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 offers a favorable tax regime. There is no corporate tax in Bermuda. There is also no profit fee or VAT. But there are some 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 (such as banks, investment and insurance organizations, private equity funds, etc.) must obtain and annually renew a license. The fee 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 or 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.
Corporate tax in the Cayman Islands is also zero. Companies registered there do not have to pay for profits or VAT, exempt from many other taxes (on inheritance, gifts, and 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, consider that foreigners who stay in local hotels must pay an additional 10% fee for a hotel room.
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, and fund management).
Income derived from the rental and operation of property 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.
Specific 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. For each year of exemption, you will pay £1.2k, and the company must operate out of the jurisdiction. The residency of the owners or beneficiaries doesn't matter.
Isle of Man
The Isle of Man is an independent British jurisdiction with its taxation system. It is ideally 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 derived from a banking business conducted in the Isle of Man. Also, the companies engaged in retail activities in the Isle of Man pay it if these profits exceed £500,000 a year.
- A rate of 20% applies to income derived from property in the Isle of Man.