Best Countries to Start Online Business 2021
online business ideas

Best Countries to Start Online Business 2021

How to incorporate online , setting up company for online business purposes and so on. Besides, I will introduce you the best countries for an internet entrepreneur to incorporate. I know that selection process is so exhausting, so I have decided to make it simplified as I’m gonna list the criteria how to select best country for your online business. we will be glad to give feedback

How to select best country for your Online Business

Before you choose best country for your online business , you need to consider a few key factors that will influence on your decision making. You are advised to think about your company and determine how you are going to run your business and then how to incorporate online. Also in the countries in which you will be participating. For digital nomads who have experience in flag theory, look to see if your flags have a relationship.

 Incorporating Online Business and Dilema with Taxation of Foreign Income Source

How do you actually evaluate and pick the best country to incorporate? Well there are several criteria that you will need to consider when deciding on the right  country to Invest in.   Whenever you are incorporating abroad, and you are from Countries Like Germany, the US, where they tax you on your foreign income source too, keep in mind that unless you are legitimately setting up an office and establishing residence of your company in the country you are incorporating, it’s very likely that your country of personal residence will have a claim on your company earnings abroad. In other word,  in a lot of countries, if you own 100% of a company that operates in a low or no tax country, but the management of that company happens in your office at home, your home country can claim  that you own a Controlled Foreign Corporation.

In case you do not want to leave your country and you are searching ways to legally minimize taxes without leaving your place  of residency than you need to be very to  plan your residency as safely as possible. Some people who do not want to leave their home countries but  want to incorporate online business in tax haven  are   looking for the host country which does not apply CFC rules and has territorial taxation system.  While this might be a short term solution, you should bear in mind a long term consequences.  At the end, if the country does not apply CFC rule, it does not free you out from your obligation to report in your home county neither does it mean that it will never  be applied cfc rules in that country. Especially, if you want to have a business in real country who is striving for global integration.

List of criteria to consider before starting an online business in offshore country

  1. Does the country have CFC rules?

CFC stands for Controlled Foreign Corporation, and refers to a company that is registered in a different country than the one the owners reside in. If the country has CFC rules, the governments will share business and banking information. This can impact your tax liabilities. You ideally want to look for a country that does not have CFC rules.

  1. Is there a DTA between the country you are doing business in and the country you are incorporating in?

Look for countries that have a DTA. You want these two flags, your resident country and your company country, to have a Double-Tax Agreement so that you are not going to be taxed twice on your income.

  1. Is the country politically and economically stable?

In areas with an unstable government, your accounts could be seized or closed. Look for a country with no political or economic unrest or instability.   Outside of the other points mentioned here, the core issue with forming a company “offshore” is that it’s a massive red X next to your business’ name for many people and entities. Some jurisdictions are directly associated with illegal activities due to lots of frauds that used that exact jurisdiction. Will your clients have a problem with where you have incorporated your business? This question is basically an extension of the first, but instead of applying it to banks, apply it your customers and potential clients.

It’s not that you are necessarily doing something illegal by operating your business an offshore jurisdiction, but the fact that others have in the past can make others skeptical.

  • Banks will need to see more information.
  • Payment processors will be more wary of your business.
  • Credit card companies may block your customers’ payments pointing to “suspicious activity”.
  • Your local tax department may decide to audit your affairs.
  1. How easily you can get merchant account to link Payment Gateway to your e-commerce store?

Does the country allow you to use an established, recognised payment aggregator (Square, Stripe, PayPal, FBA, Shopify)?   If you have e-commerce business, shopify store, or just do dropshipping business you might want to open an account for your Ecommerce business and link merchant account to your online store. Hence, when you incorporate an online business abroad you should be looking at that country’s bank infrastructure. Whether they can support a merchant  account for your online store, whether you can easily link the payment gateway to your platform. There are a lot of payment processors around, and the one that works best will depend on your industry. Most online business owners will find themselves working with one or more of these companies:

  • 2Checkout
  • Braintree
  • PayPal
  • Stripe

Of course, each country has a different list of merchant account providers. And when you begin to process larger amounts it can be worth investigating better options as even 0.5% can make a big difference at the end of the year.

 

  1. Taxes, taxes and taxes. Where is best Tax Jurisdiction of Online Business

You are looking for a tax haven I suppose. If you are here you don’t want pay high taxes and you are looking for. You need to look for countries that provide incentives for Online Business. You do not want to end up paying the same tax as you would pay in your home country.

  1. Banking for Online Businesses

Something a lot of people don’t realise is, you don’t have to bank in the same country as your company. If for example, you form a Private Limited Company in Georgia, it’s entirely possible for you to get a bank account in other Countries, like Germany.

Will it be harder to get a bank account for your business based on the reputation of the country where it is incorporated? This question has nothing to do with whether or not the country where you might incorporate your business is credible, but rather whether or not other places will be familiar with it.

  1. Resident Directors or Local Office Requirements 

Some countries require at least one local resident director. What this means is, someone who is a resident (lives or has strong ties there) of that country needs to be a legal representative of your business. In Singapore, you might pay $1500 or more per year for a nominee resident director of a Pte. Ltd. You might not want to have other person as a director for your company, then you need to pay attention on this details.Similarly, some countries have local office requirements, and they’ll actually send someone around to check once a year to make sure you’re meeting their demands.

