A foundation is a non-profit organisation whose main aims are charitable and/or research-related. The actual scope of permitted activities for foundations varies significantly between jurisdictions, but the general aim of any foundation is to serve the public benefit without seeking to make a profit. Foundations base their work around distributing donated assets in ways that further their purpose, and these assets can be collected both publicly and privately.
However, today foundations are often used as an asset protection tool. Therefore, here we will discuss offshore foundations used for asset management. In this sense, foundations are commonly used to accept transfers of foreign funds and property (including such assets as real estate, intellectual property, bank deposits, company shares, investment portfolios, etc.). Foundations are recognised as separate legal entities and combine the features of corporations and trusts.
There is a wide variety of legal implications for foundations, depending on the particular jurisdiction they are registered in. In some countries, foundations are prohibited from conducting any form of business; in some, e.g. Germany, economic activity is permitted if it serves the main purpose of the foundation. In the USA, the law distinguishes between private foundations (which distribute the donations of specific individuals) and community foundations (which distribute public donations). Private foundations have more control over their charity-related activities, but also receive fewer tax benefits.
Functions of a foundation The main function of a foundation is to engage in charitable work and to distribute donations. An additional aim is to raise the assets needed for these donations and to choose recipients. Assets can be acquired either privately (from specific individuals) or publicly (from the general public). Public donations are usually collected with the aid of publicity campaigns and advertising. Some jurisdictions also allow foundations to obtain assets from business activity, if it can be proven that this economic activity is of a truly non-profit nature.
There are a number of functions that are prohibited to foundations, the main one being economic activity aimed solely at generating a profit. In some jurisdictions, e.g. Italy, foundations are also prohibited from dedicating their charitable activities to purposes other than those declared upon registration.
With the right paperwork and initial outlay, it is possible for a foreign citizen to open a bank account in Slovakia. This opportunity for international accounts and investments offers several advantages based on economic regulations and tax structures. Interest rates, tax laws, and fees vary depending on the specific country in which you are investing; careful research and strategic financial moves could result in significant portfolio growth.
Bearing in mind that within the European Union there are no withholding taxes on IP royalty payments between one member state and another, we can suggest a number of countries where royalty income taxes are particularly advantageous.
CYPRUS The intellectual property royalty tax system in Cyprus changed as a consequence of the recommendations of the Organisation for Economic Co-operation and Development (OECD)'s Action 5 report, as well as the conclusions of the Ecofin Council, published on 8 December 2015. The legislation was amended to limit the companies that can benefit from exemptions for research and development (R&D), but the tax rate in Cyprus is still one of the most favourable in the EU for foreign companies wishing to license the use of IP to a Cyprus-resident company (intermediary), where that right is then sub-licensed to the end user. Overall, the effective tax on income from IP royalties should be less than 2.5%.
IRELAND In 2015, Ireland introduced an effective corporation tax rate of 6.25% on income derived from IP, based on an allowance for the research and development costs sustained by the company. By linking the two components in this way, Irish law encourages companies to conduct R&D directly, inside the EU — leading to the creation of IP — whereas it discourages them from buying licences without making a direct commitment to R&D.
BELGIUM Belgium has established a tax regime that works in favour of those with income deriving from acquired copyrights. This fiscal regime can have many different applications, and can be used to protect artworks as well as providing a useful tax concession for IT developers. Revenues deriving from royalties on IP rights are taxed at 15%. These revenues are not taken into account when social security contributions are calculated. Moreover, for imports these taxes are reduced by 50% due to the application of standard entry costs. The first 15,000 euros earned by a copyright holder in a year is therefore taxed at 7.5%, and the following 15,000 at 11.25%. This tax system applies to those with a total annual income of up to 56,450 euros.
THE NETHERLANDS Since 2010, IP revenues in the Netherlands have been taxed at just 5%. There is no income threshold, except with respect to patents. Patent holders can in fact have access to this tax system if their share of the expected income is between 30% and 70%, taking into account the total combined revenue from patents and other sources. These rates also apply to foreign companies that own intangible assets or companies that have obtained a research and development accreditation from the Dutch Ministry of Economic Affairs, if they are the holders of software IP or trade secrets. The only other limitation of this favourable tax regime is that it does not apply to marketing- and brand-related assets.
LUXEMBOURG Generally, corporation tax in Luxembourg is 29.22%, but on revenues from IP licensing it can be as low as 5.8%. This is due to a corporate income tax exemption of 80%. Interestingly, this exemption also applies to companies that have registered a patent to be used in connection with their own activities, which then calculate a fictional net income, as if they had received the income from licensing it.
