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How to decide on the right bank for your company? Our experts will help with the best solution if the following information is provided: country of registration of the company and country of registration of the beneficiary, company description of the company's business processes, main incoming and outgoing payments, planned monthly turnover in the context of major currencies
How to choose a non-resident company? To do this, you need to understand the main semantic load. First of all, it will be a holding or operating company. Further, the main operations of the company from the point of view of counterparties (the nuances of thin capitalization rules and transfer pricing), the possibility of opening bank accounts, the corporate ownership structure of the company being created
EXAMPLES OF OUR PRACTICES
Cyprus

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Tax systemя

Residents pay income tax on income received both from sources in Cyprus and in any other countries.

Is there a special tax regime for holding companies?

No.

Minimum authorized capital for LLC

There is no requirement for a minimum authorized capital amount.

Stamp duty tax

There are 0.6% of the nominal authorized capital amount.

Legislation on controlled foreign companies

No

Corporate tax rate

12,5%

VAT rate

19%

Tax rate on outgoing payments from Cyprus


Dividends



Regular rate

0%



Tax rate on outgoing payments from Ukraine to Cyprus (according to the double taxation avoidance agreement)

Dividends



The 5% rate applies if the Cyprus company owns at least 20% of the shares or invested in such a company at least EUR 100 000;

The rate of 15% in all other cases.



«Thin Capitalization» Rules

No.   

Will interests on a loan raised for the acquisition of a subsidiary be allocated to expenses?

No.   

Is a transaction for the sale by a foreign company of its stake in a Cyprus authorized capital company subject to taxation?

No.   


Is a transaction for the sale by a Cyprus company of its share in the authorized capital subsidiary subject to taxation (capital gain tax)?

No. At the same time there are no conditions for a minimum term of ownership of shares in such a subsidiary.

Are dividends received from a subsidiary subject to taxation?

No. However, provided that no more than 50% of the activities (income) of the subsidiary is formed from passive operations (receipt of dividends, interest on securities).

Are there any requirements regarding the “doctrine of the reality of doing business” (substance requirements)?

No. However, in order to get a certificate of tax residency in order to apply the double taxation avoidance treaty in Cyprus Tax, it is necessary for the business to comply with the doctrine of «the reality of doing business».

Estonia

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Residents pay income tax on income received both from sources in Estonia and from any other countries.

 

Minimum authorized capital for LLC

EUR 2 500

Stamp duty tax

No.

Corporate tax rate

There is no income tax until distribution time.

Only the amount that is subject to distribution in the form of dividends, reduction of the share capital, expenses that do not relate to the main activity of the company, gifts or donations at a rate of 20% is taxable.

VAT rate

20%

The tax rate on outgoing payments from Estonia to a non-resident.

Dividends

Interests

Royalty

Total rate 0%

Total rate 0%

Total rate 10%

Payments to offshore companies can be blocked or taxed at the standard profit tax rate.

«Thin Capitalization» Rules

No.

 

Transfer Pricing Rules

Section 8, Part 2 of the Income Tax Act (Tulumaksuseadus, hereinafter - TUMS) stipulates that the transaction price between related parties, that is, the transfer price, is to correspond to the value of similar transactions between related parties. In other words, the transfer price is to correspond to the market price of the transaction. In case the transfer price was lower or higher than the market price, the difference between them is taxable in accordance with Tums. According to subsection 1 § 8 Tums. Related parties are those companies that have a common economic interest, or if one person has a predominant influence on another person.

No additional criteria or rules for assessing the compliance with market conditions of interests rates that apply to loans between related parties are provided by the Instructions on Establishing the Market Value of Transfer Prices (Siaksdellind turuväärtuse määramise), not issued by the Tax and Customs Board (maksu Tolliamet, hereinafter-MTA) juhend), not compiled by the OECD / OECD, "Guidelines for Determining the Market Value of Transfer Prices for Multinational Companies and Tax Administrations."

 Therefore, in this matter we have to proceed from general principles and methods, which are also applied to comparing other transactions or to obtain approval from the tax authorities for each transaction.

However, these requirements usually apply to: financial companies, transactions with companies from offshore jurisdictions, companies with more than 250 employees with a turnover of EUR 50 000 000.

Rules on controlled foreign companies

Yes, but these rules apply only to individuals who are residents of Estonia.

Is a transaction by a company from Estonia subject to taxation of its share in the authorized capital of a subsidiary (capital gain tax)?

Income from sales will be taxable only at the time of distribution of profits.

Is a transaction for the sale by a foreign company of its share in the authorized capital of a company from Estonia subject to taxation?

No.

Isit possible to get a preliminary tax clarification about a future transaction?

Yes.

Are there any requirements regarding the “doctrine of the reality of doing business” (substance requirements)?

No.

Company Reporting

Expenses are not taken into account (in the sense of reducing the amount of tax by the amount that is subject to distribution and taxation).

The company is required to keep records.

Profit reporting is to be submitted monthly by the 10th day of the next following month (if there is a distribution of profits).

VAT reporting is submitted monthly until the 20th day of the next following month.

Are non-resident directors permitted?

Directors are allowed EU residents and non-residents (may be Ukrainians or Russians).

The data of the directors and shareholders of the company appear in the register of companies and this information is open to third parties.

Nominee Directors

There are no services of nominee directors, a real director can be provided.

Corporate directors are prohibited (i.e. legal entities)

Estonian company OU (Limited liability company)Tax system

Estonian company OU (Limited liability company)Tax system Residents pay income tax on income received both from sources in Estonia and from any other countries.   Minimum authorized capital for LLC EUR 2 500 Stamp duty tax No. Corporate tax rate There is no income tax until distribution time. Only the amount that is subject to […]

Estonian company OU (Limited liability company)Tax system

Residents pay income tax on income received both from sources in Estonia and from any other countries.

 

Minimum authorized capital for LLC

EUR 2 500

Stamp duty tax

No.

Corporate tax rate

There is no income tax until distribution time.

Only the amount that is subject to distribution in the form of dividends, reduction of the share capital, expenses that do not relate to the main activity of the company, gifts or donations at a rate of 20% is taxable.

VAT rate

20%

The tax rate on outgoing payments from Estonia to a non-resident.