  1. Limited Administrative Overheads and after formation cost and maintenance fees

You need to find out what are the fixed costs after formation and what are the maintenance tasks. In some countries they have fixed taxes. We don’t want you to think that you entered zero ax zone and at the end of the year you pat 40% of your income as a fixed tax right?

    9. Do you need work permit?

Ask yourself do you want to relocate to that country or not?  If the answer is yes, then you need to find how easy it is to get residency with your business activities. How easy is the procedure of getting tax residency and how much will it cost you.

If answer is no, you want to incorporate online Business without relocating to foreign country and staying at your home country than you need to find a jurisdiction that allows you to conduct business activities without any work permit required, or that jurisdiction allowing you to get residence without physical being there.

The truth is, there’s no best country to incorporate an online business. There’s no one size fits all solution to company registration. It comes down to your personal residence, company residence and your customers. I love learning about tax but will happily pay more of it to make growing and operating my business faster and easier!

Georgia has been considered one of the best countries of the world for doing a business. Hence below I analyse how and if Georgia meets above listed criteria, since I operate in Georgia at the moment. I will try to be as Objective as possible. However, as mentioned, at the end, you need to educate yourself about your country tax system, host country’s tax system and make decision on your own. Since there is not universal decision in anything, that’s why you can so far and read this part

     Not Sure Where to Start Your Online Business?

        The truth is, there’s no best country to incorporate an online business. There’s no one size fits all solution to company registration. It comes down to your personal residence, company residence and your customers. I love learning about tax but will happily pay more of it to make growing and operating my business faster and easier!

Georgia has been considered one of the best countries of the world for doing a business. Hence below I analyse how and if Georgia meets above listed criterias, since I operate in Georgia at the moment. I will try to be as Objective as possible. However, as mentioned, at the end, you need to educate yourself about your country tax system, host country’s tax system and make decision on your own. Since there is not universal decision in anything, that’s why you can so far and read this part.

The best countries to incorporate online business

1) The British Virgin Islands

The best country for an internet entrepreneur to incorporate

The British Virgin Islands (BVI) is the best place to incorporate if you are an internet entrepreneur who has a worldwide income that makes you want an offshore park. BVI has the most well-known authoritative company that includes all offshore jurisdictions. One of the most beneficial aspects of BVI International Business is that you can incorporate this inclusion into a well-known tax  jurisdiction, such as Hong Kong or Singapore. Asian banks are particularly willing to work with BVI companies.

2) Denmark

best place to incorporate company online

see the list of advantages below:

  • With Flexibility, you will get the most flexible hiring and release rules in the world, which reduces the cost of business operations above or below.
  • You can register and complete your merger in days, not weeks.
  • There are no requirements for residents for management, including the CEO and the Board of Directors.
  • No notarial acts.
  • Establishing your business in Denmark is an effective tax, compared to other Nordic countries.
  • The law of the Danish company is modern and complies with the current EU legislation.

3) Singapore

setting up company for online business

According to its strong trading and investment opportunities, the city attracts global entrepreneurs and leaders, and is named as the most competitive Asian country for starting a business. It has been considered one of the best places best place to incorporate company online . as it happen:

  • is one of the richest nations in the world,
  • is stable politically and growing economically,
  • is an easy location to do business,
  • has a strong workforce, and imposes no dividend or capital gains taxes

4) Georgia

Where to set up an International Business

advantages:

  • A company can be set up within three days
  • There are only a few licenses and permissions required
  • Withholding tax rate on dividends, interest, and royalties is only 5%
  • Special Regime for IT business makes Georgia the best country to start Online business. IT business is tax free in this country and it is not complicated to claim your tax free status. If you need help with this, keep in mind that this company is based in Georgia and we will gladly help you with this. Check below my youtube blogs.

see hereby how to establish a company in Georgia.

5) Poland

Poland is amongst the developed Central-Eastern Europe Countries, by its business climate it attracts great amount of investors and investments in country. Key investment areas consist of the following things: manufacturing, textiles, chemicals, food producing,technical and scientifically activities, retail trade, automobile sector and today’s advanced topic real estate market. Besides, economic situation is quite attractive as here is the lowest inflation rate 3.16 % fixed in the near past. Contact our partner company to set up your Polish Business easily. Poland is the best country for an internet entrepreneur to incorporate. 

6) Cyprus

registration online business in Cyprus

Cyprus is well known for the benefits it offers investors, especially in transport areas. For example, profits from Cypriot vessels’ operations are not taxed. Also, the dividends of the companies that own the ship are exempt from tax.
Cyprus has excellent infrastructure, has 2 international airports, 3 shipping port and a modern road network. This contributes to the export and import of goods.

International and multinational companies and banks operate in Cyprus, which attract small operating costs, economic freedom, and well-trained local companies that are ready to consult if needed. Pleasant weather, culture and Mediterranean cuisine attract tourists all year round.

Leave a Reply