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Taxpaying and low-tax jurisdictions

In the world of corporate practice, there are many jurisdictions that are not tax-exempt countries, but which are used by entrepreneurs for international operations due to their favourable tax laws or tax privileges available to specific types of company.

This group covers jurisdictions where it is possible to incorporate both companies with a zero tax status at the level of the enterprise (for example, Limited Liability Partnership in the UK or Komanditsselskab in Denmark) and full taxpaying companies (for example, Limited company in Ireland or the UK), which can be operated in a moderate tax regime, given the particular advantages of tax laws of such countries.

Most companies from these countries combine the following characteristics:

  • High rating of the jurisdiction. Usually these countries are not included in any “black lists”.
  • Companies in these countries have to file annual financial statements. In some countries or under specific financial criteria, the report needs to be certified by a licensed auditor.
  • Compared with classic tax-exempt companies, normally the countries of this group have higher incorporation and ongoing maintenance costs.
  • In some cases, there are additional requirements for officers of companies incorporated in these countries. As an example, in a number of jurisdictions, directors of the company have to be individuals. Other jurisdictions may require that one or more of the directors should be resident in the country where the company is incorporated.

Companies from this group of jurisdictions are usually used where a respectable and prestigious corporate instrument is required. This is subject to the demands of business partners or a specific commercial situation.

A description of the conditions of incorporation and further maintenance of companies in the following jurisdictions is given below: