The limited liability company (LLC) is a business structure preferred by investors around the world. It allows its owners to have limited liability for their investments in the company: only up to the amount invested.
For many entrepreneurs interested in opening small or medium-sized businesses, the tax advantages or different incentives offered by jurisdictions are also a plus when choosing to open an LLC. Our experts present some of the most suitable countries for investors who want to open a limited liability company.
Open an LLC in Hong Kong
Public and private limited liability companies exist in Hong Kong. This business form requires a share capital, however, there is no mandatory minimum initial amount and the share capital may be expressed in any major currency – an advantage for many investors.
Foreign investors who want to establish a limited liability company in Hong Kong have no restrictions in regards to being the company directors or members on the management board.
An important advantage for investors in Hong Kong is the low taxation regime. The corporate income tax is 16.5 per cent, there is no value added tax and there are no withholding taxes on dividends or interest.
Limited liability companies, as well as the other main forms of doing business, are incorporated as set forth in the Companies Ordinance. Although it does not provide specific incentives, Hong Kong has a duty-free status and the aforementioned low tax rates. The city has an ongoing policy to grow its number of double tax treaties.
Limited liability company in Ireland
Ireland has a welcoming business climate and a good R&D credit regime for investors. Government incentives are available for some investors who provide and sustain high-skilled jobs and on several other cases. The limited liability company in Ireland, either private or public, is one of the preferred business forms.
There are two types or private limited companies: the private company limited by shares (LDT) and the designated activity company (DAC). Like in Hong Kong, there are no requirements for a minimum share capital amount for the LDT or the DAC.
Ireland has a low corporate tax rate of 12.5 per cent for trading profits and exemptions from the withholdings taxes on dividends, interest and royalties are available. The country has signed a number of double tax treaties, which provide for a single point of taxation for companies that derive income both from Ireland and from a country with which the treaty is signed.
LLC in the Netherlands
The Netherlands has a strong policy for encouraging foreign investments and a liberal and welcoming business climate. Certain types of investment aids are available, including subsidies or loans for R&D projects or employment premiums for investors who create jobs. Other incentives include a special tax regime, calculated per tonnage, for shipping companies.
The privately owned company, or the BV, is the equivalent of the private limited liability company, while the NV is the public company or corporation. The liability of the members is limited to the value of the paid-up contributions they make for the company.
One of the advantages of opening a Dutch BV is that there is no minimum share capital. The Netherlands has a corporate income tax rate of 20 per cent on the first 200,000 EUR of taxable profits and 25 per cent for profits exceeding that amount.
Set-up an LLC in Spain
Spain has liberal rules for foreign investments and they are permitted in most business sectors except those like air transport, radio industries or those business sectors which are of strategic interest. Research and development tax credits are available for investors and incentives are also applicable for industries like cinema production or musical and artistic performances.
The Spanish private limited liability company is the SRL while the public limited company is the SA. When a foreign investor opens these types of companies, he/she must submit a statement to the general directorate of commerce and foreign investments.
The minimum share capital for the SA is 60,000 EUR, divided into shares. The minimum share capital for the SRL is lower, at 3,000 EUR. The standard corporate income tax rate is 25 per cent. Double taxation relief, as well as preferential withholding tax rates, are possible through one of the double tax treaties signed by Spain.
The information presented for these jurisdictions is meant as a guide. We strongly advise you to seek specialised company incorporation services in your jurisdiction of choice.
Further reading on starting an LLC
