time and notably business-friendly, so if you don’t mind the potential for future unrest, then Ireland could be a viable option.
If you want to cut your operating costs — and particularly your corporate tax rate — then any of the countries above are well worth considering.