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How to choose the proper country for opening a company

Starting a business in any country in the world has become easier than ever.

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The most important problem in our modern day is how to choose where to set up the business.

Considering each country has its own laws, any foreign investor should consider these laws when deciding on a place to start a business. This is why we have elaborated a guide on what to follow when choosing a business destination.

Company registration requirements

Starting a business, no matter the country will involve respecting various requirements. The legislation of each country will specify the following: the number of participants in a business, usually known as shareholders, the number of directors of a company, the residency requisites and the share capital. Additionally, one will also have to consider the legal address of the company and the type of structure used to register the company.

These are universal requirements which must be considered no matter the country and type of company the foreign entrepreneur chooses. Speaking about foreign entrepreneurs, there are also countries which impose special requirements for them, so the legislation must be carefully considered in these cases.

Licenses and permits for operating a business

Another important aspect when choosing a country in which to set up business must be related to the business licenses and permits to be obtained. Most countries will issue a business license once the company is registered, however this license will only certify that the business has the right to operate in that country.

For specific activities, companies will usually need other special licenses issued by competent authorities in those industries. As an example, the licensing requirements for opening a company in Spain target specific activities and their related industries.

Taxation is important when choosing a country

Another important aspect to be considered when choosing the country for opening a company is the taxation system. The aspects which must be taken into account here are often related to the corporate tax rates, the tax deductions and exemptions and the treaties signed by that specific state.

Mainly known as double tax treaties, these agreements are very important for foreign investors who can have substantial benefits in terms of corporate and personal taxation. As a tip, the Netherlands has a quite extensive double tax treaties network, apart from the advantages the local authorities offer.

Special regions for setting up businesses

One of the most common trends among countries all over the world is to create specific industrial areas for those who want to open companies. Foreigners can find these zones, usually known as free trade zones in European and Asian countries. The main advantages offered by these areas are connected to the specific activities which can be conducted and the tax exemptions offered for companies registered in them.

Opening a company these days is quite easy if you consider the lack of restrictions, however choosing a country for this company has become more difficult than it used to be. While the aspects above can help an investor make a decision, there are also other aspects to be considered, such as how large the market of that country is and if the industry one chooses offers real development opportunities. No matter the country, thorough research is mandatory.