Dividends

Interests

Royalty

Total rate 0%

Total rate 0%

Total rate 10%

Payments to offshore companies can be blocked or taxed at the standard profit tax rate.

«Thin Capitalization» Rules

No.

 

Transfer Pricing Rules

Section 8, Part 2 of the Income Tax Act (Tulumaksuseadus, hereinafter - TUMS) stipulates that the transaction price between related parties, that is, the transfer price, is to correspond to the value of similar transactions between related parties. In other words, the transfer price is to correspond to the market price of the transaction. In case the transfer price was lower or higher than the market price, the difference between them is taxable in accordance with Tums. According to subsection 1 § 8 Tums. Related parties are those companies that have a common economic interest, or if one person has a predominant influence on another person.

No additional criteria or rules for assessing the compliance with market conditions of interests rates that apply to loans between related parties are provided by the Instructions on Establishing the Market Value of Transfer Prices (Siaksdellind turuväärtuse määramise), not issued by the Tax and Customs Board (maksu Tolliamet, hereinafter-MTA) juhend), not compiled by the OECD / OECD, "Guidelines for Determining the Market Value of Transfer Prices for Multinational Companies and Tax Administrations."

 Therefore, in this matter we have to proceed from general principles and methods, which are also applied to comparing other transactions or to obtain approval from the tax authorities for each transaction.

However, these requirements usually apply to: financial companies, transactions with companies from offshore jurisdictions, companies with more than 250 employees with a turnover of EUR 50 000 000.

Rules on controlled foreign companies

Yes, but these rules apply only to individuals who are residents of Estonia.

Is a transaction by a company from Estonia subject to taxation of its share in the authorized capital of a subsidiary (capital gain tax)?

Income from sales will be taxable only at the time of distribution of profits.

Is a transaction for the sale by a foreign company of its share in the authorized capital of a company from Estonia subject to taxation?

No.

Isit possible to get a preliminary tax clarification about a future transaction?

Yes.

Are there any requirements regarding the “doctrine of the reality of doing business” (substance requirements)?

No.

Company Reporting

Expenses are not taken into account (in the sense of reducing the amount of tax by the amount that is subject to distribution and taxation).

The company is required to keep records.

Profit reporting is to be submitted monthly by the 10th day of the next following month (if there is a distribution of profits).

VAT reporting is submitted monthly until the 20th day of the next following month.

Are non-resident directors permitted?

Directors are allowed EU residents and non-residents (may be Ukrainians or Russians).

The data of the directors and shareholders of the company appear in the register of companies and this information is open to third parties.

Nominee Directors

There are no services of nominee directors, a real director can be provided.

Corporate directors are prohibited (i.e. legal entities)

Montenegro

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General features

Montenegro

Type of company

Limited liability company (DDO).

 

Public Information

• Directors

• Owners

• Share capital

• Promotions

 

Number of directors

 
 

At least 1 director of any nationality (private individual).

 

Number of owners

 
 

At least 1 owner of any nationality (individual or company).

 

Registered capital

 
 

Minimum EUR 1.

 

Opening an account in Montenegro

 
 

Obligatorily.

 

Personal presence at a company registration

 
 

Company can be registered by the power of attorney.

 

Personal presence for opening a bank account

 
 

Mandatory presence of the director.

 

Work permit

 

The director is obliged to obtain a work permit (work permit turnkey cost is EUR 1 000, term - 30 days ( CIS nationality is possible). The minimum wage of the director at full rate is EUR 193 tax payment of it is EUR 130.

 

Company registration costs

 

EUR 2,000 (the price includes renting a legal address). Purchase of ready-made new companies from EUR 5,000.

Opening a bank account EUR 500. Banks options: Erste Bank, OTP Bank, NLB Bank, Hypotekarna Banka. Two accounts opening is recommended( EUR 800 for two accounts).

 

Monthly accounting support

Min EUR 350 per month (accrual and salary payment, distribution of profit and VAT bills, contracts preparation, reporting, contracts translation into the local language for banks. Should be it necessary - communication with the Tax - and other authorities).

New company registration time

10 working days.

 

Income tax

9%.

Dividend tax

9%.

Capital gains tax

No.

VAT (there is a prerequisite for registration by the payer)

21 % - from 2018.

Availability of double taxation treaties (CIS countries, EU countries)

Yes.

Company Reporting

 

Financial reporting

 

It is required:

• annual report (annual report and financial statements must be submitted to the tax office);

• report on VAT and hiring (submitted monthly);

• rrofit tax report (submitted annually).

 

Audit of financial statements

Required.

 
Czech

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Tax system

Romano-Germanic system of law.

Residents pay income tax on income received both from sources in the Czech Republic and from any other countries.

Is there a special tax regime for holding companies?

No.

Minimum authorized capital for LLC

CZK 1.

Stamp duty tax

No.

Income tax rate

19%.

VAT rate

21%

The tax rate on outgoing payments from the Czech Republic in favor of a non-resident

Dividends

Interests

Royalty

Offshore jurisdiction rate of 35%

Regular rate of 15%

On the parent company in the EU 0%

Offshore jurisdiction rate of 35%

Regular rate of 15%

On the parent company in the EU 0%

Offshore jurisdiction rate of 35%

Regular rate of 15%

 

In the case of payment to a specific country, it is necessary to take into account the terms of the Double Taxation Treaty, which may lead to an increase / decrease of the income tax rate on outgoing payments.

Since 01.01.2016 the rules for tracking profit tax evasion (GAAR) have been introduced, therefore  payments to the parent companies even in the EU are monitored and studied by using a reduced rate.

Tax rate on outgoing payment from Ukraine to the Czech Republic

Dividends

 

Interests

Royalty

5% if the company owns at least 25% of the Ukrainian company. In other cases, 15%.

 

5%

10%

«Thin Capitalization» Rules

Loans received and provided to related parties are to correspond to the proportion of debt to the size of the authorized capital of no more than 4:1. Interests on contracts for participation in the company's profit is not fully included into expenses.

 

Transfer Pricing Rules

Yes, such legislation is sufficiently developed and applies to related parties. It is possible to conclude transfer pricing agreements. Companies are considered related if one company shares in, or exercises management control over another company, which provides sufficient control of the company and the ability to influence relationships that could violate the “outstretched arm” rule. Agreements with companies from offshore zones are automatically considered as related.

Rules on controlled foreign companies

 

No

Is a transaction by a Czech company selling its share in the authorized capital subsidiary  subject to taxation (capital gain tax)?

No, provided that the subsidiary is not from an offshore jurisdiction and the Czech company has owned a share of at for  least a year.

In case the rule is not observed, it is taxed at the general income tax rate.

Is a transaction for the sale by a foreign company of its share in the authorized capital of a Czech company subject to taxation?

Yes, at the usual income tax rate. But if a parent company selling its share in a Czech company is located in the EU, then the exemption applies to the Parent and Subsidiary Directive.

 

Is it possible to get a preliminary tax clarification about a future transaction?

Yes, but only for some transactions.

Has this jurisdiction been registered in the list of offshore zones of Ukraine?

No.

Is this jurisdiction included in the list of countries of Ukraine for transfer pricing?

No.

Are there any requirements regarding the “doctrine of the reality of doing business” (substance requirements)?

Yes, it is possible to apply the general rules against tax evasion (GAAR).

Company Reporting

The company is required to keep records and submit financial statements. VAT reporting is submitted quarterly.

Are non-residents directors allowed?

Directors - the residents of the EU and citizens of other countries are allowed on the condition of obtaining of employment permition.

Nominee Directors

Nominee directors are not available.

Corporate directors are not permitted.

 
Turkey

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Singapore

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Tax system

Residents pay income tax only on income derived from sources in Singapore (territorial taxation principle).

Is there a special tax regime for holding companies?

No.

Minimum authorized capital for LLC

The standard authorized capital is SGD 1,000.

There are no requirements for mandatory payment and the establishment of a minimum and maximum size.

Tax on the increase in the amount of authorized capital (capital duty)

No.


Alienation tax (stamp duty)


0.2% of the transaction price or the market value of shares

Legislation on controlled foreign companies

No.

Corporate tax rate

The income tax rate is - 17%.

Moreover, 75% of the first profit of the company in the amount of up to SGD 10 000 (USD 8 200) and 50% of the following SGD 290 000 (USD 237 000) is exempt from income tax.

A registered company that conducts business outside of Singapore and does not conduct cash flows through Singapore is exempt from income tax (non-source income).

Rate the goods and services tax (GST)

7%

Singapore tax rate for outgoing payments

Dividends



Total rate 0% in all cases.




The rate of taxes on outgoing payments from Ukraine to Singapore (according to the double tax treaty)

Dividends



5% (if a Singapore company owns through direct ownership at least 20% of the shares).



«Thin Capitalization»  Rules

No.

Transfer Pricing Rules

Yes, from 2019 such rules will apply. The tax office issues guidelines for the preparation of such documentation, forming separate requirements for each country. The rules establish pricing requirements under the “outstretched arm” rule. In case of violation of these rules, the Tax office may charge 5% of the fine on the annual turnover of the company.

Will interest on a loan raised for the acquisition of a subsidiary be allocated to expenses?

Yes.

Is a transaction for the sale by a foreign company of its share in the authorized capital of a Singapore company subject to taxation?

No.


Is a sale transaction  of the Singapore -based company its share in the authorized capital of the  subsidiary taxable (capital gain tax)?

No. Until May 31, 2022  such a tax is not levied, provided that the Singapore company owned at least 24 months a share of 20% in such a subsidiary. If this requirement is not met, sales revenue will be subject to ordinary income tax.


Are dividends received from a subsidiary subject to taxation?

Yes. But in case if the funds were transferred to Singapore.

Are there any requirements regarding the “doctrine of the reality of doing business” (substance requirements)?

No, but in order to receive a certificate of tax residency in order to apply the double taxation avoidance agreement, it is necessary that the business comply with the doctrine of the reality of doing business.

Has this jurisdiction been included into the list of offshore zones of Ukraine?


No.

Has this jurisdiction been included into the list of countries of Ukraine for transfer pricing?

Yes.

Is it possible to get preliminary tax clarifications about an upcoming transaction?

Yes.

Company Reporting

The company is required to maintain an accounting report and an annual audit. A company may be exempted from an audit obligation if the following 3 criteria are met:

  • during the financial year there have been no legal entities in the company of shareholders;

  • the number of shareholders does not exceed 20 people.

  • The company's annual turnover is less than 

USD 4 000 000.

Are nonresident founders allowed?

Yes. A Singapore company may be established by an offshore company.


Are non-resident directors permitted?

One of the directors must be a Singapore resident (or have an employment visa in Singapore).

Company directors and shareholders are listed on the Singapore Company Register  and this information is open to third parties.

Beneficiary data are not entered in the register.

Nominee Directors

Nominee directors are allowed.

Corporate directors are prohibited.

Poland

Tax system Romano-Germanic system of law. Residents pay income tax on income received both from sources in Poland and from any other countries. Is there a special tax regime for holding companies? No. Minimum authorized capital for LLC. Zł 5 000 ( EUR1 2000). Stamp duty tax 0.5% of the nominal size of the authorized […]

Tax system

Romano-Germanic system of law.

Residents pay income tax on income received both from sources in Poland and from any other countries.

Is there a special tax regime for holding companies?

No.

Minimum authorized capital for LLC.

Zł 5 000 ( EUR1 2000).

Stamp duty tax

0.5% of the nominal size of the authorized capital.

Income tax rate

19%. 

VAT rate

23%

The tax rate on an outgoing payment from Poland to a non-resident

Dividends



19% 



In the case of payment to a specific country, it is necessary to take into account the terms of the Double Taxation Treaty, which may lead to an increase / decrease in the income tax rate on outgoing payments. Payments to offshore jurisdictions may be blocked.

The tax rate on the outgoing payment from Ukraine to Poland

Dividends



5% if the company owns at least 25% of the share of an Ukrainian company. In other cases, 15%.



«Thin Capitalization» Rules

The 1: 1 rule applies, that is, the loan amount should equal the size of the authorized capital. If the loan amount to be provided by a related party is greater than the specified rule, then the corresponding interests on such part of the amount will not be included into expenses.