ITALY Italy is a bigger market compared to the other countries discussed, and it can be a very attractive place for a company to invest in research and development, because since 2015 companies have been able to deduct income deriving from intellectual property from their taxable income base. The fiscal deduction was set at 30% in 2015, 40% in 2016 and 50% starting from 2017. Companies will therefore enjoy a substantial tax discount as a result of the reduction in their taxable income.
Every year over USD 1 trillion is distributed worldwide in the form of foreign direct investment. Investments by foreign investors and entrepreneurs are of significant value to the country and are seen as a sign of a healthy economic, political and legal environment. When it comes to investing your money, some countries are simply better than others. It depends on numerous factors such as the country's overall economy and growth prospects, political stability, taxation and the overall legal system, the complexity of starting a business, opening an account and the workforce.
In this article, we summarize three jurisdictions in terms of benefits and other features crucial to foreign investors. These countries have already proven their ability to attract multinationals and other investments, but when it comes to choosing the right place to invest, each country is different and might be better than others in one or more factors.
Singapore The first country to be analyzed is Singapore, which ranks 2nd among the best countries for investment and 15th among the best countries in the world in the US News Best Countries Ranking developed in cooperation with its international partners .
Located in Southeast Asia, Singapore is a bustling metropolis and home to one of the busiest ports in the world. As one of Asia's four economic tigers, the country has experienced impressive growth in recent years thanks to efficient production and manufacturing processes and innovations in the pharmaceutical and electronics industries. High GDP per capita and low unemployment make Singapore one of the wealthiest countries in the world.
United Arab Emirates The United Arab Emirates or UAE is listed as the 22nd best country in the world and is not mentioned among the best countries for investment according to the above ranking.
Before the discovery of oil in the mid-20th century, the UAE's economy was mainly based on fishing and the pearling industry. The country experienced rapid growth and general transformation along with the start of oil exports in the 1960s. Today the country's GDP can be compared to that of leading European countries and the World Economic Forum has named the UAE the most competitive place in the Arab world.
When incorporating a company in the United Arab Emirates, foreign investors can choose between offshore or onshore registration, whichever is more suitable for the type of company and the activities planned. Onshore registration means that the investor establishes a business presence on the UAE mainland. Offshore registration usually refers to a business presence in one of the UAE's free trade zones. The UAE does not levy corporate income tax at the federal level. However, most Emirates have some corporate income taxation and can even reach 55% for certain industries. In practice, corporate income tax is mainly levied on gas and oil companies and branches of foreign banks. Other factors: The UAE is among the most liberal places in the Gulf with a legal system that allows freedom of religion; No sales tax or VAT but with plans to introduce it in the future; In addition to traditional banking, Islamic (or Sharia-compliant) banking has seen tremendous growth in recent times.
Hong Kong Hong Kong is a special administrative region of China. While Hong Kong is often considered as a separate entity from China, it is not a country and therefore enters all lists and rankings under the name of China. China takes 26th place among best countries to invest in and 20th place among best countries in general.
Hong Kong’s legal system is characterised by the strict adherence to principles and the rule of law. It operates a free trade economic system and promotes minimal government interference in most sections of the economy. This reflects on the small number of tariffs and duties on traded goods and therefore it is a better place for investments than other parts of China. Foreign investments are attracted by promoting a favourable investment climate with low taxes, few restrictions and additional incentives to encourage investments. Corporate profits tax rate is 16.5% with a possibility to waive 75% of the tax. There is no tax levied on dividends. Company incorporation is a simple and fast-forward process. All applications for company incorporation also include an application for the business registry. The application can be submitted online and the processing generally takes one hour (as opposed to four days if the application is submitted in hard copy).
Due to its impressive growth and increasing immigration, Singapore attracts the best professionals to its workforce. The country offers cultural diversity and, with four official languages, is an important gateway for international trade. The corporate tax rate is 17%, but it can be reduced by taking advantage of numerous government subsidies, incentives, and other programs. Singapore's legal system is known for its integrity, efficiency and fairness, making the country better than many as a place to start and operate a business. The World Bank Group has recognized Singapore's political and regulatory environment as the most business-friendly in the world. Other factors: Least Corrupt Country in Asia; Best IP protection in Asia; Most popular country for arbitration in Asia.
In general electronic commerce (EC) or as it is called e-commerce is defined as commercial transactions conducted electronically on the Internet, Intranet, Extranet, World Wide Web, by email and by fax. These transactions aren't required to have a price and include both sales and items like free downloads. All the transaction can be made on a global scale.
