5 best countries for IT business
Invented the idea of your business or business has already begun to work, and you want to grow further? The resources surrounding you are not optimal - expensive rent, complexity of doing business, high wages of employees, difficult access to large amounts of electricity and underdeveloped IT infrastructure? Let's think about the future of your business together. Based on a variety of criteria, such as ease of registration and business, effective ways to protect intellectual property, the level of taxation and international trade, the degree of state support and security of business, the level of availability of electricity grids and competitive IT infrastructure, I selected the top 5 countries and collected feedback from successful companies with business, representative offices or just partners in these countries. Based on these data, a rating and recommendations were compiled, which I will gladly share with you.
South Korea rarely comes to mind when the idea arises to open a business abroad. At the same time, according to various sources, the economy of South Korea is at 11-15 place in the world ranking and is one of the fastest growing.
You should go to South Korea if you need unlimited access to the power grids, and your business is focused on international customers. In South Korea, you can get high tax breaks if you register your business in one of the free economic zones, and also have the opportunity to develop large projects that require a large IT infrastructure, and you can also easily connect to large power grids.
At the same time, registering your own business in South Korea, as well as leading it, is worth a lot of effort. Despite the fact that, on average, the registration of your own business takes 1 week, you can hardly do without the help of third-party assistants. Conduct all the talk, fill out forms and come up with the name of the company you will only have in Korean.
')
Since 2014, South Korea has started issuing the so-called startup visa. These are entry visas for foreign entrepreneurs opening an IT business. In order to get a Startup visa, you must have: a university degree with a bachelor's degree and above, and also own at least a part of a share in any intellectual property.
South Korea is a rare symbiosis of stability and a fast-growing economy. The other side of stability is strict rules and laws, including in business. Sometimes you have to literally fight with Korean partners, while agreeing the terms of the contract. Any comments from our side are perceived as disrespect. However, later I understood what was the matter, and at first began to recommend attracting local Korean consultants to the talks, who told about the peculiarities of doing business in this country.
The best way to make your business effective in South Korea is to make acquaintances. Much is solved through personal connections. At the same time, the possibility of making new acquaintances is strongly limited by the weak penetration of the English language. If you have at least basic knowledge of Korean, this will be an undeniable advantage.
According to local customs, it is not recommended to approach and introduce yourself to a stranger, it is better if you are introduced by a mutual friend. If you are lucky enough to be represented, do not forget to bow to your new Korean friend, thus you will show your respect and knowledge of etiquette. And when they give you a business card, make sure that you take it with two hands or at least with your right hand, and with your left hand you support the elbow of your right hand, which contains the business card. Happened? Congratulations, you have a first friend and your chances for a successful business in South Korea have increased significantly.
Recommendation:
I recommend the jurisdiction of South Korea to the publisher of computer online games, because the infrastructure capabilities allow you to deploy IT structures of unlimited complexity, and proximity to the largest Asian producers of online games, gives access to human resources and inexpensive labor combined with a high level of skills. At the same time, close proximity, knowledge of the peculiarities of the mentality and business processes will help to obtain licenses for the localization of games in your country with a greater degree of probability. South Korea has acceded to all the basic conventions for the protection of intellectual property, so that we can easily guarantee the protection of intellectual property to our clients in most of the world’s territory.
How easy it is to register a business in Hong Kong, as difficult to conduct it. Partly due to differences in mentality, partly due to the high competitive environment in the IT field. But still, this country is one of the leaders in attractiveness for conducting IT business, let's see why.
You can register a company in Hong Kong at www.investhk.gov.hk . To register, you will need to choose the name, type of company, as well as pay 200 euros for an annual certificate for doing business or 540 euros for a three-year certificate. You will also be required to make a contribution to the wage fund for the disabled in the amount of 25 or 75 euros, for an annual or three-year certificate, respectively. To register a company, you also need 1,000 euros to form the company's share capital.
In this case, you do not even need to live in Hong Kong. For the operation of your company, you can rent an office address with secretarial services for a small fee and this will be enough to have your own business.