The tax payer may choose another alternative method of calculation, namely, the interest that may be attributed to expenses should not exceed: (I) the cost of assets multiplied by the base rate published by the Polish Central Bank and (II) the cost which corresponds to 50% of operating profit for current year. If the tax payer chooses an alternative method of calculation, then this method applies to loans from the bound parties and from third parties over the past 3 years.


Transfer Pricing Rules

Yes, such legislation is sufficiently developed and it is possible to obtain clarifications from the tax service, and it is also possible to conclude transfer pricing agreements. Companies are considered bound if one company shares in/or exercises managerial control over another company, which provides sufficient control of the company and the ability to influence relationships that could violate the “outstretched hand” rule. Agreements with companies from offshore zones are automatically considered as related. Additionally, in the case of the conclusion of agreements with foreign companies for an amount that exceeds EUR 300 000 per year, it is necessary to separately clarify the tax form in the established form.

Rules on controlled foreign companies

Poland’s residents - individuals are to pay 19% income tax received by a non-resident company in which: (I) the registered address is located in the country referred to the offshore zone or (II) the registered address is located in the country with which Poland has not concluded a tax information exchange agreement.


Is a transaction for the sale by a Polish company of its share in the subsidiary authorized capital  a subject to taxation (capital gain tax)?

Yes, at the usual income tax rate.

Is a transaction for the sale by a foreign company of its share in the  authorized capital of a Polish company a subject to taxation?

Yes, 1% of the market price that the buyer is to pay.

Is it possible to receive a preliminary tax clarification about a future transaction?

Yes, but it may take approximately3 months.

Has this jurisdiction been registered into the list of offshore zones of Ukraine?

No.

Is this jurisdiction included into the list of countries of Ukraine for transfer pricing?

No. 

Are there any requirements regarding to the “doctrine of the reality of doing business” (substance requirements)?

Yes, it is possible to apply the general rules against tax evasion (GAAR).

Company Reporting

The company is obliged to keep accounting and submit audited statements.

VAT reporting is submitted quarterly.

Are non-resident directors permitted?

Directors - residents and the citizens of other EU countries are allowed, yet under the condition of their obtaining of an employment permition.

Nominee Directors

Nominee directors are not available.

Corporate directors are not permitted.

UAE

Tax system There is no tax system. Payment is charged annually for the appropriate license that the company is to pay to the state. Minimum authorized capital for FZE, FZCO On average, depending on the specific free zone, USD 6 000. Tax on the increase in the share capital (capital duty) No. Rules on controlled […]

Tax system

There is no tax system. Payment is charged annually for the appropriate license that the company is to pay to the state.

Minimum authorized capital for FZE, FZCO

On average, depending on the specific free zone, USD 6 000.

Tax on the increase in the share capital (capital duty)

No.

Rules on controlled foreign companies

No.

Corporate tax rate

0%

Tax rates for outgoing payments from the UAE to a non-resident


Dividends



0%



Payments to offshore companies may be blocked due to bank compliance.

«Thin Capitalization» Rules

No.

Transfer Pricing Rules

No.

Company Reporting

There are no requirements for the submission of financial statements, but optionally, the preparation of financial statements in accordance with IFRS is possible.  

Are non-resident directors permitted?

Allowed, but for this a working visa is requiered.


Nominee Directors

Nominee directors are not available.

Netherlands

Tax system Residents pay income tax on income received both from sources in the Netherlands and in any other countries. Is there a special tax regime for holding companies?  No. Minimum authorized capital for LLC There is no requirement for a minimum authorized capital amount. Stamp duty tax No. Legislation on controlled foreign companies No. […]

Tax system

Residents pay income tax on income received both from sources in the Netherlands and in any other countries.

Is there a special tax regime for holding companies? 

No.

Minimum authorized capital for LLC

There is no requirement for a minimum authorized capital amount.

Stamp duty tax

No.

Legislation on controlled foreign companies

No.

Corporate tax rate

20% on profits up to EUR 200 000, and 25% on profits above 

EUR 200 000.

VAT rate

21%

The rate of taxes on outgoing payments from a Dutch company


Dividends



The usual rate of 15%.

0% (if payments are in favor of the EU company)





The rate of taxes on outgoing payments from Ukraine to the Netherlands (according to the double taxation treaty)

Dividends



The 0% rate applies if the Dutch company owns at least 50% of the shares and invested in such a company at least USD 

300 000; The rate of 5% if the Dutch company owns at least 20%; The rate of 15% in all other cases.



“Thin Capitalization” Rules

The «thin capitalization» rules were canceled on January 1, 2013, but some other restrictions were introduced.

It is forbidden to charge interest on loans in an amount that exceeds EUR 750 000 (there are exceptions). In addition, there are some restrictions on the allocation of interest on loans from related parties.

Will interests on a loan raised for the acquisition of a subsidiary be allocated to expenses?





Yes, but with the rule of «thin capitalization».

Is a transaction for the sale by a foreign company of its share in the authorized capital of a Dutch company subject to taxation?

No.


Is a transaction for the sale by a Dutch company of its share in the authorized capital of a subsidiary a subject to taxation (capital gain tax)?

No, and at the same time there are no conditions for a minimum term of shares ownership in such a subsidiary.

Are dividends received from a subsidiary a subject to taxation?

No, provided that the Dutch company owns at least 5% of share in such a subsidiary.

Has this jurisdiction been registered into the list of offshore zones of Ukraine?

No.

Is this jurisdiction included ino the list of countries of Ukraine for transfer pricing?

No.

Are there any requirements regarding to the “doctrine of the reality of doing business” (substance requirements)?

Dutch companies whose activities during the financial year mainly consist of the payment or receipt of interests, royalties, lease payments from companies that are not registered in the Netherlands but belong to the same taxpayer group and must support the requirements for the reality of doing business.

For Dutch companies that receive only dividends, this requirement does not apply.


Company reporting

The company is obliged to keep records according to the standards of the Dutch GAAP / IFRS rules and submit annual reports.

Preparation of an audit report will be necessary if over the past 2 financial years 2 out of 3 conditions are met below the specified conditions:

 • The company's assets exceed EUR 4 400 000;

 • The company's total turnover is EUR 8 800 000;

 • The average number of employees is 50 or more.

Nonresident founders allowed?

Yes, an offshore company can set up a Dutch company.

