Choosing a place to register a business: Europe, Asia, USA or UAE?

Opening a business in another country is becoming increasingly accessible and attractive to entrepreneurs. The choice of location for a business is determined by many factors. In this article, the Antwort Law team will look at the importance of choosing the right location to open a business in Europe, Asia, the United States of America and the United Arab Emirates.

Starting a business is a complex and responsible step that requires thoughtful decisions and analysis of various aspects. One of the most important aspects is the choice of business location. The right location can be a key factor in the successful development of a company, while the wrong choice can lead to risk and loss.

• Europe is known for its developed economy, stability and wide consumer market.
• Asia is one of the world's fastest growing economic regions. Countries such as China, India and Japan, Singapore have great potential for business development due to their huge population and rapid rate of economic growth.
• The United States attracts entrepreneurs with its large economy, broad market and innovative culture. Each state has its own advantages and disadvantages for business.
• UAE (United Arab Emirates) – one of the promising destinations for starting a business is the United Arab Emirates. The country is known for its dynamic economy, favorable business environment and low tax rates. There are several free economic zones in the UAE that offer special conditions for foreign investors, making them attractive for business development.

In the future, we propose to analyze the important factors for business in more detail to determine the location.

Opening a business in another country requires analysis of tax rates, as they can have a significant impact on the profit and efficiency of the business. We suggest considering a comparison of tax rates.

1. Europe: Business tax rates in Europe vary from country to country. For example, the corporate tax rate in Bulgaria is 10%, but Hungarian businesses are only taxed at 9%. The opposite can be seen in France, where the corporate tax rate is 25%. Poland has a rate of 19%, while the UK and Germany have rates of 25% and 15% respectively. In addition, European Union countries have different VAT rates, which also vary from country to country.
2. Asia: In Asian countries, business tax rates can vary significantly. For example, Hong Kong has a corporate tax rate of 16.5%, making it one of the lowest tax countries. Singapore has the second highest rate with a corporate tax rate of 17%, while in Japan this figure is 23.2%. China has a corporate tax rate of 25%, while India has a corporate tax rate of 25% for local companies and a foreign company is taxed at 40%. Given this, choosing a location for business in Asia requires careful analysis and consideration of tax burdens.
3. United States of America: In the United States, business tax rates can also vary depending on the region and type of business. However, it is important to note that the US tax system is on a scaled basis, which means that the level of corporate tax can change depending on the company's profits. For example, at the federal level, the corporate tax rate is typically 21%. However, each state can also set its own corporate tax rates, which can result in different overall tax rates for businesses in different parts of the country. For example, in the state of Texas the corporate tax rate is 0%, while in the state of California this figure can reach 13.3% depending on the company's profit. It's also important to consider that some locations may have additional business taxes.
4. United Arab Emirates (UAE): The tax system is different from most other countries. For example, in the UAE there is no corporate tax at the federal level for most types of business. From 06/01/2023, a 9% profit tax was introduced in the UAE, which, as a general rule, will be applied if the company’s profit exceeds the threshold of 375,000 dirhams (≈ $100,000). It is profit that will be taken into account (i.e. income minus expenses). If the company's profit is less than Dh375,000, the company will still be able to pay 0% tax.

When comparing tax rates for starting a business, it is important to consider not only the official rates, but also other fiscal factors, such as tax exemptions for certain types of activities. Entrepreneurs should conduct a detailed analysis of the fiscal conditions in each specific country or region before deciding to start a business.

Unlike tax rates, don't forget about substance. Substance, or “core activity,” describes the true nature of a business or the source of its profits. Each country may have different substance rules and requirements. For example, one country may require a certain amount of production or service to qualify as a taxable entity. In another country, the types of activities that can be recognized as a subject of taxation may be limited.

Thus, when considering the choice of place to open a business, it is important not only to take into account the level of taxes, but also to analyze the requirements for substance and its compliance with the plans and strategy of the enterprise. This will help businesses provide a more accurate understanding of overall financial costs and jurisdiction-specific responsibilities. Our team of experts are qualified in this matter, so feel free to contact us.

We also recommend paying attention to comparisons of banking services and financing.

1. Europe: In Europe, banking services are developed and accessible to businesses. Each country has its own banking institutions that provide a wide range of services, including lending, account servicing and investment services. Financial institutions in Europe can also provide financing in a variety of currencies, including the euro and other currencies.
2. Asia: The banking sector in Asian countries is also well developed and is known for its innovative approach to financial services. Banks in Asia provide a variety of business services such as lending, account servicing and financial planning advice. Many banks in Asia can handle dollars and other international currencies.
3. United States of America: The United States of America has one of the most developed banking sectors in the world. Banks in the United States provide a wide range of financial services to businesses, including lending, account servicing, investment services, and insurance. Most US banks also deal in dollars and other international currencies.
4. UAE: In the United Arab Emirates (UAE), banks provide a wide range of services for servicing corporate accounts, including: providing current account services for corporations, which allows for various financial transactions, including payments to suppliers, collection of payments from customers, payment of taxes and others monetary transactions. Banks in the UAE also offer access to electronic account management systems, allowing customers to transact in real time via the internet or mobile app. This includes money transfers, balance checks, account statements and other financial transactions. Banks provide corporate clients with access to credit products such as lines of credit, overdrafts and other credit facilities to finance ongoing activities or business expansion.

We would also like to note regarding payments in US dollars: many banks in all three regions can accept payments in US dollars. However, each specific case may have different conditions and restrictions for processing dollar payments. Entrepreneurs should contact a specific bank to obtain detailed information about the possibilities of accepting payments in dollars and possible commission costs.

Banking and financing are important aspects of any business. Each region has different opportunities and conditions that should be carefully considered before deciding to open a business. Most banks in all three regions can handle dollars, but terms and conditions may vary, so it's important to contact your specific bank for details.

We also note that in addition to traditional banks, there are various payment institutions that provide various financial services and innovative solutions for customers. In Europe and Asia, some of these include:

1. Payment Processors: This includes payment service providers that enable money transfers, bill payments, and purchases of goods and services online and offline. Examples include PayPal, Alipay, WeChat Pay, Stripe and others.
2. Electronic money: These are digital funds that can be stored and used for payments and transfers. Companies such as Revolut, TransferWise, Skrill and others provide electronic money and other financial services.
3. Mobile payment applications: These are smartphone applications that allow you to carry out various financial transactions, including money transfers, bill payments, and purchases of goods and services. Some of the most popular mobile applications are Apple Pay, Google Pay, Samsung Pay and others.

In the United Arab Emirates (UAE), the financial sector is very developed and manifests itself in various financial services and instruments. In addition to traditional banks, there are also payment systems, electronic money and mobile payment applications that provide wide access to financial services for local residents and foreign investors. Institutions such as PayPal, Alipay, as well as local fintech companies help ensure efficient and convenient use of monetary resources in the emirates.

But in relation to the United States, the financial system here is based on a developed network of traditional banks that provide a wide range of financial services to clients. Compared to alternative financial institutions, such as payment systems or electronic money, in the United States, traditional banks have a distinct advantage in providing lending, safekeeping and investment services.

We also emphasize that working with cryptocurrency is now popular in the world, so Antwort Law has made the following analysis:

1. Europe: Switzerland: Switzerland is known for its crypto-friendly stance. The country has special fintech zones, such as Crypto Valley in Zurich, where companies can operate in the field of cryptocurrencies and blockchain technologies.
   Malta: Malta has passed legislation to promote the development of cryptocurrency businesses. The country has become a popular location for startups and companies working in the cryptocurrency field.
2. Asia: Japan: Japan has recognized Bitcoin as a legal payment method and has implemented a number of regulatory measures to protect cryptocurrency users.
   Singapore: Singapore has one of the most advanced cryptocurrency infrastructures in the world. The country is welcoming to innovation and the development of the fintech industry.
3. United States of America: San Francisco, California: Formerly the center of the cryptocurrency world, San Francisco is home to many startups and companies working in the field.
   New York: New York is one of the centers of financial activity in the United States, and also has its own regulatory standards for companies working with cryptocurrencies.
4. United Arab Emirates (UAE): Dubai: Dubai is known for its openness to innovation and the latest technologies, including cryptocurrencies. The city is actively developing blockchain technologies and the cryptocurrency sector. The Dubai Cryptocurrency Trade Zone was created to promote the development of cryptocurrency startups and companies.

These examples demonstrate the diversity of approaches to the regulation and use of cryptocurrencies around the world. Before dealing with cryptocurrencies in any country, you should familiarize yourself with the relevant regulations and legislation.

Also, we would like to note that obtaining residency may be an important aspect when determining a place. Many countries in Europe, Asia, the United States of America and the UAE offer various programs and initiatives for investors and entrepreneurs seeking residency through starting a business. In this comparative analysis, we will look at the possibilities of obtaining residency through opening a business in the regions:

1. Asia: Many Asian countries have programs for investors and entrepreneurs who want to start a business and obtain residency.
   For example, in Singapore there is a Global Investor Program that allows foreigners to obtain residency by investing in business or real estate. Thailand also has a residence by investment program that allows visa and residency for investors who invest in a business or have a certain amount in their bank account.
2. USA: In the United States, there are several programs for investors and entrepreneurs who want to start a business and obtain residency. For example, the EB-5 program allows investors to become US citizens if they invest a certain amount of money and create jobs in the country. There are also other programs, such as the E-2 Investor Visa, that allow foreign entrepreneurs to obtain a visa and residency through business investment.
3. Europe: European countries also have programs for investors and entrepreneurs, although these may differ from country to country. For example, in Portugal there is a Golden Visa program, which makes it possible to obtain residency through investing in business or real estate in the country. The UK also has programs for investors and entrepreneurs that allow them to obtain residency through investing in a business or creating jobs.
4. United Arab Emirates (UAE): The UAE has various residency programs that attract investors and entrepreneurs from all over the world. For example, the UAE Golden Visa program allows foreigners to obtain residency in the country through investing in real estate or business, as well as through bank deposits or investments in funds. In addition, there are special programs for highly qualified professionals and talented individuals, offering an accelerated path to residency in the UAE.

The general trend is that many countries in different regions of the world offer programs for investors and entrepreneurs who are looking for the opportunity to obtain residency through starting a business. However, conditions and criteria may vary depending on each specific program and country. If you are interested in this issue, the Antwort Law team will be happy to help you!

Choosing a place to open a business is an important step for any businessman. Each region has its own unique characteristics and opportunities for business development. It is important to conduct a detailed market analysis and consider all the factors to make the best choice for your business.

Thus, the decision to choose a business location should be based on a comprehensive analysis of various factors. Only this approach will maximize the opportunities for successful development of an enterprise on an international scale. And in order not to make a mistake in your choice, contact the team of specialists at Antwort Law!

Olena Deilid

Junior Legal Secretary