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Best Jurisidction for E-Commerce Web-Site? |
Anonymous
Posted on: 29/08/2010
Posted at: 10:18:56
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I am looking for the best jurisdiction for my e-commerce startup. It is important that it has a DTA with Denmark as the e-commerce startup should be a subsidiary of a danish holding. The main customers are in Europe. I am not looking for a Belize or Seychelles company or any other discount company formation service. Any advise?
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Anonymous
Posted on: 29/08/2010
Posted at: 13:39:46
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Dear Sir/Madame,
Perhaps it is a good solution to incorporate a Cyprus Company. Cyprus is a member of EU, which gives full access to EU directives (such as Parent-Subsidiary Directive) and there is a DTT between Cyprus and Denmark.
It provides full confidentiality for the ultimate beneficial owners. Also, any dividends paid to non Cyprus resident shareholders are exempt from taxation. The overall tax rate is 10% and any expenses incurred in connection with the business are tax deductible.
For more information please contact us at info@prospectacy.com
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Anonymous
Posted on: 29/08/2010
Posted at: 15:13:39
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You forgot to mention that Cyprus has also a 15% VAT = so effective Tax would be 25%.
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Anonymous
Posted on: 06/09/2010
Posted at: 11:45:37
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Malta is an excellent location for International Trading Companies and does have a Double Taxation Treaty with Denmark. Being a non-resident shareholder of a Matese company you would only pay 5% tax on distibuted income. I am an accountant specialised in the setting up and the administration of Malta registered companies. For more detailed information please contact me at pbt@maltanet.net
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Freemont Group
Posted on: 07/09/2010
Posted at: 08:49:21
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Please consider Cyprus in combination with Dubai - in order to reach effective income tax rate of 0.7%. Email us at info@FreemontGroup.com.
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Andiel Parker Randall Ltd.
Posted on: 15/10/2010
Posted at: 13:31:04
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I believe Bulgaria could be a very good option for you. It is an EU country and certainly not an off-shore destination. Both personal and corporate tax rates are 10% flat rate and it has a DTR agreement with Denmark. For further information please contact us on andiel@andiel.com or through our web-site andiel.com
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FG
Posted on: 15/10/2010
Posted at: 14:56:49
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There are (at least) three options for you to consider, depending on the way you want to organize the venture:
- operational subsidiary, developing the e-commerce venture and situated in a country that has a suitable tax system, a proper double tax treaty and business-friendly;
- sub-holding, allowing the creation of a further company in a jurisdiction that is very flexible (tax wise and from a legal standpoint), even though it does not have treaty protection; or
- creating two companies: one developing the IP (in a country with a specific and advantageous IP tax regime), and one developing the commercial activity (can almost be anywhere).
Option 1
You have many options, mostly EU companies (Cyprus, Bulgaria, other EU jurisdictions – 10% income tax; Malta: 5% income tax).
If the main customers are in the EU, VAT may be due anyway and therefore should not be a determining factor.
Option 2
Unless not possible under Danish tax law (e.g. look through “multi-tier” CFC law), one could envisage setting up one holding in a country that exempts dividends from trading companies, even if these do not pay any tax.
Cyprus is one notable EU example. Otherwise, New Zealand is an option (recent PEX regime is very favorable and the jurisdiction is not considered a tax haven).
The operational company may be in Dubai, Hong Kong, etc. or may be tax transparent entities in otherwise high tax jurisdictions, such as US LLCs (I would still avoid offshore jurisdictions since the clients will be in Europe).
Option 3
The e-commerce activity is developed out of any jurisdiction, even Denmark.
However, the IP is located in a jurisdiction such as Luxembourg (6% effective income tax) or Malta / Cyprus (10% income tax) and licensed to the e-commerce venture.
Effective tax rate may be higher but compliance costs, tax risks and administrative burden is definitely minimized.
http://bit.ly/b94J0O
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Martin Katz Chartered Secretary www.martinkatz.im
Posted on: 17/10/2010
Posted at: 22:50:44
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I'm surprised at the number of replies you have had - but not a single one has asked you what the nature of your ecommerce business is. Please can you tell us so we can make some specific recommendations ?
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Anonymous
Posted on: 22/10/2010
Posted at: 22:01:48
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The danish holding laws are able to exempt tax from incoming dividends, even if the subsidiary is in an offshore location (e.g. such as Panama), but only if it meets the CFC rules.
More information about recently updates:
http://www.executiveview.com/knowledge_centre.php?id=9883
The best option:
Danish Holding Company (registered as ApS)
-> founding a subsidiary in f.ex. Panama, BVI or similar.
-> founding a subsdiary in Bulgaria or Cyprus
The subsidiary in Panama holds the rights of the e-commerce web-site. The other subsidiary in Bulgaria/Cyprus doing the payment (merchant accounts, etc.) and has a contract with the Panama company, that the customer's money is pushed through from the Bulgaria/Cyprus with a 10% "fee".
At the end you have 90% of income tax-free in the danish holding company and 10% income is taxed at 10% Bulgaria/Cyprus corporation tax.
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