Bulgaria has a corporate tax rate of 10%, which is one of the lowest in the European Union. Companies that operate under VAT have to pay tax on purchases at 20%. Certain services, like those related to hotel accommodation and camping, benefit from a 9% VAT rate.
With regard to political and civil freedoms, France is 1. Citizens in France experience total freedom. The majority of countries in which citizens enjoy expansive civil liberties and political freedoms are representative democracies, in which officials are directly elected by citizens to advocate for their needs and desires. Free countries are often bolstered by healthy economies and high-functioning governments. The businesses of France are 3 in terms of economic liberty. Citizens in France are considered moderately free with regards to their economic decisions. The government in this country exerts noticeable control over businesses and other economic activities. Citizens may own property and control certain financial decisions, but in many cases the government can take control over private property for state needs. In terms of journalistic freedom, the media of France is in a 2. In France, while journalists are allowed to express a variety of opinions, they are only permitted to publish those that do not oppose government or state ideology. The government in this country may have its own state-sponsored publications to further their ideas and beliefs. This is considered to be a problematic situation.
Every year over USD 1 trillion is distributed worldwide in the form of foreign direct investment. Investments by foreign investors and entrepreneurs are of significant value to the country and are seen as a sign of a healthy economic, political and legal environment. When it comes to investing your money, some countries are simply better than others. It depends on numerous factors such as the country's overall economy and growth prospects, political stability, taxation and the overall legal system, the complexity of starting a business, opening an account and the workforce.
In this article, we summarize three jurisdictions in terms of benefits and other features crucial to foreign investors. These countries have already proven their ability to attract multinationals and other investments, but when it comes to choosing the right place to invest, each country is different and might be better than others in one or more factors.
Singapore The first country to be analyzed is Singapore, which ranks 2nd among the best countries for investment and 15th among the best countries in the world in the US News Best Countries Ranking developed in cooperation with its international partners .
Located in Southeast Asia, Singapore is a bustling metropolis and home to one of the busiest ports in the world. As one of Asia's four economic tigers, the country has experienced impressive growth in recent years thanks to efficient production and manufacturing processes and innovations in the pharmaceutical and electronics industries. High GDP per capita and low unemployment make Singapore one of the wealthiest countries in the world.
Hong Kong Hong Kong is a special administrative region of China. While Hong Kong is often considered as a separate entity from China, it is not a country and therefore enters all lists and rankings under the name of China. China takes 26th place among best countries to invest in and 20th place among best countries in general.
Hong Kong’s legal system is characterised by the strict adherence to principles and the rule of law. It operates a free trade economic system and promotes minimal government interference in most sections of the economy. This reflects on the small number of tariffs and duties on traded goods and therefore it is a better place for investments than other parts of China. Foreign investments are attracted by promoting a favourable investment climate with low taxes, few restrictions and additional incentives to encourage investments. Corporate profits tax rate is 16.5% with a possibility to waive 75% of the tax. There is no tax levied on dividends. Company incorporation is a simple and fast-forward process. All applications for company incorporation also include an application for the business registry. The application can be submitted online and the processing generally takes one hour (as opposed to four days if the application is submitted in hard copy).
Due to its impressive growth and increasing immigration, Singapore attracts the best professionals to its workforce. The country offers cultural diversity and, with four official languages, is an important gateway for international trade. The corporate tax rate is 17%, but it can be reduced by taking advantage of numerous government subsidies, incentives, and other programs. Singapore's legal system is known for its integrity, efficiency and fairness, making the country better than many as a place to start and operate a business. The World Bank Group has recognized Singapore's political and regulatory environment as the most business-friendly in the world. Other factors: Least Corrupt Country in Asia; Best IP protection in Asia; Most popular country for arbitration in Asia.
United Arab Emirates The United Arab Emirates or UAE is listed as the 22nd best country in the world and is not mentioned among the best countries for investment according to the above ranking.
Before the discovery of oil in the mid-20th century, the UAE's economy was mainly based on fishing and the pearling industry. The country experienced rapid growth and general transformation along with the start of oil exports in the 1960s. Today the country's GDP can be compared to that of leading European countries and the World Economic Forum has named the UAE the most competitive place in the Arab world.
When incorporating a company in the United Arab Emirates, foreign investors can choose between offshore or onshore registration, whichever is more suitable for the type of company and the activities planned. Onshore registration means that the investor establishes a business presence on the UAE mainland. Offshore registration usually refers to a business presence in one of the UAE's free trade zones. The UAE does not levy corporate income tax at the federal level. However, most Emirates have some corporate income taxation and can even reach 55% for certain industries. In practice, corporate income tax is mainly levied on gas and oil companies and branches of foreign banks. Other factors: The UAE is among the most liberal places in the Gulf with a legal system that allows freedom of religion; No sales tax or VAT but with plans to introduce it in the future; In addition to traditional banking, Islamic (or Sharia-compliant) banking has seen tremendous growth in recent times.
Asia has a very rich cultural heritage that has been carefully nurtured through centuries of history. Today Asia is very attractive to international investors due to the fact that it has several large economic areas as well as several special areas with a thriving economy and favorable tax systems. Below is our top list of jurisdictions for international investing in Asia.
Hong Kong
Modern Hong Kong can offer a free market economy that relies heavily on international trade, the financial sector, the extent of export / import, including a fairly large proportion of re-exports. Hong Kong does not impose tariffs on imported items. Also, there are only four groups of goods subject to excise duty: high alcohol beverages, tobacco, hydrocarbon oil, and methyl-based alcohol. Currently, Hong Kong does not have any import / export quotas for anything. The Hong Kong government continues to peg the local currency (Hong Kong dollar) tightly to the US dollar, in support of an agreement signed in 1983.
The local government is actively developing the Special Administrative Region (SAR) to make it a desirable destination for mainland China Renminbi to achieve their internationalization in the business community. Residents are allowed to open savings accounts in RMB currency; In addition, Hong Kong public and Chinese government bonds were issued in RMB currency; as well as currently in the private and public sectors, RMB agreements are permitted. The Hong Kong government is working really hard right now to increase the additional use of RMB in Hong Kong's financial markets and is looking for an opportunity to increase the RMB ratio significantly.
Macau
Since establishing its local casino industry hotspot in 2001, Macau has attracted tens of billions of dollars in international investment, completely transforming the area into one of the largest global gambling hotspots. The Macau gambling and tourism industries have been heavily influenced by China's decision to relax travel restrictions on Chinese nationals looking for an opportunity to visit Macau. In 2016, Macau gambling taxes estimated over 76% of total household revenue. Macau's economy suffered quite a bit in 2009. It was a consequence of a global economic crisis, but the rapid economic growth continued somewhere until 2013. In 2015, Macau was home to approximately 31 million tourists, with an urban population of 646,800. About 68% came from mainland China. The services offered, mainly gambling, have boosted Macau's economic performance several times. Recently, however, the anti-corruption campaign carried out by the Chinese government has suffered slightly for the Macau gaming industry.
Singapore
Singapore is currently having a prosperous, well-developed free-market-oriented economy. Singapore government has hardly worked on and achieved an open and nearly 100% corruption-free government and business environment as well as strong economy, and quite high competitive (even by the Western standards) per capita GDP. Employment rates are extremely high, while the Singapore budget mostly relies on exports, specifically of consumer goods and electronics, IT & software, medical technology and devices, pharmaceuticals as well as on lively business, banking and financial industries.
Singapore is a famous destination for many international investors and entrepreneurs, especially in certain industries. According to financial analytics data it will continue to develop and evolve into Pacific Asia’s major business and high-tech hotspot. Singapore is a proud member of the 12-nation Trans-Pacific Partnership free trade agreement. It is also a part of the Regional Comprehensive Economic Partnership agreement. Back in year 2015, Singapore has established, along with the rest of the ASEAN participants, the ASEAN Economic Community.
China
Starting back in the late 70s, China has been working on it’s economy and market, rapidly going from internal government controlled closed market, to more liberal, open government planned system with profoundly internal market-oriented economy, leading to an increase of China’s impact on the global market. By year 2010, China has turned into the largest global exporter. Changes and reforms have started with slowly abandoning collectively planned agriculture, developing to introduce free-market pricing, decentralizing taxation, granting more autonomy for government-owned companies, expansions of the private sector, fast development of stock markets and introduction of a modern banking system as well as China’s access to international trade and investment.
China did undergo a number of reforms lately. During last few decades, Chinese government has renewed its support for government-owned companies in industries, which are strategic for country’s security and development. Such decision was made specifically to boost certain industries and make them more competitive on a global market. Such change of economy and the following benefits have dramatically impacted to a China’s GDP making more than ten times increase since year 1978.
Taiwan
Modern Taiwan has a prosperous free-market economy with overall decreasing government control over international investment and trade industries. Strategic production industries, such as production of electronics, machinery and petrochemicals, have given the major boost and factors necessary for rapid growth of economy. However, such factors as Taiwan’s diplomatic isolation, extremely low birth rate, and quickly aging population are several major long-term challenges that Taiwan’s government needs to face and solve.
With regard to political and civil freedoms, Syria is 3. Citizens in Syria experience little to no civil liberties and political rights. Citizens are not free to express themselves and do not enjoy political freedom or a representative government. Countries with this political situation are dangerous for investment, as an authoritarian government may have outsize control over economic matters. The businesses of Syria are 5 in terms of economic liberty. Citizens in Syria are considered not free with regards to their economic decisions. The government prohibits all economic activities by citizens, and some illegal business activities could be punishable by imprisonment or even death. Investors should avoid countries that are not free economically, as the risks do not justify any potential gain. In terms of journalistic freedom, the media of Syria is in a 5. In Syria, journalists face a very serious situation. Censorship dominates all publications and the government controls the majority of media outlets. Journalists that express opinions against the government may be punished with fines, imprisonment, or death.
Manufacturing is the largest economic sector in the world, which is also one of the most important, directly and indirectly accounting for a large part of all economic activity and all jobs worldwide. It processes items and is dedicated to either creating new goods or adding value by producing finished goods for sale to customers or intermediate goods to be used in the production process. After the industrial revolution that began in Britain a few centuries ago, labour-intensive textile production was successfully replaced by mechanization and the use of fuel. Today, manufacturing creates jobs, technological development and an increase in international investment.
For this reason, some jurisdictions are leveraging manufacturing output and value-added exports to increase their operations, business performance and revenue, and to address the challenges and opportunities that manufacturers face every day in conducting their businesses.
According to Deloitte's 2016 Global Manufacturing Competitiveness Index, China, the United States, Germany, Japan and South Korea are ranked as the top five most competitive manufacturing countries in the world. These countries generate about 60% of global manufacturing GDP.
China Canada and its provinces compete on a global scale for investments that result in low production costs, low wages for factory workers, and the adoption of globally popular product mandates. As a result, there are some significant trends in Chinese manufacturing that can easily be highlighted. These trends include creating a globally competitive, expansive manufacturing business model, helping to create a competitive business environment for manufacturing in China and increasing sales in domestic and overseas markets. This fact can encourage start-ups to grow, invest and compete with other successful manufacturing companies.
United States The United States is successful in attracting investment in many of the world's most active industries, such as aerospace, auto assembly, pharmaceuticals, to name a few. The USA has signed an agreement with Germany to implement a dual vocational training program for the advanced manufacturing sector. US business policies focus primarily on technology transfer, sustainability, monetary control, and science and innovation, giving manufacturing companies (automotive in Detroit and high-tech in Silicon Valley) a competitive advantage.
Germany Germany retains a relatively high share of manufacturing exports. The country provides long-term support in government-sponsored science labs and national programs created to foster manufacturing innovation in areas such as solar and wind power and renewable energy (renewable energy sources accounted for 28% of the country's electricity generation in 2014). In addition to an energy revolution in the manufacturing industry, the country is striving to phase out nuclear energy.
Japan Japan has a technology-intensive manufacturing sector that dominates the global manufacturing landscape in most advanced economies. The country maintains manufacturing competitiveness as there is a close link between manufacturing competitiveness and innovation. Japan has strong potential to become one of the most advanced manufacturing jurisdictions in the world. The Robot Revolution Realization Council was established in the country in 2014 as part of the Japan Revitalization Plan, introducing infrastructure and energy resources for next-generation vehicles. Japanese companies account for 50% of the global factory robot market.
South Korea As the world leader in the manufacture of liquid crystal displays (LCD), smartphones and memory chips, automobiles, and the world's largest shipbuilder, South Korea is actively pursuing growth in free trade agreements with more than 50 countries. The country invests heavily in education and produces a large number of researchers every year. It is also known that supporting manufacturing innovation in South Korea with venture capital investments to boost high-tech startups is identified as a strategic priority.
Today's international business leaders register IBCs primarily because this legal structure provides a way to run a business on a global scale while avoiding property taxes and excessive paperwork - in addition to owning offshore bank accounts or purchasing non-reportable assets such as offshore gold and foreign real estate or productive, yielding farmland in politically and economically less influential countries using cryptocurrencies. Some think low tax rates are the wave of the future.
At the same time, the jurisdictions that offer such opportunities for business owners are often referred to as tax havens or offshores. Offshore jurisdictions are often blacklisted as IBC beneficiaries are typically prohibited from doing local business - meaning they are legally unable to operate in the country where their company is based, to do business. IBC owners can use transfer pricing to allocate intellectual property and sales to achieve very low tax rates; However, this may have certain consequences as their home country will likely require them to report their involvement in offshore operations. Offshore jurisdictions may aim to generate profits by allowing business owners to hide their names while supporting illegal and harmful business activities, including warfare, drug trafficking and other harmful activities.
Depending on the jurisdiction in question, offshore company owners may take the opportunity to comply with laws that are more customer- or business-friendly than creditor-friendly. Some countries offer protection from all claims unless the transmission is deemed fraudulent. There are different types of offshore entities, so-called shell companies and shelf companies, which have been set up intentionally to carry out illegal activities. The former only exist on paper, produce nothing, and facilitate tax avoidance while disguising the identities of scammers. The latter are full-fledged entities with no activity, created to bypass the registration process while concluding quick commercial agreements with established companies.
Thirty countries are currently on the EU offshore blacklist drawn up by the European Commission. It includes countries such as Anguilla, Andorra, Antigua and Barbuda, the Bahamas, Belize, Barbados, Bermuda, Brunei, the British Virgin Islands, the Cook Islands, the Cayman Islands, Grenada, Guernsey, Hong Kong, Liechtenstein, Liberia, the Maldives, the Marshall Islands, Mauritius , Montserrat, Monaco, Nauru, Niue, Panama, Saint Vincent and the Grenadines, Saint Kitts and Nevis, Seychelles, US Virgin Islands, Turks and Caicos Islands and Vanuatu.
The consequences of a company being blacklisted or making and receiving payments from blacklisted offshore jurisdictions can be quite harsh as those involved may unknowingly engage in hostile and questionable activities such as terrorism, warfare and the search for weapons of mass destruction (Atomic programs) trigger or support. , and enter into partnerships with socially and politically dangerous terrorist organizations, human traffickers and drug cartels. Engaging in such activities may result in increased corruption in addition to charges, sanctions and a criminal record after due diligence has been conducted.
There are also certain countries on the gray list that are considered to be insufficiently cooperative, as they only partially meet the European Union (EU) and Organization for Economic Co-operation and Development (OECD) information transparency regulations and standards aimed at and comply with harmonizing corporate tax laws and aligning tax systems in EU member countries.
Such jurisdictions support greater transparency by increasing social security and committing to the internationally agreed tax standard, but have not implemented that standard to any significant extent. They are seen as an alternative to blacklisted offshores, which have neither committed to the internationally agreed tax standard nor taken steps to cooperate with the OECD.
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Thu Apr 25, 2024 2:27 am