Simply put, e-commerce means buying and selling goods online. It also includes other types of activities related to business transactions. The latest and nearest branches of e-commerce include mobile commerce, when goods are sold using different mobile devices and Facebook commerce which provides an audience to transact business.
E-commerce involves the creation of new value business structures and business relationships between companies, their customers and suppliers.
Examples of e-commerce business Best examples of e-commerce are: online shopping (e.g. Amazon.com), electronic payments (e.g. PayPal), online auctions (e.g. eBay), online ticketing (e.g. Ecolines) and internet banking (online bank accounts). It can be executed in two ways – business to business transactions (B2B) between traders, retailers and manufacturers on both sides, business to consumer (B2C) between businesses and consumers and between consumers (C2C), where both parties involved in transactions are creating barter-type deals. Third type of e-commerce transactions can be clearly described as auctions.
There are various ways to execute business deals: email exchange, online catalogs and digital coupons, shopping carts operating with the help of operating system software used to allow consumers to purchase goods and services as well as to easily track customers by putting together all trade aspects into one cohesive whole, File Transfer, social media marketing, targeted advertisements and other web services.
E-commerce industry brief overview E-commerce helps to save time by speeding up the whole selling process, ensuring wider range of goods in one place, stay available around-the-clock, to find target audience, create and accept business offers and lowers transactions’ costs as well. This means that there are no barriers of time or distance while using the Net. However, it is still not possible to do some important things using this way of making business. For example, consumers as well as retailers and traders are not able to touch the goods straightway and have a tangible experience of the interested items.
Businesses started to use electronic data for sharing their deals in early 1690-s,. In 1979 the American National Standards Institute developed a universal standard for businesses to share business data through electronic networks called ASC X12. The whole industry hit the road in the 1990s with the development of amazon.com and eBay. Past 5 years are recorded to be nourishing for Internet business transactions.
According to data from the U.S. Commerce Department in 2015 Web sales made up to 341.7 billion USA dollars. E-commerce helps to keep things simple while having fewer limitations. It helps to boost the business, build up marketing automation systems, and manage sales and communication with clients and business partners remotely.
Top jurisdictions for incorporating an e-commerce company Certain jurisdictions have some useful advantages for e-commerce businessmen and international online traders. For example, England has a mature investment and banking industry, allowing an online trade and ensuring a bridge between US market and companies looking forward to break into that market. France has a dedicated minister to digital business (Axelle Lemaire) by creating a brand (La French Tech) meant to promote French startups internationally. Germany or Berlin in particular enjoys lots of attention from famous tech multinationals such as Google Campus @ Factory. Top10 e-commerce markets by country also include China (rated 1), United States (rated 2), Japan (rated 4) and South Korea (rated 7). These ratings were made in 2014 and are based on the statistical data reflecting the amount of total online sales.
There are 100 km² of cultivated land in New Caledonia, and it comprises 1% of the country's total territory. In New Caledonia, permanent crops occupy 41 km² of the land. This comprises 0% of the country's total territory. There are 59 km² of arable land in New Caledonia. and it comprises 0% of the country's total territory. 20% of the population are working in agriculture.
The advantage of this type of incorporation concerns the liability thresholds. In principle, the shareholders of a stock corporation are only liable up to the amount of their contribution to the company. So if the company goes bankrupt, creditors cannot claim compensation or seek damages from the shareholders personally. Conversely, the company is not liable for the liabilities of its partners. The strict separation between shareholder and corporate liability follows the principle of the legal person.
Another benefit is the ability to raise the necessary funds to start the business. In the start-up phase, it can be difficult for a company to obtain seed capital. However, if few business partners make an investment to achieve a single goal, the business start-up plans are likely to be more realistic. At the same time, joint investments are directly linked to joint profit sharing. So if the company is making a profit, the dividends should be paid pro rata to each shareholder.
The duties and powers of a board of directors of a company are based on the applicable commercial law and the articles of association of the company. A public company typically has a two-tiered board of directors, which helps to control day-to-day decision-making and prevent mistakes, but a complicated governance structure can hamper the speed of decision-making at times when rapid response is required.
If you are planning to set up a company in the form of a public company, we strongly recommend that you contact us beforehand. We will inform you comprehensively and in detail about tax planning options and the most efficient corporate structure for your company.
A merchant account is a specific type of bank account that allows businesses to accept payments from their customers using a debit or credit card. In other words, a merchant account is an agreement between three parties: a retailer, a merchant bank, and a payment processor for the purpose of processing credit and debit card payments. When a customer pays for their purchase with a credit or debit card, the money is first deposited into the merchant's account and then further transferred to the company's bank account. The transfers to the bank account are usually organized on a daily or weekly basis.
