The best countries to quickly set up your business

In business, as in life, time is one of the most valuable resources we have. Missing opportunities because of ineffective governments or because the country’s business environment does not work well (which happens quite often) can seriously hamper your company.

This is the reason that lead us to write this article, in which we will explore the 10 countries where businesses can be set up most quickly according to Inc. magazine.

The criteria used in the ranking in this magazine for the selection of counties are the Economic Freedom Index for legal certainty, the Property Rights Index, the Ease of Doing Business Index and the cost of incorporation.

The actual formation time often varies, whether it be because not all the required documents have been received, or due to bank or other authorities’ holidays that lengthen the process, because a problem arises or for any other inconvenience. The timeframes indicated here refer to the information provided by the individual state authorities, and with an intermediary service provider, it will always take longer.

Of course, we will add our own comments to the ranking on how worthwhile it may (or may not) be to start your business in the following countries.

An important aspect that you have to keep in mind: Denationalize.me does not explicitly recommend setting up a business in the countries recommended in this article only because they appear in the list. It should be you as a businessman who decides where to locate your business based on the aspects that are important to you. Speed in registering a company should not be a decisive factor if you plan everything wisely.

If, in addition to being able to do business, you want to be protected from high taxation and absurd government policies, we can help you find the best option for your specific case through our consultations.

With that being said, let us look at the list.

New Zealand

In New Zealand, it is possible to set up a business in 24 hours. Other advantages of New Zealand are the economic freedom and the “lower” tax rate in comparison to other western countries.

In terms of stability, the country ranks 4th on the Economic Freedom Index and the Property Rights Index. Corporate tax is quite high at 28% and withholding tax on dividends ranges from 0% to 33%, depending whether the shareholder is a tax resident in New Zealand or a company. The Ease of doing business in New Zealand is 86.76 out of 100, the highest score on the list.

With Limited Partnerships in New Zealand, you can also opt for a potentially tax-free company. However, this type of company requires a resident director and complex accounting. The incorporation period is also considerably longer than that of a limited partnership there.

North Macedonia

In Macedonia, it will also only take you one day to set up your business. The country ranks 53rd on the Economic Freedom Index and 31st on the Property Rights Index. On the Ease of doing Business Index, Macedonia got a score of 80.75. Both corporate tax and withholding tax on dividends is at 10%. Of course, with the right holding company, you can avoid retentions.

Macedonia is often overlooked and tends to be less bureaucratic than other Balkan states, such as Serbia, Bosnia or Kosovo. Moreover, the local banking system is quite good.

Hong Kong

Hong Kong is very close to Canada in the Property Rights Index, in 16th place. Hong Kong is also known for its economic freedom. In theory, you can set up and start managing your Hong Kong business in two days.

With regards to corporate tax, Hong Kong businesses pay 8.25% tax on the first two million Hong Kong dollars (HKD) they make – equivalent to €232,500 -. Once you have surpassed this number, the tax rate rises to 16.5%. However, this amount only applies to income from Hong Kong.

Georgia

Let us first clarify that when we are speaking about Georgia we are referring to the eastern European country and not the American state with the same name.

You can set up your business in Georgia in just two days. Moreover, your company will be in a relatively free environment given that Georgia is ranked 26th on the Economic Freedom Index.

We have already spoken about Georgia on our blog, so in summary: the standard company pays 15% on distributed profits and 5% withholding tax on dividends. It has a score of 83.73 out of 100 on the Economic Freedom Index and, with the help of our partners, setting up a company in Georgia costs between €1,300 and €1,800. It also has free trade zones and special status for software companies and many liberal professions. As a business owner, you have the option to only pay 1% tax on a certain amount of income.

Australia

Australia can also be a good option to set up a business in a short space of time and without investing a lot of time, depending on your business and preferences. However, the high taxes here continue to be a problem.

The official opening of your business in Australia can take as little as three days. Australia is number 12 on the Economic Freedom Index and number 11 on the Property Right Index, with a corporate tax that fluctuates between 25 and 30%, and a 0% withholding tax on dividends.

In the Ease of Doing Business Index, Australia has a score of 81.22 out of 100.

Portugal

It takes about 3 days to set up a business in Portugal. Portugal is below Australia on the Economic Freedom Index and the Property Right Index, in 31st place on both Indexes.

Portugal has a score of 76.47 points in the Ease of Doing Business Index, which adds to the appeal of this destination.

Taxes are relatively high on the mainland; with 21% tax on profits under 1.5 million. However, setting up a business on the island of Madeira can be very appealing. In the MIBC (Madeira International Business Center) you only pay 5% tax on profits and there is no withholding tax on dividends. It will only be possible to set up companies there under this interesting regime until the end of 2023, and you must know that the tax benefits will expire (if nothing changes) in 2027.

Setting up a business in Portugal costs €600 on average but, in Madeira, this number rises to €8,000.

Singapore

Singapore ranks first on the Economic Freedom Index and second in the Property Rights Index. In regards to the Ease of Doing Business Index, Singapore also holds second place with a score of 86.20.

Singapore has a corporate tax of 17%, but it offers a partial tax exemption for the first 200,000 Singapore dollars (SGD) of income.

A 75% partial corporate income tax exemption applies to the first SGD 10,000 of taxable income, while a 50% exemption is granted to the next SGD 190,000 of taxable income. In total, the exemption sum amounts to SGD 102,5000 (the equivalent of €68,700 at the time of writing this article). A Limited Partnership in Singapore can also be interesting although, as with the Limited, it requires a local director.