If there are more than two shareholders in a company, then a board of directors is necessarily to be formed.

Are non-resident directors permitted?

Resident directors allowed.

The data of the directors and shareholders of the company appear in the notarial act on the establishment of the company, and this information is open to third parties.

Nominee Directors

Nominee directors are allowed.

Corporate directors are allowed.

New Zealand

Tax system Residents pay income tax on income received both from sources in New Zealand and in any other countries. Is there a special tax regime for holding companies? No. Minimum authorized capital for LLC There is no requirement for a minimum authorized capital. Tax on increase in the amount of authorized capital (stamp duty […]

Tax system

Residents pay income tax on income received both from sources in New Zealand and in any other countries.

Is there a special tax regime for holding companies?

No.

Minimum authorized capital for LLC

There is no requirement for a minimum authorized capital.

Tax on increase in the amount of authorized capital (stamp duty / capital duty)

No.

Legislation on controlled foreign companies

Yes, but these rules apply to the physical persons of New Zealand residents.

Corporate tax rate

28%

The 0% rate applies only to New Zealand companies that act as trusts that manage trusts registered outside the territory of New Zealand. And if the founder of the trust is not a New Zealand resident, then the trust is also not taxed.

Rate the goods and services tax (GST)

15%

The rate of taxes on outgoing payments from New Zealand

Dividends



Regular rate

30/15/0%




The tax rate on outgoing payments from Ukraine to New Zealand (between the countries there is no agreement on the avoidance of double taxation).

Dividends




15% rate



«Thin Capitalization» Rules

Yes, it is necessary to clarify in each case, but as a rule, the debt should not exceed 75% of the assets of the company.

Transfer Pricing Rules

Yes there are, according to OECD standards. This is not necessary, but as a rule they check documentation confirming pricing according to the “outstretched hand” rule.

Will the interests on a loan raised for the acquisition of a subsidiary be allocated to expenses?

No.

Is a transaction for the sale by a foreign company of its share in the authorized capital of the New Zealand company a subject to taxation?

No.


Is a transaction for the sale by a New Zealand company a share  in the authorized capital of the subsidiary a subject to taxation (capital gain tax)?

Not. Such a rule exists only in relation to real estate located in the territory of New Zealand.

Are dividends received from a subsidiary a subject to taxation?



Yes.

Are there any requirements regarding to the “doctrine of the reality of doing business” (substance requirements)?

No, but in order to receive a certificate of tax residency in order to apply the double taxation avoidance agreement, it is necessary that the business complies with the doctrine of the reality of doing business.

Has this jurisdiction been registered into the list of offshore zones of Ukraine?

No.

Is this jurisdiction included into the list of countries of Ukraine for transfer pricing?

No.

Is it possible to get preliminary tax clarifications about an upcoming transaction?

Yes.

Company Reporting

The company is obliged to maintain accounting in accordance with IAS / IFRS standards and annually submit accounting. reporting

Are non-resident founders allowed?

Yes, a New Zealand company can be established by an offshore company.

Are non-resident directors permitted?

One of the directors must be a resident of New Zealand (or Australia).

The data of the directors and shareholders of the company appear in the NC register of companies, and this information is open to third parties.

Beneficiary data are not entered in the register.

Nominee Directors

Nominee director services are prohibited (but nominee director services are used).

Corporate directors are prohibited.

Malta

Tax system Anglo-Saxon system of law. Residents pay income tax on income derived both from sources in Malta and from any other countries. Minimum authorized capital for LLC EUR1500  Capital duty tax No Income tax rate The income tax rate is – 35%. After receiving dividends, a shareholder of a company may demand from the […]

Tax system

Anglo-Saxon system of law.

Residents pay income tax on income derived both from sources in Malta and from any other countries.

Minimum authorized capital for LLC

EUR1500 

Capital duty tax

No

Income tax rate

The income tax rate is - 35%.

After receiving dividends, a shareholder of a company may demand from the tax service to return part of the tax paid by the company (usually in the proportion of 6/7), which as a result affects the effective income tax rate, which exits 5-10%.

VAT rate

18%

Tax rate on outgoing payment from Malta in favor of a non-resident

Dividends

Interests

Royalty

Total rate

0%

Total rate

0%

Total rate

0%

Payments to offshore jurisdictions must be agreed in advance with the auditors.

Tax rate on outgoing payments from Ukraine to Malta (according to the double taxation avoidance agreement)

Dividends

Interests

Royalty

5% applies if the company owns at least 20% of the Ukrainian company.

The rate of 15% in all other cases.

10%

10%

«Thin Capitalization» Rules

No

Transfer Pricing Rules

No

Rules on controlled foreign companies

No

Is a transaction for the sale by a Malta company of its share in the authorized capital of a subsidiary taxable (capital gain tax)?

No, a subsidiary is considered to be one in which at least 10% is owned by a Maltese company, or an amount of  EUR 1 200 000 has been invested.

Is a transaction for the sale by a foreign company of its share in the authorized capital of a Malta company subject to taxation?

No


Is it possible to get preliminary tax clarifications about an upcoming transaction?

Yes

Is this jurisdiction in the list of offshore zones of Ukraine?

No

Is this jurisdiction included in the list of countries of Ukraine for transfer pricing?

No

Are there any requirements regarding the “doctrine of the reality of doing business” (substance requirements)?

No, but it is recommended that such conditions to be created for the company.

Company Reporting

The company is required to keep records in accordance with IFRS standards and submit annual audited statements.

VAT reporting is submitted quarterly.

Are non-resident directors permitted?

Directors are allowed EU residents and non-residents (there may be Ukrainian citizens). An employment permition is not required.

Nominee Directors

There are no services of nominee directors (only real directors). Ukrainian citizen may be appointed Director.

Corporate directors are allowed.

Malaysia

Tax system Mixed system of law (much is taken from the Anglo-Saxon system of law with the Muslim law). Residents pay income tax on income received in the territory of Malaysia. Only income received from international activities in the field of banking services, insurance, and the operation of air and water transport is taxed in […]

Tax system

Mixed system of law (much is taken from the Anglo-Saxon system of law with the Muslim law).

Residents pay income tax on income received in the territory of Malaysia. Only income received from international activities in the field of banking services, insurance, and the operation of air and water transport is taxed in Malaysia.

