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Incorporate Your Business in Europe: Where to Find the Best Tax Deal?

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Corporate tax rates vary

In Europe, corporate tax rates, as in many other sectors, are far from being uniform. Economic unity does not necessarily entail political fiscal unity, which is a good thing indeed! For otherwise it would be difficult to explain to investors who transferred their capital from Cyprus why their investment will engender more taxes.

It is as if Europe was one big single entity,  one country, where it may be more profitable to invest in the south or the north, in the east or in the center, depending on the specific attributes of the region.

In this large country, Cyprus, Macedonia, Lithuania and Latvia provide favorable tax havens in terms of deductions based on corporate profits. It would be prudent to think of installing one’s headquarters in one of these places; assuming that, once again, you take care to follow the knowledgeable advice of one or many experts in the field.

Marked differences between countries in Europe

The European Commission’s report on “Taxation Trends in the European Union” reveals the disparity in taxation between countries on the old continent. It is possible, nonetheless to discern certain categories: on one side, the neo-European countries, including certain former USSR countries, such as Estonia with a tax rate of 2%; Cyprus and Bulgaria with 10% ; and on the other hand, the ancient European countries where the tax rate varies from 23% to 36% (France).

Taxation: a key factor for success

It’s a simple, undeniable fact. Less taxes = more investment.  With this in mind, is it more profitable to invest in Europe than in the United States?  (See the article on Delaware) The problem with increasing taxation in Europe is that it does not encourage investment to renew growth.

In conclusion, some countries throughout Europe present an excellent rating. The United Kingdom, always in the lead with 2 to 4% taxation by virtue of the Agency Agreement, Ireland with 12% taxation,  Latvia with 0% taxation on income earned by subsidiaries and only 15% corporate taxation and finally Cyprus and Malta at 10% and 4% respectively due to tax credits. There are many safe havens in Europe that offer attractive tax deals.


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