Opening a business in Hong Kong gives you unlimited access to the most crowded market in the world - the Chinese. It is Hong Kong that is an ideal place for IT business, if you consider China as the most priority direction of development.
You can easily gain access to the power grid and be able to receive the required amount of electricity, so your equipment will definitely not experience problems with a lack of electrical power.
Taxation in Hong Kong deserves special attention. If you are going to provide services in Hong Kong, you will be asked to pay income tax of 16.5% to the local treasury. In comparison with global rates, this is not a bad result. But if you provide services anywhere in the world outside Hong Kong, you will not pay anything, the income tax rate in this case is 0%.
Despite all the benefits of starting a business in Hong Kong, it’s hard to call this country the easiest to do business. In Hong Kong, you will not receive such strong government support for your business as in other countries from our rating. Nevertheless, the benefits that can be obtained from registering a business in this country are likely to outweigh all the other disadvantages.
Recommendations:
I recommend the jurisdiction of Hong Kong to the company, one of whose activities is the development and production of electronics in China. Carrying out the production of electronic goods in China and, for example, supplying them to Europe or Russia, your income tax rate will be 0%. Opportunities for the international registration of patents for engineering development will ensure the protection of patent rights to manufactured products throughout the world, so you will have all the necessary tools to protect against counterfeit.
Singapore is rightly firm middling rating. He is not a leader by any particular criterion, however, I will not attribute him to the lagging countries either. Except for one criterion, about which below.
This is a country with fairly light business conditions. For this indicator, Singapore is second only to one participant in the rating, which turned out to be the winner in the overall standings.
You can become the owner of your business within 1-2 days after submitting the documents for registration, and in order to form the authorized capital you only need an amount not exceeding 1 euro. For online registration, the Singapore government recommends using one of two resources: www.bizfile.gov.sg or www.acra.gov.sg. And in order to find any legislation on activities in this country, it is not necessary to buy legal systems and contact local lawyers, you can use the free online search service for the necessary legislation on the website sso.agc.gov.sg
Singapore has about 50 international treaties for the avoidance of double taxation, and also makes considerable efforts to improve legislation and tools for the protection of intellectual property. Therefore, Singapore is waiting for companies engaged in the development of software, games and other objects of intellectual property and is taking steps to attract such companies into its jurisdiction.
And also, at a sufficiently high level, protection of minority shareholders of companies (owners of small shares) is implemented, so it is possible without particular concern to invest in Singapore companies by acquiring even small shares or a small number of shares.
Despite the high level of government involvement in attracting the IT sector and protecting intellectual property, the IT infrastructure in this country did not catch up with the leaders of our rating, although it has the potential for development and growth.
Presence of infrastructural features, as well as peculiarities of entering the business to the international level, I would recommend Singapore for companies engaged in local business related to the IT sector and the production of intellectual property. For the development of international business, there are more attractive countries in our ranking.
Recommendations:
I recommend the jurisdiction of Singapore to software companies that provide services in the field of graphic design, website development.
To register a business in Denmark, compared to other countries, more effort will have to be spent. Although as before, there is nothing difficult in this, according to this indicator, Denmark turned out to be the weakest link.
In this case, you can register a business in Denmark in 5 days. To do this, you can apply online at virk.dk (I hope you have already learned Danish?) Or go to the tax office and fill out a questionnaire. No preparatory steps and document collection required.
If you want to register as an individual entrepreneur you will need a residence permit. In the questionnaire you will be asked to indicate your full name, residence permit, type of the proposed activity, as well as details for communication and sending correspondence.
And if you register a partnership or a limited liability company, as well as a joint stock company, you will be required to draw up a memorandum of association, articles of association and other corporate documents that founders or shareholders may deem necessary. Be careful when registering a business as an individual entrepreneur or partnership, you will have personal unlimited responsibility for the results of doing business.
After you register your business, its management will be more friendly than registration. The system is designed in such a way that government agencies direct you in the right direction without having to learn all the intricacies of domestic legislation. Do you have a small business? You can not hire an accountant, just keep the receipts and at the end of the year, go to the office of the audit firm, so that it puts a check mark - reporting is ready. The state will independently send you all the necessary invoices for payment by mail, so you can not worry that you have forgotten to pay a fee. Denmark is the undisputed leader in government support for business.