Moreover, your company will be operational in as little as 3 days, at least in the case of Limited partnerships. Personal companies tend to take longer to set up everywhere.

Extra: other Countries

Despite the fact that Inc. magazine seems very interesting to us, there are other countries whose legislation also allow you to quickly set up a business and, at the same time, can be much more appealing than destinations such as Australia or New Zealand from a fiscal point of view.

Below, we will list some countries that, in our opinion, are more interesting than those you can set up a business in just one day.

Unites States: With an American LLC considered “Disregarded Entity”, you will not pay any tax in the country. There is no company more popular among emigrants and perpetual travellers than the American LLC. At the end of the day, we are speaking about a single-person limited liability company that is tax and accounting free, with good banking options, no share capital but a high degree of anonymity and a good reputation at the same time… You cannot ask for more! It is no coincidence that we ourselves set up several LLCs for our clients every day and, of course, we invoice a large proportion of our own projects through this legal form.

In some US states, it is even possible to set up your company the same day for an additional fee. However, we recommend that you take your time and set up your company in the best state, although it may take between 7 and 10 days (in Florida, for example). In any case, do not forget that you also have to take into account the application times for the mandatory EIN: at Denationalize.me we can get you an EIN in 2 to 3 days. Other service providers need more than 2 and 3 months to deliver your EIN… and, without an EIN, you may better forget about bank accounts.

If you are looking for the fastest complete LLC training with EIN included available, you will only find it with us. Do not hesitate to contact us.

United Arab Emirates: Both free zone companies and mainland companies (the normal companies there) can be interesting. Mainland companies have a good reputation worldwide. Mainland companies do not have territorial restrictions and can sell both within and outside the country’s borders. With this type of company, you have to keep accounts and generally pay higher costs… but the flexibility, reputation and access to accounts and payment platforms are much higher. Therefore, right now we would recommend it for those who want to do serious (yet) tax-free business in Dubai. Free zones, however, are jurisdictions run independently of the state. Free zone companies can only do business within their respective free zone or outside the UAE. Licences for your company within the free zone are given based on your company’s business activity.

Establishing a business in a free zone takes about 2 or 3 weeks from the time the application is made. A continental company tends to be quicker, but it requires local presence, whereas with free zones you can set it up remotely.

Panama: Companies in Panama are exempt from tax on profits earned abroad. We have already spoken about Panama in other articles. On one hand, Panama is one of the freest countries in the world due to its interesting political system (which has no central bank and no army) its liberal gun laws, its self-sufficiency in energy and food and, lastly, its very favourable tax system. On the other hand, Panama is actively seeking qualified immigrants who want to invest in the country, and has introduced a number of attractive immigration programmes. If you run a company outside of Panama (like a LLC, for example) it will be entirely exempt from taxation and social security payments.

United Kingdom and Ireland: British and Irish LP or LLPs pay 0% tax. Ireland is stepping up to fill the gaps that Brexit might leave and, instead of targeting large companies (for which Ireland remains attractive), it is increasingly targeting smaller entrepreneurs. The recent reform of Irish company law, which radically simplifies everything, points in this direction. With this reform, Ireland is moving towards the law of England, as in the good old days. The rules are simple: ten minutes of contact a year with the Irish authorities tends to be enough. Among the main changes we find the reduction from two compulsory directors to one. Like British limited companies, there is no minimum capital to deposit in the Private Limited Company. As a limited company, it is a legal entity comparable to an SL. However, it does not have to pay a minimum capital contribution and retains full legal capacity in most countries. Although Irish Limited companies have to pay corporation tax in Ireland, the rate of 12.5% is one of the lowest in the EU.

The set-up time in both countries is usually only 2 or 3 days.

Estonia: If properly structured, an Estonian company (OÜ) can also be tax-free. The small Baltic country has finally made big progress since regaining independence from the Soviet Union 30 years ago. In the meantime, the country can undoubtedly be considered a pioneer of digitalisation throughout Europe: not only businesses, but also administration and governance are digital. Estonia is known for its E-residency, a type of identity card that allows anyone to set up and manage an Estonian company remotely. It guarantees you a tax-free salary from the Estonian company, but on the condition that you add value to the company yourself as an employee rather than carrying out purely administrative tasks (as, for example, a managing director who only manages the employees ). Perpetual travellers can also pay themselves a tax-free salary without a tax certificate. Our experience puts such a salary at around €10,000 per month.

Estonia is a country with a big reputation within the European Union and, therefore, offers many opportunities that you would not have with classic offshore companies as an investment vehicle. With an Estonian Limited, for example, you could comfortably invest in real estate inside the EU and generally have easy access to various securities accounts or other investments. Estonian companies have few obstacles in accessing investment and do not pay taxes in Estonia.

How long does it take to set up a business there? The reality is that an E-residence can set up a business in Estonia in a matter of 2 hours. However, becoming an E-resident currently takes between 4 and 6 weeks. It is possible to set up a business without E-residency, but it takes a similar amount of time. In this sense, talk of an “express” start-up for Estonian companies is more of a publicity stunt than anything else.

Mauritius: Companies classified as Global Business Companies have a partial tax exemption of 80% and, therefore, a tax burden of only 3%. However, there is a tax burden of 15% for other classifications. Moreover, a 0% withholding tax is paid on dividends. Mauritius is the Malta of the Indian Ocean, at least in regards to the fiscal system. As a British majority colony, Mauritius has a non-dom system of taxation on remittance basis similar to that of Malta. On top of that, set up times are relatively quick.