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What are some of the best countries for opening an LLC?

Investors around the world generally prefer the structure of a Limited Liability Company (LLC). This is because it allows them to only have limited liability up to the amount they’ve invested, which helps to manage risk.

There are various tax advantages and incentives offered by different countries, which are attractive for entrepreneurs who want to open a small business. Here Turner Little look at some of the most advantageous countries to consider when planning to open an LLC.

Opening an LLC in Hong Kong

Both private and public limited liability companies can exist here. While you’ll need a share capital, there is no minimum amount initially. In addition, share capital can be in any solid, major currency.

Investors from overseas who want to go ahead and start an LLC in Hong Kong face no restrictions in terms of becoming members of the management board or company directors.

Added to these advantages is the low tax. Corporate income tax is at 16.5 per cent, there is no VAT and no withholding taxes on interest or dividends. Hong Kong also holds duty free status, and has a policy to increase the number of double tax treaties on an ongoing basis.

Establishing an LLC in Ireland

Investors will find a very warm and welcoming business environment in Ireland, along with a good credit regime. There are government incentives for some investors. An example of this are investors who can provide and maintain high skilled jobs, among other criteria.

Ireland also enjoys a low corporate tax rate of 12.5 per cent on trading profits. Exemption from withholding tax on interest, royalties and dividends are also available.

There are two kinds of private LLCs:

  • Designated Activity Company (DAC)
  • The private company that is limited by shares (LDT)

In the same way as in Hong Kong, there is no minimum amount for initial start-up capital for either the DAC or LDT.

Ireland has already signed a certain amount of double tax treaties. These provide one taxation point for companies that get income from both their country and Ireland.

Starting an LLC in the Netherlands

There is a strong and long-standing policy of welcoming foreign investment in the Netherlands, along with a liberal and warm corporate climate.

The country offers certain kinds of investment aids, including loans for R&D projects, premiums for investors who create jobs and a special tax schedule for shipping companies. This tax regime is worked out by tonnage.

In the Netherlands, the BV is the same as a private LLC, while the NV is a public company. An advantage of starting up a Dutch BV is that there is no minimum amount when it comes to share capital. The country also has a corporate income tax rate of 20 per cent for taxable profits up to 200,000 EUR, and then 25 per cent over that.

Opening an LLC in Spain

Foreign investors are welcome in Spain in the majority of sectors. Excluded are radio industries, air transport and strategic sectors. Otherwise, there are relatively liberal rules surrounding foreign investment.

There are incentives available for artistic industries, such as cinema production or musical performances. In addition to this, there are tax credits available for companies running R&D projects.

In Spain, the private LLC is known as the SRL, and a public limited company as the SA. Foreign investors who want to start these kinds of companies in Spain, must submit a statement to the general directorate of foreign investments and commerce.

The minimum amount for the initial share capital for the SA is 60,000 EUR. For the SRL, it’s lower at 3,000 EUR. Spain also offers corporate income tax rates of 25 per cent.

We’ve presented a rough guide to setting up in different countries and as you can see, there is a huge disparity in levels of taxation. Contact us here if you would like details of many more jurisdictions and options which may be open to you.

Turner Little and its affiliates do not provide tax, legal or accounting advice. Material on this page has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.