Types of Merchant Accounts There are different types of merchant accounts, which typically fall into two categories, and the description of each type gives a pretty clear overview of which ones are best for your business. The main categories of a merchant account are stolen and encrypted.
A swiped merchant account is typically used when a business meets its customers in person and during that meeting a customer can swipe their card to pay for the products and services. This type of merchant account is usually further described in relation to the use of said account:
Retailers – conduct transactions in a retail environment. The customer's card is swiped through a terminal and typically a signature or PIN code is captured; Wireless / Mobile – similar to retail, but in a wireless environment with a mobile device. An example of such a trader would be a taxi driver or a pizza delivery man; Restaurant - similar to retailer, but with additional function - possibility of adding tips. Corresponding to the name of this type of merchant account mainly used by restaurants and cafes; Accommodation – similar to retailers, but the company can adjust the payment amount according to the additional fees. This type of merchant account is used by hotels and bed and breakfasts when a customer has used a minibar or other extras. Encrypted merchant accounts are used when loyalty card information is taken over the phone or internet (or sometimes even in person) and entered by the employee themselves. While this merchant account application takes more time and is less convenient, it is also less expensive than the merchant accounts discussed previously.
Internet or e-commerce merchant – for companies that operate through a website and use the Internet payment gateway service to collect and process the customer's card information accordingly; Postal and telephone ordering - the customer's card information is transmitted by telephone, post or Internet and processed manually either via a credit card machine or a virtual terminal; Face to face - this type of merchant is similar to a wireless/mobile hacked merchant account, but instead of investing more money into acquiring a mobile device, it is possible to take the necessary information from the customer and enter it over the phone. Pros and cons of a merchant account While choosing the most appropriate type of merchant account for the intended application is crucial for the best experience, there are some general pros and cons that need to be discussed.
Advantages:
Increase in sales - through greater convenience compared to check or cash payments; Faster transactions; Security – no risk of theft or accidental mistakes by employees when working with cash; More choice – the more payment options you offer your customers, the more convenient it is for them to shop from you; Ability to accept credit or debit cards in multiple currencies. Disadvantages:
Costs – typically a business has to pay for each transaction; Delay – customer funds are deposited into the merchant account first and transferred to the commercial bank account later; Fraud – there is always a risk of identity theft or internet fraud; Chargebacks – It's easy for customers to request a chargeback, especially when the money is still in the merchant's account.
The development of telecommunications and economic globalization have made it possible for interested investors to set up companies all over the world. With proper research, financial investment and legal backing, business ventures can be safely incorporated in almost any country in the world. Building an international business used to be a complicated entrepreneurial venture, but today it is commonplace with the help of experienced legal and business advisors.
The advantages of founding a company abroad are as numerous as they are obvious. Many countries offer specific locational advantages, ranging from natural resources and well-established infrastructure to beneficial laws and regulations that encourage growth in a particular industry. Likewise, it can be difficult to start a business or an acquisition in your own country due to adverse situations: political or regulatory environment, lack of resources and more. In this situation, it makes sense to consider an overseas option that offers greater opportunities for growth, development, and success.
Company registration in Liberia When starting a business in Liberia, an interested investor must conduct due diligence regarding legal procedures, international regulations and sufficient investments for success. It is crucial to understand cultural, social and political factors that influence starting and growing one's business. Failure to do so may result in unintended consequences. Poorly researched and toneless international launches often end in disaster as time, money and energy is wasted due to poor planning.
Legal Documents Every country in the world presents its own intricate challenges when it comes to starting, developing and maintaining a business. Owners, financiers and investors must make these commitments with the support of a knowledgeable and experienced legal team. Only someone with in-depth knowledge of local and international corporate law will be able to set up an overseas business while avoiding the pitfalls that plague many new businesses.
Additionally, smart business people can consider ways to invest in foreign companies without actually starting their own businesses. In these situations, it is still beneficial for the investor to partner with a knowledgeable global economics and litigation advisor. International investments create a truly diverse portfolio that offers growth opportunities that were unthinkable decades ago.
Potential investors, venture capitalists and entrepreneurs should consider the existing infrastructure in Liberia when planning to start a new business. While extensive infrastructure and systems can help make the process of starting a business a smooth one, it could also represent market saturation and reduced growth potential. On the other hand, a lack of infrastructure is often a major obstacle to growth; However, the lack of infrastructure points to a clear market opening for a creative and efficient new business.
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26.12.2024 15:52
