Do you want to start a business in a place with a low corporate tax rate?
If you plan to live there, you’ll want to be sure it also has a great quality of life—whether that means high-quality schools, superb health care, wonderful public facilities, or even something as simple as breathtaking scenery.
Even if you only plan to visit occasionally, you may still want to pick a destination that’s safe, with good health care and facilities.
Let’s take a look at some of the best low corporate tax places to live in.
Guernsey (0% corporate tax)
Guernsey has an incredible 0% corporate tax rate for most companies, though there’s also a higher 10% that applies to certain types of business (such as banking) and a 20% rate that applies to others, including cannabis businesses.
As a channel island between the U.K. and France, Guernsey has a stunning countryside and coastline. It’s an independent, self-governing British crown dependency, with a large financial industry plus a big creative and digital industry. You can automatically live in Guernsey and/or set up a business there if you’re a British citizen, and others can obtain a visa.
Most people in Guernsey speak English (the official language) though French is used for administration. A small number of residents speak Guernésiais, a Norman dialect.
Barbados (5.5% corporate tax)
With a corporate tax rate of just 5.5% (and only 1% if your company makes over $30 million), Barbados is definitely business-friendly. There’s a decent health care system, a large ex-pat community, and of course all the sun, sand, and leisure options you could want.
The main drawback is that Barbados can be very expensive. Imported brands are pricey and—unless your business is bringing in a lot of money—you may need to adjust your lifestyle accordingly.
Hungary (9% corporate tax)
Hungary’s 9% corporate tax is the lowest in the EU. There’s also a low rate of income tax, at 15%. Hungary has a well-developed urban transport systems and strong preschool and primary education. (There are also a number of international schools in the capital, Budapest.) Hungary has a lively cultural scene and a fascinating history as well.
Value-added tax is high (at 27%) so products can be expensive. There’s a lower rate of 5% for most medicines and some food products, however. Compared with other European capitals, Budapest has a low cost of living.
Gibraltar (10% corporate tax)
Gibraltar is a British territory located off the south coast of Spain. It has an incredibly strong economy, and is one of the most affluent countries in the world. If you’re a U.K. citizen, you can move to Gibraltar without a residence permit.
Gibraltar’s main language is English, although there’s also the local dialect of Llanito, which is a local form of Spanish with elements of English plus other languages. It’s small and densely populated—so if you like lots of space to roam, it may not be the right choice for you.
Cyprus (12.5% corporate tax)
In addition to having a low corporate tax rate, Cyprus is a cheap place to buy property—and it’s also easy for foreigners to do so. The average price of a house on the Greek Cypriot side of the island is around $110,000 (plus stamp duty).
If you love the sunshine, you’ll be very happy in Cyprus, with close to 340 days of sunshine every year. During the summer months (from April to October), it’s very hot and dry, so you do need to make sure you wear sunscreen.
Ireland (12.5% corporate tax—likely rising to 15% under G7 reforms)
Ireland has been ranked second in the world for quality of life, making it a fantastic choice if you’re looking for a low corporate tax country. It has a very strong education system, though it’s worth knowing that a large majority of schools are church-affiliated, with a fairly small but growing number of multi-denominational schools.
Ireland has a temperate climate, with mild, humid, and changeable weather—and typically warm summers and mild winters. It’s a popular and safe country with lots of coastline and gorgeous lakes and landscapes.
Canada (15% corporate tax)
Canada has been ranked best in the world for quality of life, due to its political stability, good job market, and strong public education system. It’s also considered to be impressively business-friendly, due to friendly tax laws, plus low levels of bureaucracy and corruption.
Canada is a large country, with almost all Canadians living in the south, where the weather is warmer. If you plan to move to Canada, keep in mind that the winter can be extremely cold in some areas—so be sure to choose carefully. Of course, if you love skiing, Canada is a fantastic place to live, with a large number of top-rated ski resorts.
Can You Run Your Overseas Business From Your Home Country … and Should You?
Some entrepreneurs choose to establish a branch of their business in a country for tax purposes, without being resident there themselves. This is certainly possible, although you’ll likely need a physical address for your business within the country so that someone can receive legal documents related to your business.
However, simply establishing a business in a different country to avoid paying taxes in your home country is seen by some people as unethical—particularly if you’ve amassed a great deal of wealth. As this author from AIS-CPA said, covering the Paradise Papers leak:
“By not paying taxes, they deprive the governments of their countries of vast sums of money that are intended to keep the systems functioning that allowed them to reach their incredible wealth and prestige in the first place.”
Ultimately, if you really want to run a business in a low corporate tax country, you may find that it’s easiest (and most ethical) for you to live there yourself. All the above countries have a great quality of living, so why not give them a try?
This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.
Kenneth W. Boyd is the Co-Founder and Chief Educator for accountinged.com, an online education provider for established finance and accounting professionals. He also runs the blog Accounting Accidentally, a one-stop-shop for insight into all things accounting.
Bloomberg Tax Insights articles are written by experienced practitioners, academics, and policy experts discussing developments and current issues in taxation. To contribute, please contact us at TaxInsights@bloombergindustry.com.