10 A global guide to business relocation

Key country summary

Americas Argentina – although a high-tax country, offers

tax incentives to corporations engaged in production of software, bio-fuel and power using renewable sources, biotechnology etc. Argentina’s advantage lies in its growing economy and availability of educated work-force.

Brazil – supports and incentivises R&D activities and is working towards technological innovation, product innovation, and enhanced R&D activities.

Canada – boasts a number of characteristics that foster business growth, including a prudent fiscal policy, low inflation, interest and unemployment rates, a highly-educated population and a business friendly corporate tax framework.

Chile – with the objective of becoming a hub of innovation and entrepreneurship in the Latin American region, Chile has implemented a number of Chilean Economic Development Agency programs designed to attract entrepreneurs and R&D investment.

Colombia – R&D activities, scientific and technological development in Colombia attract various tax incentives.

Mexico – offers innumerable advantages, namely, availability of skilled labour at competitive costs, low transportation costs, network of free trade agreements and export incentive programmes.

Panama – has a special tax incentive headquarters’ regime that facilitates multi-nationals establishing their headquarters in Panama. Economic activities of national interest are granted several tax benefits in Panama.

Puerto Rico – offers the security and stability of operating in a US jurisdiction with an array of special tax incentives for foreign direct investment. It offers a highly attractive incentives package that includes a fixed corporate income tax rate, one of the lowest in comparison with any US jurisdiction, various tax exemptions and special deductions, training expenses reimbursement and special tax treatment for pioneer activities.

United States – one of the world’s major trading markets, it welcomes foreign investment and is a relatively easy country in which to do business.

Asia Pacific Australia – provides trade and business

links between the Asia-Pacific region, Europe and North America as a result of its unique economic position. Australia offers a low cost business environment, highly skilled as well as multilingual workforce. An abundance of natural resources coupled with the world-class transport and telecommunication infrastructure adds to Australia’s competitiveness.

China – one of the most important manufacturing bases in the world due to the country being rich in both skilled and unskilled manpower. China encourages foreign participation in investment projects by taking measures to make the investment climate more favourable and less bureaucratic.

Hong Kong – the economy is characterised by free trade, low taxation and minimum government intervention. In order to attract more foreign investment to Hong Kong, the government maintains a low and simple tax system and has particularly strong links into the Asia Pacific region.

India – a large pool of skilled and un-skilled labour and the prevailing cost arbitrage are an advantage for manufacturing and service centres to be set up in India. India is increasingly being used as an outsourcing hub by multinationals.

New Zealand – has an open economy that works on free market principles and is recognised as being a leader in being easy to do business in. New Zealand’s exports account for about one third of real expenditure Gross Domestic Product (GDP). It has a potential for a sizeable manufacturing and service sectors which complement a highly efficient agricultural sector.

Singapore – a dynamic and mature business environment makes it a favoured destination for multinationals operating in the Asia-Pacific region. Singapore is used as a regional/international headquarters by the global companies with large-scale needs.

A global guide to business relocation 11

Key country summary

EMEA Belgium – has the commercial benefits of being

located at the heart of Europe, a tax efficient holding company regime, a very attractive financing system (with notional interest deductions) and a wide range of tax incentives for companies investing in R&D make Belgium attractive for establishing a holding or finance company or an R&D centre.

Cyprus – widely used for investment into Russia and Central Europe owing to a strong treaty network, it is increasingly used for service companies, including the financial services sector, attracted by a 12.5% corporate tax rate, simple regime, and relatively low cost.

Hungary – a relatively new holding company location destination, its location is ideal for accessing other Eastern European countries. It also has a straight forward tax system, a low overall tax rate and a good IP regime.

Ireland – is a popular location for holding and IP holding companies, particularly with a wealth of skilled workers in the technology and pharmaceutical sectors. It also has a flexible tax system, low corporate tax rates for active trades, and a good IP regime.

Luxembourg – is a common holding and IP company location and is often used as a treasury/financing location. Advance agreements with the tax authorities are possible and a legal framework for the tax ruling was introduced to Luxembourg tax law on 1 January 2015.

Malta – a relatively low cost of living combined with a good quality workforce make this a popular jurisdiction for service companies. If structured correctly, corporate tax rates of less than 5% are achievable.

Netherlands – widely regarded as the holding location of choice, with a regime that is almost as competitive as a decade ago. With an excellent treaty network and a flexible tax system, it still is popular as a holding company location, and is widely used by service, trading and logistics groups.

Spain – not widely recognised as a holding company location but its strong treaty network with Latin America means that it is a very good holding company location to access these markets. Spain also has both attractive R&D credits and IP regime.

Switzerland – Switzerland is one of the top locations for international business. Numerous international headquarters, especially well-known trading companies, the largest pharmaceutical companies and major financial institutions are domiciled in Switzerland.

United Arab Emirates (UAE) – practically, a zero tax region, the UAE houses some of the largest financial services, banking, legal and accountancy firms in the world that facilitate smooth business operations. The UAE Free Trade Zones offer lucrative incentives, thus, attracting international investment.

United Kingdom – multinationals continue to use the UK as a holding company location – this is driven by commercial factors, particularly the relative ease of set-up, language factors and communication links. The UK also now has a very attractive tax regime with incentives for innovative businesses including a low headline corporate tax rate and limited witholding taxes.