Reducing the volume of applied taxes and securing confidentiality aren’t the only advantages of setting up an offshore company in a tax haven. Although tax planning is one of the major advantages offered by offshore companies, the chance to greatly reduce business expenses and maintenance costs is also a very attractive benefit.
Below you will find the six main benefits of incorporating an offshore company in one the tax havens listed here:
Incorporating a company in tax haven provides a legal means to reduce the corporate taxes levied, and this is usually one of the main arguments for relocating your business to an offshore. Non-resident companies can enjoy a low-tax regime depending on the jurisdiction of incorporation. Bear in mind that international tax regulations can be extremely complex nowadays, and it is essential to consult with an experienced tax specialist. It is vital to ensure that there are no conflicts with corporate tax obligations in the jurisdiction where the business actually operates.
In some tax haven jurisdictions, non-resident companies are not obliged to make public any financial documentation or private information relating to directors and shareholders. Most offshore jurisdictions will not pass on any of this information to third parties, including other countries, unless the individual is suspected of involvement in criminal activity.
Usually, there are no strict requirements or obligations regarding company management, so the directors and executive staff may make decisions remotely, using power of attorney or nominee services. The need for staff and physical premises may be met by the elegant and cost-effective solution of virtual office services.
Many offshore jurisdictions can be used as valuable corporate tools for asset protection. Typically, offshore legal entities are used for holding intellectual property rights or real estate investments.
Comparing onshore and offshore jurisdictions, offshores usually offer a faster and more straightforward company incorporation procedure. Annual maintenance is usually easier and cheaper as well, making company registration and maintenance much more affordable.
Lower minimum share capital requirements
Incorporating an offshore company usually requires only a very small amount of share capital, and in certain tax haven jurisdictions there are no capital requirements at all, allowing you to minimise the cost of incorporation.
Austria is a sophisticated and prosperous business centre, which serves as a trading bridge between Eastern Europe and Balkans. Austria welcomes foreign investors and rather than combating offshore countries, Austria makes tax treaties with them. In addition, tax-minimizing structures are developed for all types of companies, which allow the effective tax rate to be only 3-5%. These are only few of numerous benefits of company formation in Austria.
Choosing the right business structure may have critical consequences therefore it is highly important to explore all the available options before making this decision. Below are four most popular types of companies available for formation in Austria:
Joint stock company (Aktiengesellschaft) is designed for large businesses and its minimum share capital is 70,000 EUR. The capital is divided into shares and can be offered to the public. One shareholder is needed to start joint stock company and his or her liability is limited by the contribution to the capital.
Limited liability company GmbH (Gesellschaft mit beschränkter Haftung) is the most popular type of company in Austria. The minimum share capital is 35,000 EUR from which 17,500 EUR or more must be deposited at the moment of registration and each shareholder must contribute with at least 7,000 EUR to the starting capital of the company. Shares of this type of company cannot be traded to the public.
General partnership is formed by two or more corporate bodies or individuals with the same economic objective. Important to note, that all individuals participating in formation of general partnership have full liability for the company's debts as well as have equal rights in managing the partnership. No minimum capital contribution is set for general partnerships.
Limited liability partnership can be formed if there is at least one partner with full liability on company's debts and can make major business decisions and at least one partner with his or her liabilities limited by the contributed capital and has no decision power.
Procedure of company formation in Austria
The number one action for all new entities is to receive a confirmation from the Economic Chamber saying that the company is indeed a new enterprise. Then a document called Articles of association is drafted by a lawyer before a notary and a starting capital is deposited in a bank account and a confirmation deed of the funds is received.
After the above things are done, the company formation process can be started at the local court. For this process shareholders need to deposit following documents:
Application of registration;
Notarized declaration of establishment;
Articles of association;
Confirmation deed that the starting capital is deposited in the bank;
Specimen signatures of the board of directors.
After around seven days, when the business entity is registered at the local court and the information is published at the local newspaper, the company can be registered with the local Tax Office. There you will need to fill an application and declare the Articles of association, certificate of company registration at the local court and specimen signatures of the company representatives. In exchange, Tax Office issues a VAT number and tax identification number.
The last steps include registration in the Trade Register, registration with the municipality and finally – registration of company's employees with the social security authority.
The average time needed to set up a company in Austria is 21 days, from which the most time – 12 days – is spent waiting for a tax identification number (the official deadline to obtain the tax identification number is 1 month).