But it’s not for nothing that I included Denmark in the ranking of the best countries for the conduct of IT business. The level of IT infrastructure in this country is the best. And according to this indicator, Denmark has left behind even the leader of our rating.
If your main goal of doing business is to conduct international business - and then Denmark is ahead of the rest. Legislation, territorial affiliation and relative openness of borders contribute to this. Within the framework of the European Union alone, business will be available, although not the largest, but one of the most solvent markets, with a capacity of at least 100 million people.
Enumerating all the positive aspects of doing business, one can not fail to mention one very important detail. If you or your company is planning to be not the sole owner of the business, you should be very careful when owning small shares of the business. In terms of protecting the interests of minority shareholders (owners of small stakes in business), Denmark is at the very end of our rating.
Taxation is also not a matter of dreams for businessmen and ordinary residents with a personal income tax rate of 55.6%, corporate income tax - 22%, capital gains tax of 24.5%, and you may be required to pay stamp duty 0.6-1.5%.
Recommendations:
I recommend Denmark to companies that need a developed IT infrastructure, international trade opportunities, as well as companies seeking the highest level of government support and low lending rates. Denmark is a party to most international conventions on the protection of intellectual property, so any development will be protected from the moment of their creation, and in some cases from the time of registration.
With a significant lead in the ranking ahead, New Zealand broke ahead in almost all indicators.
Registering your own IT business in New Zealand is easier than in any other country.
Registration is online at the New Zealand companies office - www.business.govt.nz/companies . A few days later you will receive a notice in the mail, which must be signed and sent back. This business registration will be completed.
You can even not open a separate bank account to conduct settlements with counterparties and to pay salaries to employees, if such are planned. Instead, all transactions can be performed through your personal bank account.
If your business does not require the installation of large server racks and a separate space for infrastructure, you can easily do the first time renting small office space with tables, Internet, kitchen and recreation room. If you do not plan to recruit staff, you can limit the conduct of business without leaving home. Unlimited Internet costs 40-55 euros per month.
Getting a visa in the case of IT business is much easier. So if, in the usual case, to receive an Entrepreneur Work visa, investments in the region of 65 thousand euros (100 thousand New Zealand dollars) are required, then in the case of running an IT business such requirements are not established, thereby stimulating the growth of the IT sector.
In terms of the attractiveness of the tax system, I also give the palm to New Zealand. Let's take a look at New Zealand's overall tax system:
Profit tax - 28%
NDFL - 33%
Yes, and some kind of GST in the amount of 15%!
“Well, doesn't it look like a tax haven?”, You will say. And you will be absolutely right. But only if you do not pay attention to one feature. We are talking about business abroad, assuming that we are Russians, Belarusians, Kazakhs, and so on. Thus, being a non-resident founder or partner of a New Zealand company, we will not pay tax on income from income received outside Novaya Zealand. This is a Limited Partnership and Look-through company. Thus, doing business in New Zealand using the Internet and providing services to recipients outside of New Zealand, you can rely on the income tax rate of 0%.
However, due to this peculiarity of taxation, New Zealand does not support the desire of IT companies to sell their services abroad. In this connection, in terms of “international trade”, New Zealand is an outsider among competing countries. In this connection, I recommend to start to decide whether you can and will be able to provide services to companies abroad or will conduct only local business. In the latter case, tax breaks lose their advantage.
Despite the openness of the country to the IT business, the digital infrastructure in the country is not among the leading competitors and is in the penultimate place among the countries participating in the rating.
At the same time, despite the leading position in the overall standings, I put New Zealand as a leader in the small and medium business sector. If you have a large company with infrastructure that requires gigawatts of streaming electricity, New Zealand will not be the best country in terms of access to backbone grids. Although, can this be a problem for a large company?
Recommendations:
I recommend the jurisdiction of New Zealand to all companies engaged in IT business, for which it is not critical to have an unlimited amount of electricity, as well as saving on taxation is a priority. I counted 95 laws, regulations, conventions and agreements on the protection of intellectual property, most of which are international, so you can be sure of the protection and protection of created intellectual property in this country.
Evgeny Morozov,
Intellectual Property Expert.
5th place. South Korea
“+”
South Korea rarely comes to mind when the idea arises to open a business abroad. At the same time, according to various sources, the economy of South Korea is at 11-15 place in the world ranking and is one of the fastest growing.
You should go to South Korea if you need unlimited access to the power grids, and your business is focused on international customers. In South Korea, you can get high tax breaks if you register your business in one of the free economic zones, and also have the opportunity to develop large projects that require a large IT infrastructure, and you can also easily connect to large power grids.
At the same time, registering your own business in South Korea, as well as leading it, is worth a lot of effort. Despite the fact that, on average, the registration of your own business takes 1 week, you can hardly do without the help of third-party assistants. Conduct all the talk, fill out forms and come up with the name of the company you will only have in Korean.
')
Since 2014, South Korea has started issuing the so-called startup visa. These are entry visas for foreign entrepreneurs opening an IT business. In order to get a Startup visa, you must have: a university degree with a bachelor's degree and above, and also own at least a part of a share in any intellectual property.
South Korea is a rare symbiosis of stability and a fast-growing economy. The other side of stability is strict rules and laws, including in business. Sometimes you have to literally fight with Korean partners, while agreeing the terms of the contract. Any comments from our side are perceived as disrespect. However, later I understood what was the matter, and at first began to recommend attracting local Korean consultants to the talks, who told about the peculiarities of doing business in this country.
The best way to make your business effective in South Korea is to make acquaintances. Much is solved through personal connections. At the same time, the possibility of making new acquaintances is strongly limited by the weak penetration of the English language. If you have at least basic knowledge of Korean, this will be an undeniable advantage.
According to local customs, it is not recommended to approach and introduce yourself to a stranger, it is better if you are introduced by a mutual friend. If you are lucky enough to be represented, do not forget to bow to your new Korean friend, thus you will show your respect and knowledge of etiquette. And when they give you a business card, make sure that you take it with two hands or at least with your right hand, and with your left hand you support the elbow of your right hand, which contains the business card. Happened? Congratulations, you have a first friend and your chances for a successful business in South Korea have increased significantly.
Recommendation:
I recommend the jurisdiction of South Korea to the publisher of computer online games, because the infrastructure capabilities allow you to deploy IT structures of unlimited complexity, and proximity to the largest Asian producers of online games, gives access to human resources and inexpensive labor combined with a high level of skills. At the same time, close proximity, knowledge of the peculiarities of the mentality and business processes will help to obtain licenses for the localization of games in your country with a greater degree of probability. South Korea has acceded to all the basic conventions for the protection of intellectual property, so that we can easily guarantee the protection of intellectual property to our clients in most of the world’s territory.
4th place. Hong Kong
“+”
How easy it is to register a business in Hong Kong, as difficult to conduct it. Partly due to differences in mentality, partly due to the high competitive environment in the IT field. But still, this country is one of the leaders in attractiveness for conducting IT business, let's see why.
You can register a company in Hong Kong at www.investhk.gov.hk . To register, you will need to choose the name, type of company, as well as pay 200 euros for an annual certificate for doing business or 540 euros for a three-year certificate. You will also be required to make a contribution to the wage fund for the disabled in the amount of 25 or 75 euros, for an annual or three-year certificate, respectively. To register a company, you also need 1,000 euros to form the company's share capital.
In this case, you do not even need to live in Hong Kong. For the operation of your company, you can rent an office address with secretarial services for a small fee and this will be enough to have your own business.
Opening a business in Hong Kong gives you unlimited access to the most crowded market in the world - the Chinese. It is Hong Kong that is an ideal place for IT business, if you consider China as the most priority direction of development.
You can easily gain access to the power grid and be able to receive the required amount of electricity, so your equipment will definitely not experience problems with a lack of electrical power.
Taxation in Hong Kong deserves special attention. If you are going to provide services in Hong Kong, you will be asked to pay income tax of 16.5% to the local treasury. In comparison with global rates, this is not a bad result. But if you provide services anywhere in the world outside Hong Kong, you will not pay anything, the income tax rate in this case is 0%.
“-”
Despite all the benefits of starting a business in Hong Kong, it’s hard to call this country the easiest to do business. In Hong Kong, you will not receive such strong government support for your business as in other countries from our rating. Nevertheless, the benefits that can be obtained from registering a business in this country are likely to outweigh all the other disadvantages.
Recommendations:
I recommend the jurisdiction of Hong Kong to the company, one of whose activities is the development and production of electronics in China. Carrying out the production of electronic goods in China and, for example, supplying them to Europe or Russia, your income tax rate will be 0%. Opportunities for the international registration of patents for engineering development will ensure the protection of patent rights to manufactured products throughout the world, so you will have all the necessary tools to protect against counterfeit.
3rd place. Singapore
“+”
Singapore is rightly firm middling rating. He is not a leader by any particular criterion, however, I will not attribute him to the lagging countries either. Except for one criterion, about which below.
This is a country with fairly light business conditions. For this indicator, Singapore is second only to one participant in the rating, which turned out to be the winner in the overall standings.
You can become the owner of your business within 1-2 days after submitting the documents for registration, and in order to form the authorized capital you only need an amount not exceeding 1 euro. For online registration, the Singapore government recommends using one of two resources: www.bizfile.gov.sg or www.acra.gov.sg. And in order to find any legislation on activities in this country, it is not necessary to buy legal systems and contact local lawyers, you can use the free online search service for the necessary legislation on the website sso.agc.gov.sg
Singapore has about 50 international treaties for the avoidance of double taxation, and also makes considerable efforts to improve legislation and tools for the protection of intellectual property. Therefore, Singapore is waiting for companies engaged in the development of software, games and other objects of intellectual property and is taking steps to attract such companies into its jurisdiction.
And also, at a sufficiently high level, protection of minority shareholders of companies (owners of small shares) is implemented, so it is possible without particular concern to invest in Singapore companies by acquiring even small shares or a small number of shares.
“-”
Despite the high level of government involvement in attracting the IT sector and protecting intellectual property, the IT infrastructure in this country did not catch up with the leaders of our rating, although it has the potential for development and growth.
Presence of infrastructural features, as well as peculiarities of entering the business to the international level, I would recommend Singapore for companies engaged in local business related to the IT sector and the production of intellectual property. For the development of international business, there are more attractive countries in our ranking.
Recommendations:
I recommend the jurisdiction of Singapore to software companies that provide services in the field of graphic design, website development.
2nd place. Denmark
“+”
To register a business in Denmark, compared to other countries, more effort will have to be spent. Although as before, there is nothing difficult in this, according to this indicator, Denmark turned out to be the weakest link.
In this case, you can register a business in Denmark in 5 days. To do this, you can apply online at virk.dk (I hope you have already learned Danish?) Or go to the tax office and fill out a questionnaire. No preparatory steps and document collection required.
If you want to register as an individual entrepreneur you will need a residence permit. In the questionnaire you will be asked to indicate your full name, residence permit, type of the proposed activity, as well as details for communication and sending correspondence.
And if you register a partnership or a limited liability company, as well as a joint stock company, you will be required to draw up a memorandum of association, articles of association and other corporate documents that founders or shareholders may deem necessary. Be careful when registering a business as an individual entrepreneur or partnership, you will have personal unlimited responsibility for the results of doing business.
After you register your business, its management will be more friendly than registration. The system is designed in such a way that government agencies direct you in the right direction without having to learn all the intricacies of domestic legislation. Do you have a small business? You can not hire an accountant, just keep the receipts and at the end of the year, go to the office of the audit firm, so that it puts a check mark - reporting is ready. The state will independently send you all the necessary invoices for payment by mail, so you can not worry that you have forgotten to pay a fee. Denmark is the undisputed leader in government support for business.
But it’s not for nothing that I included Denmark in the ranking of the best countries for the conduct of IT business. The level of IT infrastructure in this country is the best. And according to this indicator, Denmark has left behind even the leader of our rating.
