Top countries that do not charge corporate tax
Bermuda, BVI, Cayman Islands, Guernsey, and Isle of Man are jurisdictions with low corporate tax in 2023. However,, there are other fees to be aware of before choosing a business registration country.
Bermuda
Bermuda offers a favorable tax regime. There is no corporate tax in Bermuda. There is also no profit fee, VAT. But there are nuances:
- There is a fee for opening a business in Bermuda.
- It is necessary to regularly pay an annual state fee, which depends on the size and status of the company.
- There are tax fees on real estate, which are calculated based on its assessed value (up to 4% per year).
- Companies that operate in the financial sector (banks, investment and insurance organizations, private equity funds, etc.) must obtain and annually renew a license. The amount depends on the size and type of organization.
British Virgin Islands (BVI)
Corporate tax in the British Virgin Islands (BVI) is 0%. There are also no charges for income, value added tax (VAT), inheritance and gifts. It is also possible not to pay for personal income.
The BVI government earns a fee for registering a business, obligating you to pay an annual fee. There are also fees on land and real estate for their owners.
Cayman Islands
Corporate tax in the Cayman Islands is also zero. Companies registered here do not have to pay for profits, VAT, exempt from many other taxes (on inheritance, gifts, income earned outside the jurisdiction).
As in the previous cases, the Cayman Islands earns:
- business registration fees;
- a regular annual fee, the amount of which depends on the type of company and scope of activity;
- obtaining and renewing a license;
- real estate - 1% of the appraised value.
If you are planning a tourism business, should take into account that foreigners who stay in local hotels, must pay an additional fee for a hotel room - 10% of its value.
Guernsey
Corporate tax in Guernsey is 0% for many companies that are tax residents. It rises to 10% if income is derived from regulated activities (e.g., insurance, banking, fund management).
Income derived from the rental and operation of property located in Guernsey is taxed at a rate of 20%. In addition, if income from retail trade in Guernsey exceeds £500,000, you must pay tax at the rate of 20%. The same applies to income derived from the import and/or supply of hydrocarbons, oil and gas.
Certain collective investment schemes (CIS), mutual funds and partnerships can apply for tax exemption so that they will not be subject to the Guernsey tax regime at all. For each year of exemption you will pay £1.2k and the company must operate out of the jurisdiction, and the owners / beneficiaries must not be local residents or residents of the island.
Isle of Man
The Isle of Man is an independent British jurisdiction with its own taxation system. It is perfectly suited to offshore entities wishing to open a business in a prestigious jurisdiction.
Corporate tax in the Isle of Man is 0%, except in such cases:
- A rate of 10% applies to income that has been derived from a banking business that is conducted in the Isle of Man. Also it is paid by the companies which are engaged in retail activities in the Isle of Man if these profits exceed £500 thousand a year.
- A rate of 20% applies to income which has been derived from property located in the Isle of Man.
Where to open an offshore in 2023
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