Paying corporate taxes is a necessary side-effect of doing business. However, not all corporate taxes are created equal. (For the purpose of this article, we’re going to refer to all taxes and social contributions businesses have to pay as “taxes”.)
Even though the US administration has recently lowered corporate taxes, businesses still have to hand over 27% of their revenue to the government as tax. Before you’re tempted to complain, this rate isn’t that high. According to a recent joint study by the World Bank and PwC, the global average of business taxes is 40.5%.
However, there are several countries in the world that have a lower tax rate than that. Doing business in a country that has low business tax rates certainly has its perks.
Their prices tend to be lower as well, which is a benefit even if you “only” want to import goods from that country. But if you want the full benefit of low business tax rates, you may even consider moving parts of your business there.
But if you want the full benefit of low business tax rates, you may even consider moving parts of your business there
Here’s a list of the five best countries with the lowest business taxes.
With an impressive corporate tax rate of 0%, Bahrain has the fastest growing economy in the Arab world. Petroleum processing is the most important industry in the country, but aluminium production comes in a close second. Regarding services, banking and financial services are the most significant in the country.
Bilateral trade with the US is worth around $2 billion annually, with the most important commodities being aluminium, machinery, apparel, vehicles, and agricultural products.
Along with their stunning location in the Caribbean, the Bahamas can also boast a business tax rate of 0%. The country’s main source of income are tourism and financial services, and it heavily relies on the US for most of its food and manufactured goods imports.
About 6 million US citizens visit the country each year, which provides a great opportunity to US businesses wanting to expand overseas.
Recently, the Hungarian government cut the business tax rate to 9%, and introduced several measures to make the Central European EU member state more attractive to foreign investors.
Hungary’s main import articles are vehicles, electronics, food, and pharmaceuticals. If you’re considering investing, tourism, agriculture, green industries, and manufacturing are currently on the rise as lucrative sectors.
In addition, Hungary has a highly skilled workforce and a lower wage level, which makes it a top outsourcing location for many US companies.
Located in Southeastern Europe, Montenegro has a business tax rate of 9%. Although not part of the Eurozone (not even the European Union), the country uses the euro as its currency.
Tourism and services are Montenegro’s main industries. The country relies heavily on foreign direct investment as well as export/import. The government of Montenegro is strongly in favor of US investments.
Paraguay has a corporate tax rate of 10%, which, along with its location in South America, makes it ideal for US investments. The mineral industry provides the backbone of the country’s economy, as well as the production of soybean, stevia, tung oil, and corn.
Paraguay has strong business ties to the US. Over 75 US companies are present in the South American country, and bilateral trade is currently worth over $2.1 billion.
In addition to the countries described above, several other countries employ a 10% corporate tax rate, including Macedonia, Bulgaria, Bosnia and Herzegovina, Kyrgyzstan, Andorra, and Qatar.
Although not sovereign countries, several British territories employ a 0% business tax as well. This means that you can do business with these territories at a 0% corporate tax rate, even though the mainland UK applies different rates.
This means that you can do business with these territories at a 0% corporate tax rate, even though the mainland UK applies different rates.
Currently, the territories with a 0% business tax rate are Anguilla, Bermuda, the Cayman Islands, Guernsey, the Isle of Man, and the Turks and Caicos Islands.
Whichever region of the world you choose to do business with, you’ll have to exchange payments with them.
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