When choosing a jurisdiction for a company in Europe, you should understand that the European Union (EU) does not equal Europe. There are some countries and exclusive jurisdictions that are geographically positioned in Europe but are not part of the EU, either fully or partially, for example, Norway, Switzerland, Guernsey, the Isle of Man, Gibraltar and Liechtenstein. Some of these territories offer a low-tax regime, which may be useful for tax planning purposes. The governments of these European countries take attracting foreign investment very seriously, and will continue to invest in this area and work to increase the amount of assets invested within their borders. As well as their rapidly growing financial services and company formation industries, some of these countries are perfect destinations to visit and spend some free time in during a vacation.
Our professional lawyers and accountants will provide detailed advice on each of these jurisdictions, their tax systems and their company formation procedures. We can create a unique solution just for you, in order to help you develop a long-term tax planning programme and a corporate structure that helps you reach your personal goals.
Understanding European companies
These jurisdictions are not part of the European Union (some are partial members), so there are some regulatory differences in requirements and standards. Most of these territories do have complex legal systems; however, there are numerous corporate support services available, as they are very popular with investors and entrepreneurs seeking a low-tax regime. All of this contributes to a friendly and enjoyable environment in which to do business.
However, do keep in mind that some of these jurisdictions are not fully entitled members of the EU, so if you are looking for easy access to the common internal European market, you would be advised to consult with our team first. Usually, companies are incorporated in these jurisdictions for the following purposes:
- To establish business and act as a trading company
- To achieve a particular corporate structure and serve as a holding company
- To hold property or other assets
- To own or operate ships
- To act as an investment company
Benefits of establishing a European company
Depending on the jurisdiction, establishing and operating a European company may provide some of the following benefits:
- Business-friendly tax authorities
- Understandable, predictable and transparent taxation system
- Opportunity to incorporate and maintain your business remotely
- Low-tax regime
- Perfect environment for operating a holding company
- Countless tax and corporate planning solutions
For a solution unique to you, please contact us now. Our professional team will not only incorporate your company, but can also provide detailed consultation regarding your corporate structure and tax planning.
Most common legal structures
Most of the companies established or purchased in these jurisdictions are private or public limited companies. A substantial number of the companies that we have incorporated are private limited companies (LLCs), as this is the most common legal structure and is widely used to hold assets or perform commercial activity. However, depending on your requirements, our team can also incorporate other types of company as well.
Choosing a jurisdiction within Europe
There are several jurisdictions we can suggest to you. For example, Norway may not be the best solution in terms of tax planning, however, it offers a strong economy and therefore a stable, predictable business environment. The jurisdictions you will want to consider will depend on your own personal goals. So, before reading any further, we strongly recommend that you establish your priorities for what you want your company to achieve. That might be low taxes, a complex corporate structure, a means for holding properties and assets, the opportunity of operating in a business-friendly environment, confidentiality or something else.
The Kingdom of Norway is a Scandinavian country with a strong economy and a cool temperate climate. Currently, the Norwegian national corporate income tax rate is relatively high at 25%. However, there are no other local income taxes imposed by the counties or municipalities. The most popular company structure in Norway is the private limited liability company, known as “aksjeloven”. The minimum share capital for this type of company is 30 000 NOK, equal to approximately 4000 EUR. Norwegian joint-stock companies (“allmennaksjeselskap”) can be registered at stock markets and used for issuing public shares and for stock trading. If you are considering this jurisdiction, bear in mind that the Kingdom of Norway is not a member state of the European Union, although it has very close ties with it as part of the European Economic Area (EEA).
In Switzerland, resident companies are subject to a corporate income tax (CIT). The CIT is applied to any profits generated on Swiss territory. Corporate taxation is distributed and levied on three levels: federal, cantonal and communal. Switzerland offers an easy-to-follow incorporation procedure. The most common legal structure is a limited liability company (“Gesellschaft mit beschränkter Haftung”), which requires a minimum share capital of 20 000 CHF (~18 610 EUR). It must be pointed out that Switzerland is not a member of the EU; however, due to partial implementation of EU legislation, Switzerland is part of the internal common European market.
The Isle of Man
The Isle of Man is a British Crown-dependent, self-governing jurisdiction, lying in the Irish sea between Northern Ireland and England. Certain companies are subject to corporate income tax at the rate of 0%; however, banking businesses and land and property income are subject to a 10% tax rate. The Isle of Man can be the perfect location for establishing a limited liability company within the framework of a larger corporate structure for tax planning purposes. The Isle of Man is not part of the EU, but EU citizens are permitted to travel without a visa and to reside on the island. However, for employment purposes, a work permit is required.
In 2002, the government of Guernsey decided that in order for the island to remain competitive in the European market, an overhaul of the taxation system was required. Guernsey is now a popular destination for many offshore companies looking for a low-tax regime, although legislation in Guernsey never uses the word “offshore”. Within the EU, the island of Guernsey is part of the Customs Union and the Single Market, but it is an EU third-party jurisdiction in all other respects. The Company formation process in Guernsey can be completed remotely and even online, but must be carried out by the registered Corporate Service Provider (SCP). One extra benefit is that the company name may be in any language that uses the Latin alphabet. Currently, no corporate taxes are applied to Guernsey exempt companies, but all companies are subject to an annual flat corporate maintenance fee of 600 GBP.
Gibraltar is a British overseas territory and part of the EU, as it was a member of the European Economic Community (EEC). Taxes in Gibraltar are calculated based on income
accruing in or derived from Gibraltar, i.e. gained from a business, transaction or property situated on the territory of Gibraltar at a flat rate of 10%. To determine whether or not corporate profits have accrued in or derived from Gibraltar, local tax authorities evaluate the location of the activities that generated the profit. Currently, Gibraltar has no tax on capital gains, no wealth tax, sales tax or VAT. Bear in mind that import duty is payable on most items at a flat rate of 12%.
Jersey, or the Bailiwick of Jersey, is a United Kingdom Crown-dependent island, not far from the coast of Normandy (France). Ruled by the Crown in right of Jersey, this jurisdiction has become popular among businesses due to its low-tax regime: the standard tax rate in Jersey is 0%. Financial services companies are an exception — they are subject to a corporate income tax at the rate of 10%. To form a company, there are currently no minimum requirements for share capital, but any company requires a local registered office (we can provide this for you). In general, the incorporation procedure is mainly a formality and does not involve as much paperwork as in other jurisdictions.
Liechtenstein is renowned for offering a great opportunity to incorporate foundations. At least one member of a foundation must be a resident of Liechtenstein and the minimum capital required is 30 000 CHF (~27 942 EUR). This can be a perfect solution for holding assets and properties independently from their actual beneficial owner. A foundation offers several major benefits, including privacy protection, no enforcement of foreign judgements and rulings and no interest for beneficiaries. We can also incorporate a public or private limited liability company for you, if required.
Confidus Solutions will help you evaluate all of the possible options and choose an efficient, tailored solution to achieve your personal goals. We have many years of expertise in this area and our experienced agents and lawyers can incoroporate your business in any jurisdiction worldwide. If you require more information, take a look at our offered solutions or contact us for an offer unique to you.