Malaysia has a federal structure, and in addition to other federal states and territories, Malaysia includes the Federal Territory of Labuan. Previously, Malaysia was a colony of Great Britain, therefore,  English in Malaysia is recognized as official.

Since 1990, Labuan is an international business and financial center with relevant tax preferences.

Labuan Legislation:

  • The Labuan International Business and Financial Centre (Labuan IBFC). 

  • Labuan Companies Act 1990

  • Labuan Business Activity Tax Act 1990

  • Labuan Trusts Act 1996

  • Labuan Foundations Act 2010

  • Labuan Limited Partnerships and Limited Liability Partnerships Act 2010

  • Labuan Financial Services and Securities Act 2010

  • Labuan Islamic Financial Services and Securities Act 2010

  • Labuan Financial Services Authority Act 1996

Minimum authorized capital for LLC

MYR 100 ( USD 24)


Capital duty tax

No, but a one-time fee is paid upon registration of the company in the amount of MYR 1000 (USD 243) for capital up to MYR 50,000.

MYR 2000 (USD 486) for capital over MYR 50,000 to MYR 1,000,000.

Stock transfer tax (stamp duty)

0.3%  is to be paid by Malaysian companies  only (Labuan is released).

Corporate tax rate

  1. The tax rate for Malaysian companies is 24%;

  2. The tax rate for trading Labuan companies is 3% (those

              conduct ing trading operations);

  1. The tax rate for holding Labuan companies is 0% (shares ownership, investments, loans).

SST bid

(Sales tax and service tax)


6%  for servicesand and 10% for goods 

The tax rate on outgoing payment (withholding tax) from Malaysia in favor of a non-resident

Malaysian companies

Dividends



0% 



Labuan companies are free from such taxes

0%



In case of payment to a specific country, it is necessary to take into account the terms of the agreement on avoidance of double taxation, which may lead to a reduction in the tax rate on outgoing payments. The benefits of such agreements apply to Labuan companies, except Australia, Chile, Germany, India, Indonesia, Japan, Luxembourg, the Netherlands, Spain, Sweden, Seychelles, and Great Britain.

Payment for services provided outside of Malaysia is not considered to be a tax subject.

The tax rate on outgoing payments (withholding tax) from Ukraine to Malaysia.

Dividends



15%




The treaty of the USSR with Malaysia of 1987 is currently valid.

However, a new treaty was signed in 2016, but has not yet been ratified by Ukraine. The following rates will be provided for under this agreement: dividends -5% / 15%, interest - 10%, royalties - 8%.

Currency Control Rules

The Central Bank of Malaysia supervises the currency exchange operations of the Malaysian Ringgit (MYR) with other currencies.

Repatriation of capital, income, dividends, interest, royalties is allowed without restrictions.

«Thin Capitalization» Rules

Yes, but only to Malaysian companies such rules began to apply from the beginning of 2019 and are based on OECD recommendations and the rules on counteracting the erosion of the BEPS tax base. The amount of interest payable to related companies will be limited. But while the size of such restrictions is not accepted.

Transfer Pricing Rules

The annual reporting rule applies only to large taxpayers with annual revenues of MYR 3 000 000 000.

In many respects, these rules are aimed at operations in the territory of Malaysia and related foreign companies.

Information on transactions (loans) with related foreign companies should be reflected in the annual tax reporting of the company.

Rules on controlled foreign companies

No

Is a sale by a Malaysian (Labuan) company subject to taxation of its share in the authorized capital of a subsidiary (capital gain tax)?

Trading companies levy such income at a rate of 3%.

Holding companies are free from capital gain tax.

Such a tax also applies if real estate (or shares of a company that owns such real estate) is alienated in Malaysia.

Requirements for the real presence of Labuan companies (substance requirements)

Since the beginning of 2019, requirements for a real presence have been introduced:

1. For trading companies, you must have at least 3 full-time employees and company operating expenses per year should be at least MYR

3,000,000 (USD 729,000)

2. For holding companies it is necessary to have at least 2 full-time employees and the company's operating expenses per year should be at least MYR

50,000 (USD 12,500).

Staff may be located in any other country. The director’s salary is exempt from taxes in Labuan, and with 50% of the managers’ salaries, taxes must be paid to the social fund.

In case of non-compliance with these minimum requirements, Labuan companies will be subject to the tax regime of Malaysia (income tax 24%).


Is a transaction for sale by a foreign company of its share in the authorized capital of a Labuan company subject to taxation?

No


Is it possible tp receive a preliminary tax clarification about a future transaction?

Yes

Is it included into the list of CMU countries where the income tax rate is 5% lower than in Ukraine1?

Yes

Is it included into the CMU list of countries with offshore status?

No

Company Reporting

The holding company is required to keep records in accordance with local Malaysian Private Entities Reporting Standards (MPERS) and submit simple accounting statements. A trading company must submit audited statements annually.

Are non-resident directors permitted?

Yes. Directors — the residents  of the other countries are allowed.

Data on directors and shareholders is not publicly available.

Nominee Directors

Nominee directors services are available.

Corporate directors are prohibited (i.e. legal entities).

Hong Kong

Tax system Residents pay income tax only on income received from sources in Hong Kong. Revenues from sources from any other countries are tax deductible. Is there a special tax regime for holding companies? No Minimum authorized capital for LLC There are no requirements for a minimum amount, as a rule the declared authorized capital […]

Tax system

Residents pay income tax only on income received from sources in Hong Kong.

Revenues from sources from any other countries are tax deductible.

Is there a special tax regime for holding companies?

No

Minimum authorized capital for LLC

There are no requirements for a minimum amount, as a rule the declared authorized capital of HKD 10,000 from which only 1 share of a nominal value of HKD 1.00 is issued.

Tax on the increase in the amount of authorized capital (capital duty)

No. If the capital is HKD 10,000 divided by 10,000 ordinary shares at HKD 1.00 per each share.

If the authorized capital exceeds specified, then 0.1% of the amount exceeding HKD 10,000 is charged. However, the tax amount may not exceed HKD 30,000.

Legislation on controlled foreign companies

No

Corporate tax rate

16,5%

8.25% reduced rate for the first HKD 2 000 000

VAT rate

No

Hong Kong outgoing tax rate


Dividends



Regular rate

0%



Tax rate on current payments from Ukraine to Hong Kong (no double taxation avoidance agreement)

Dividends



15%



«Thin» Capitalization Rules

No, but when paying interest, you must pass a test to confirm that the interest paid does not come from profits in Hong Kong.

Transfer Pricing Rules

There are small requirements for transactions between the related parties. Hong Kong is preparing to implement OECD rules regarding shopping centers, however they will apply to Hong Kong companies that meet at least 2 out of 3 requirements:

• annual income exceeds 100 million NK (12.8 million USD);

• assets exceed 100 million NK (12.8 million USD);

• employees of more than 100 people.

Is there legislation on controlled foreign companies?

No 

Will the interests on a loan raised for the acquisition of a subsidiary be allocated to expenses?

No

Is a transaction for the sale by a foreign company of its share in the UV of a Hong Kong company taxable?

No, provided that the origin of the payment is not from Hong Kong.


Is a transaction by a Hong Kong company selling its share in a UV subsidiary (capital gain tax) taxable?

No, and at the same time there are no conditions for a minimum term of ownership of shares in such a subsidiary.

Is it possible to receivea preliminary tax clarification about a future transaction?


Yes

Is this jurisdiction in the list of offshore zones of Ukraine?

No 

Is this jurisdiction included in the list of countries of Ukraine for transfer pricing?

Yes

Are there any requirements regarding the “doctrine of the reality of doing business” (substance requirements)?

Yes, in order to obtain a certificate of tax proof, you must comply with the rules of «the reality of doing business».

Company Reporting

The company is required to keep records in accordance with HK FRS standards and annually submit reports and conduct audits.

Are nonresident founders allowed?

Yes, an offshore company can set up a Hong Kong company.

Are non-resident directors permitted?

Yes, they are allowed, but in order to be recognized as a tax resident, one of the directors must be local.

The data of the directors and shareholders of the company appear in the register of companies, and this information is open to third parties.

Nominee Directors

Nominee directors are allowed.

Corporate directors are allowed.

Hungary

Tax system Residents are to pay an income tax on income received both from sources in Hungary and from any other countries. Minimum authorized capital for LLC HUF 3 000 000 (USD 11 400). Capital duty tax One-time payment for the registration of HUF 100 000 (USD380). Subsequently not charged. Income tax rate VAT rate  […]

Tax system

Residents are to pay an income tax on income received both from sources in Hungary and from any other countries.

Minimum authorized capital for LLC

HUF 3 000 000 (USD 11 400).

Capital duty tax

One-time payment for the registration of HUF 100 000 (USD380). Subsequently not charged.

Income tax rate VAT rate 

9%.

In addition to an income tax, municipalities may add a maximum of 2% tax on various activities of the company.

(50% of royalties may be exempted from income tax).

VAT rate

27%

The tax rate on outgoing payments from Hungary to a non-resident.

Dividends

Interests

Royalty

Total rate 0%

Total rate 0%

Total rate 0%

Payments in favor of EU blacklisted jurisdictions may be a subject to additional administrative controls.

Tax rate on outgoing payment from Ukraine to Hungary (according to the double taxation avoidance agreement)

Dividends

Interests

Royalty

5% if the company owns at least 25% of the Ukrainian company. In other cases, 15%

10%

5%

«Thin»  Capitalization Rules

The 3:1 rule applies to borrowed funds not received from financial companies / banks.

Transfer Pricing Rules

Yes, such rules exist and reflect the general requirements of the Organization for Economic Co-operation and Development (OECD) "Guidelines for determining the market value of transfer prices for multinational companies and tax administrations."

Transactions with related parties must take place under market conditions.

Rules on controlled foreign companies

A controlled foreign company is a company in which a Hungarian company owns a stake of more than 50% and whose income is taxed at a rate lower than the rate in Hungary.

Will  the interest on a loan received to acquire a subsidiary be charged to expenses?

Yes, interest will be charged to expenses, subject to the «thin capitalization» rules and transfer pricing rules.

Is a transaction for sale by a Hungarian company of its share in the authorized capital of a subsidiary taxable (capital gain tax)?

The income from the sale of a subsidiary is not subject to taxation in Hungary, subject to the following requirements: 1) a minimum ownership interest of 10%; 2) The Hungarian company timely declared to the tax authorities of Hungary the acquisition of a subsidiary (within 75 days), 3) the shares of the subsidiary, the Hungarian company has owned for at least 1 year.

If the subsidiary is a controlled foreign company (CFC rules), then no capital gains tax exemption applies.

From 01.01.2018, the requirement of 10% minimum participation in the daughter does not apply.

Is the transaction for the sale by a foreign company of its share in the authorized capital of a Hungarian company taxable?

No (provided that the Hungarian company does not own real estate, otherwise the tax rate is 9%).


Is it possible to get preliminary tax clarifications about an upcoming transaction?

Yes

Are there any requirements regarding the “doctrine of the reality of doing business” (substance requirements)?

No

Are the funds a subject to taxation upon liquidation of a company in Hungary?

No

Has this jurisdiction been registered into the list of offshore zones of Ukraine?

No

Is this jurisdiction included in the list of countries of Ukraine for transfer pricing?

No

Company Reporting

The company must keep records in accordance with GAAP standards (if the parent company maintains records in accordance with IFRS standards, then the Hungarian company can also keep records in accordance with IFRS).

Mandatory audit reports only if the annual income of the company exceeds HUF 300 000 000 (USD 1,139,000) or the company has more than 50 employees.

VAT reports are submitted either monthly or quarterly by the 20th day of the month following the reporting period.

For what period can losses be posted?

Losses can be set off up to 50% of the profit margin. Losses can be set off for 5 years.

Are non-resident directors permitted?

Directors are allowed EU residents and non-residents (there may be Ukrainians). A work permit is not required.

Nominee Directors

There are no services of nominee directors, a real director can be provided. Corporate directors are prohibited (i.e. legal entities).

Britain

Tax system Anglo-Saxon system of law. Residents pay income tax on income received both from sources in the UK and from any other countries. Minimum authorized capital for LLC 100 pounds, while there is no requirement to pay the authorized capital (declared authorized capital). Stamp duty tax No Corporate tax rate Income tax rate is […]

Tax system

Anglo-Saxon system of law.