A foundation is a non-profit organization whose primary purpose is charitable and/or research-related. The actual scope of permissible activities for foundations varies significantly between jurisdictions, but the general goal of any foundation is to serve the common good without seeking profit. Foundations base their work on the appropriate distribution of donated assets. These assets can be collected both publicly and privately.
Today, however, foundations are often used as a means of protecting assets. So here we are discussing offshore foundations used for wealth management. In this sense, foundations are commonly used to accept transfers of foreign funds and assets (including assets such as real estate, intellectual property, bank deposits, company shares, investment portfolios, etc.). Foundations are recognized as independent legal entities and combine the characteristics of corporations and trusts.
There are a variety of legal consequences for foundations, depending on the legal system in which they are registered. In some countries, foundations are prohibited from conducting business of any kind; in some, e.g. Germany, an economic activity is permitted if it serves the main purpose of the foundation. In the US, the law distinguishes between private foundations (which distribute the donations of specific individuals) and community foundations (which distribute public donations). Private foundations have more control over their charitable activities, but also receive fewer tax benefits.
Functions of a foundation
The main function of a foundation is to engage in charitable work and to distribute donations. An additional aim is to raise the assets needed for these donations and to choose recipients. Assets can be acquired either privately (from specific individuals) or publicly (from the general public). Public donations are usually collected with the aid of publicity campaigns and advertising. Some jurisdictions also allow foundations to obtain assets from business activity, if it can be proven that this economic activity is of a truly non-profit nature.
There are a number of functions that are prohibited to foundations, the main one being economic activity aimed solely at generating a profit. In some jurisdictions, e.g. Italy, foundations are also prohibited from dedicating their charitable activities to purposes other than those declared upon registration.
The Republic of Poland, or simply Poland, is located in Central Europe and is part of the European Union. While the founding of the Polish state dates back to 966, Poland regained its independence in 1989 and began its journey to the advanced economy it is today. Poland is the eighth largest and is considered one of the most dynamic economies in the EU. It also has a leading school education system in Europe. Poland offers its citizens free university education, a universal healthcare system and state-funded social security. It is also a member of the Schengen area, NATO, the OECD and the United Nations.
Poland is considered one of the most successful countries in the transition from communism to a market economy. The return of democracy was followed by the liberalization of the economy, the privatization of small and medium-sized state-owned companies and rapid growth in the private sector. Poland is the leading producer and exporter of apple concentrate and one of the leading producers of cabbage, berries and carrots. In addition to agriculture, the most important economic sectors in Poland include coal mining, mechanical engineering and shipbuilding, glass, iron and steel production as well as food and beverage processing and the textile industry.
It is estimated that around 36% of foreign investment goes into manufacturing. Other attractive sectors for foreign investment in Poland are logistics and transport, financial services, and IT and data transmission. Thanks to the growth of the Polish economy, the real estate market has also attracted the attention of both local and foreign investors.
Polish company for IT and software development
IT and software development sector in Poland is among the most vital and robust industries with good fundamentals as well as further growth prospects. Polish IT sector is considered to be a leader in the region with the demand for qualifying IT engineers constantly growing. The main reason and at the same time the benefit of setting up an IT business in Poland is its vast human capital – high quality IT engineers.
Poland tends to distinguish itself in terms of IT graduates – approximately 40 thousand young people each year receive a top quality higher education in IT and software development. The high quality of IT education is proven by numerous international programming competitions and rankings, such as Top Coder. Polish IT specialists are demanded not only locally but are also highly demanded abroad. Other benefits of setting up an IT business in Poland are high product quality and low production and workforce costs in comparison to other countries.
These are the main reasons, why such companies as Microsoft, Google, HP and IBM have opened their offices in Poland and other foreign companies are located in all biggest cities of Poland. Currently, two most popular cities for IT businesses are Warsaw and Wroclaw. Although some of the world’s biggest technology companies have entered Polish market, there are still plenty of opportunities and perspectives for the IT and software development in Poland. One of the reasons, why this sector is still highly encouraging is the rapid development and new products, such as mobile solutions, cloud computing and Blockchain technologies. Additionally, Poland offers certain state aid for investors and Special Economic Zones are developed to provide investors with the entire technology infrastructure.
If you are considering starting a business in Poland and are looking for the most advantageous and profitable ideas, below are some of the most attractive sectors and the benefits they can offer.