If your main goal of doing business is to conduct international business - and then Denmark is ahead of the rest. Legislation, territorial affiliation and relative openness of borders contribute to this. Within the framework of the European Union alone, business will be available, although not the largest, but one of the most solvent markets, with a capacity of at least 100 million people.
“-”
Enumerating all the positive aspects of doing business, one can not fail to mention one very important detail. If you or your company is planning to be not the sole owner of the business, you should be very careful when owning small shares of the business. In terms of protecting the interests of minority shareholders (owners of small stakes in business), Denmark is at the very end of our rating.
Taxation is also not a matter of dreams for businessmen and ordinary residents with a personal income tax rate of 55.6%, corporate income tax - 22%, capital gains tax of 24.5%, and you may be required to pay stamp duty 0.6-1.5%.
Recommendations:
I recommend Denmark to companies that need a developed IT infrastructure, international trade opportunities, as well as companies seeking the highest level of government support and low lending rates. Denmark is a party to most international conventions on the protection of intellectual property, so any development will be protected from the moment of their creation, and in some cases from the time of registration.
1st place. New Zealand
“+”
With a significant lead in the ranking ahead, New Zealand broke ahead in almost all indicators.
Registering your own IT business in New Zealand is easier than in any other country.
Registration is online at the New Zealand companies office - www.business.govt.nz/companies . A few days later you will receive a notice in the mail, which must be signed and sent back. This business registration will be completed.
You can even not open a separate bank account to conduct settlements with counterparties and to pay salaries to employees, if such are planned. Instead, all transactions can be performed through your personal bank account.
If your business does not require the installation of large server racks and a separate space for infrastructure, you can easily do the first time renting small office space with tables, Internet, kitchen and recreation room. If you do not plan to recruit staff, you can limit the conduct of business without leaving home. Unlimited Internet costs 40-55 euros per month.
Getting a visa in the case of IT business is much easier. So if, in the usual case, to receive an Entrepreneur Work visa, investments in the region of 65 thousand euros (100 thousand New Zealand dollars) are required, then in the case of running an IT business such requirements are not established, thereby stimulating the growth of the IT sector.
In terms of the attractiveness of the tax system, I also give the palm to New Zealand. Let's take a look at New Zealand's overall tax system:
Profit tax - 28%
NDFL - 33%
Yes, and some kind of GST in the amount of 15%!
“Well, doesn't it look like a tax haven?”, You will say. And you will be absolutely right. But only if you do not pay attention to one feature. We are talking about business abroad, assuming that we are Russians, Belarusians, Kazakhs, and so on. Thus, being a non-resident founder or partner of a New Zealand company, we will not pay tax on income from income received outside Novaya Zealand. This is a Limited Partnership and Look-through company. Thus, doing business in New Zealand using the Internet and providing services to recipients outside of New Zealand, you can rely on the income tax rate of 0%.
However, due to this peculiarity of taxation, New Zealand does not support the desire of IT companies to sell their services abroad. In this connection, in terms of “international trade”, New Zealand is an outsider among competing countries. In this connection, I recommend to start to decide whether you can and will be able to provide services to companies abroad or will conduct only local business. In the latter case, tax breaks lose their advantage.
“-”
Despite the openness of the country to the IT business, the digital infrastructure in the country is not among the leading competitors and is in the penultimate place among the countries participating in the rating.
At the same time, despite the leading position in the overall standings, I put New Zealand as a leader in the small and medium business sector. If you have a large company with infrastructure that requires gigawatts of streaming electricity, New Zealand will not be the best country in terms of access to backbone grids. Although, can this be a problem for a large company?
Recommendations:
I recommend the jurisdiction of New Zealand to all companies engaged in IT business, for which it is not critical to have an unlimited amount of electricity, as well as saving on taxation is a priority. I counted 95 laws, regulations, conventions and agreements on the protection of intellectual property, most of which are international, so you can be sure of the protection and protection of created intellectual property in this country.
Evgeny Morozov,
Intellectual Property Expert.
Source: https://habr.com/ru/post/348598/
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