Residents pay income tax on income received both from sources in the UK and from any other countries.

Minimum authorized capital for LLC

100 pounds, while there is no requirement to pay the authorized capital (declared authorized capital).

Stamp duty tax

No

Corporate tax rate

Income tax rate is 19%

VAT rate

20%

The tax rate for an outgoing payment from the UK to a non-resident.

Dividends

Interests

Royalty

Total rate 0%

Total rate 20%

Total rate 20%

In the case of payment to a specific country, it is necessary to take into account the terms of the Double Taxation Treaty, which may lead to an increase / decrease in the income tax rate on outgoing payments. Payments to offshore jurisdictions may be blocked.

«Thin» capitalization rules

For British companies, it is permissible if the borrowed funds from a related company, in relation to the size of the authorized capital, did not exceed a 3:1 proportion. In addition, the % rate should be based on the market conditions. In case of excess, the interests that are paid will not be charged to the expenses of the company.

Transfer Pricing Rules

Yes, such legislation is quite developed and it is possible to obtain the clarifications from the tax service, as well as conclude transfer pricing agreements. Companies are considered to be related if one company has an equity interest in, or management control over another company, which provides a sufficient control of the company and the ability to influence the relationships that could violate the “outstretched hand” rule.

Rules on controlled foreign companies

Exist but concern only citizens of Great Britain.

Is a transaction by the UK company selling its share in the authorized capital of a subsidiary taxable (capital gain tax)?

No, but the company that is being sold is to be a trading company.

Is a transaction for the sale by a foreign company of its share in the authorized capital of a company from the UK subject to taxation?


No


Is it possible to receive a preliminary tax clarification about a future transaction?


Yes

Are there any requirements regarding the “doctrine of the reality of doing business” (substance requirements)?

No 

Company reporting

The company is required to keep a bukh. accounting. Taxation is carried out based on the annual results of the company.

At the end of the fiscal year, the company is to prepare an accounting report and report to the register of companies.

VAT reporting is submitted quarterly.

Are non-resident directors permitted?

Allowed directors are residents of the EU and citizens of other countries.   

Nominee Directors

Nominee directors services are available.

Austria

Tax system Residents pay income tax on income received either in Austria or from any other countries. Minimum authorized capital for LLC The minimum authorized capital is 35,000 Euro. It is to be paid throughout the year. Capital duty tax Stop out Corporate tax rate 25% .The mandatory minimum tax per year is 1750 Euro. […]

Tax system

Residents pay income tax on income received either in Austria or from any other countries.

Minimum authorized capital for LLC

The minimum authorized capital is 35,000 Euro.

It is to be paid throughout the year.

Capital duty tax

Stop out

Corporate tax rate

25% .The mandatory minimum tax per year is 1750 Euro.

VAT rate

20%

 

The tax rate on outgoing payments from Austria in favor of a non-resident.

Dividends

Interests

Royalty

Total rate is 27.5%.

Reduced rate for the EU is 0%

(only in case of following to substance rules).

Payment to individuals is 27.5%, to companies -is 25%, for EU countries and Switzerland is 0%

Total rate is 20%

In case of the payment to a specific country, it is considered to be necessary to take into account the terms of the agreement on the avoidance of double taxation, which may lead to a reduction in the tax rate on outgoing payments.

Payments to offshore companies may be blocked.Interests.

The tax rate on outgoing payments from Ukraine to Austria.

Dividends

Interests

Royalty

5% if the company owns at least 10% of the Ukrainian company. In other cases, 10%

5% regular rate

2% for commodity credit (equipment)

0%

«Thin» capitalization rules?

The interests paid on the intragroup loans are not included in expenses, provided that the recipient does not pay income tax or tax rate of less than 10%, or all tax liabilities of less than 10% (including cases of tax compensation to shareholders, which leads to a decrease in income tax rate lower than ten%).

There are no formal rules for «thin» capitalization, the usual principle of an outstretched hand is applied (this is usually the ratio of debt to capital between 5: 1 and 10: 1).

Transfer pricing rules

The principles of the OECD guidelines and the special commentary issued by the Ministry of Finance (Verrechnungspreisrichtlinien 2010, VPR 2010) apply in this work. In general, tax authorities consider transactions from the point of view of their actual content, and not the form of implementation, therefore it is imperative that the rule of «an outstretched» hand between counterparties is observed. As Related parties are considered to be the companies that have a common economic interest, or if one person has a dominant influence over another. Preliminary pricing agreements with the tax authority are permitted. Transaction advice is available from the Ministry of Finance.

Rules on controlled foreign companies

It is absent, but in the case of receiving dividends from a foreign subsidiary, there is no automatic exemption or application of a reduced tax rate, but the opportunity to charge the tax paid in the country of the subsidiary's location to expenses.

Is the transaction by a company from Austria to be the subject to the taxation of its share in the authorized capital of a subsidiary (capital gain tax)?

Yes, at the same time, losses from the sale can be attributed to expenses, but provided that the Austrian company owned a share of at least 10% for at least 1 year.

Is a transaction for the sale by a foreign company of its share in the authorized capital of an Austrian company subject to taxation?

No

 

Is it possible to get a preliminary tax clarification regarding to a  future transaction?

Yes

Has this jurisdiction been registered into the list of offshore zones of Ukraine?

No

Has this jurisdiction been included into the list of Ukraine for transfer pricing?

No

Are there any requirements regarding to the “doctrine of the reality of doing business” (substance requirements)?

No

Company reporting?

The company is required to keep records. Taxation is based on the annual results of the company.

At the end of the fiscal year, the company must prepare an accounting report. If the company is considered to be small, subject to 3 conditions: no more than 50 employees, assets no more than 4.84 million Euros, and 9.68 million Euros turnover for the previous two years, then the company should not conduct an audit.

VAT reporting is submitted monthly.

Are non-resident directors allowed?

EU resident directors are allowed.

Nominee directors?

There are no services of nominee directors, only real directors can be provided who are required to control the activities of the company, because they bear their personal administrative and criminal responsibility.

Corporate directors are prohibited (i.e. legal entities).

 
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