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Corp tax is 20% and up to £~45k pa you will pay no further income tax on dividends drawn down (though I think this is changing this year to 5%).
Flat rate VAT scheme is helpful for smaller companies.
But by far the best thing is the ridiculously good tax breaks the govt offers for startups, esp tech.
SEIS allows investors tax refunds for 50% of their initial investment, plus 25% if you fail. Which means for every £1 they put in, the govt is 'underwriting/giving you' £3. And if you succeed they will pay no further capital gains tax on their realised gains.
R&D allows you to get back 23% of qualifying R&D costs in cash (or deducted off your corp tax bill).
Put those numbers together and you can see why you should incorporate in the UK...
I've incorporated in the UK but I kind of wonder if I made the right choice. It's a fantastic country, but one thing that bothers me and that I discovered too late - only a few weeks ago - is privacy. This is a real one, pay attention to it. Basically, private companies are as public as american public companies. It's ok to have disclosures to make to the government, but here you also have to disclose your financials…
Compared to others Luxembourg has a good standing and no image problems combined with good banking privacy. You can sign contracts with anyone without being labelled as operating in a tax haven. Operating costs are more competitive than France. Most people speak 3 languages. Accountants & Lawyers are familiar with the law and tax code of their neighbours (France / Belgium / Germany).
But if privacy is not a problem I'd always register where my clients are. If you want to do freelancing in Germany and invoice German clients with a UK Ltd then be prepared that it is more likely that the Finanzamt will knock on your door - and if they do they will be taking a very thorough look.
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Unfortunately, being incorporated in Malta just screams "shady business" - at least here in Slovenia where such companies belonging to questionable characters are constantly in the news.
Hopefully that'll pass some day. It's the same in Austria, however recently there's been new legislation for LLC companies with very low starting capital almost all over Europe, so you can have shady-looking businesses anywhere (e.g. 1-Euro-LLC in Germany).
I'm currently living in Austria, but operating out of my UK Ltd company. While it does work, there are a few pain points around banking, currency exchange and my residency in Austria (am I exercising my EU rights, living in Austria but still officially consulting for and being paid by a UK Ltd company?). It would make my life a bit easier to have an Austrian based company, but the amount of share capital required to setup a GmbH is quite high.
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You are welcome ! BTW if you are a Portuguese citizen you can register your company in a easier way, from this page: https://e-estonia.com/component/e-business-register/ Finally if you want to open a company in estonia you will need a physical address, fortunately the government is aware of this hurdle, and in it's website suggest an handful of providers: https://e-residency.zendesk.com/hc/en-us/articles/205207022-..…
You need more than a physical address, you need to live in estonia if you don't want to pay extra taxes. This is true for at least Finland, I have consulted tax lawyers about this.
I am sure is not something that they would put on the first page, however I am a little surprise.
Do you care to elaborate ?
Take a good lawyer, accountant. I am French and created two companies in UK (Ltd) and one in Germany (GmbH). In theory, UK was better, in practice, because I live in Germany, the GmbH is more convenient. Also, a lot of your optimisations are dependent on your products. Are you selling software (licenses), consulting or goods? Are you doing import from outside of the EU? Sometimes, depending on your product, a country…
If you are resident in Germany and you are the main business decision maker in the UK company, German tax authorities would ask to tax you pay corporation tax for the Ltd. in Germany which can complicate things (I am not talking about your personal income tax).
Is this not a big mess or how should one deal with this? Do you frequently travel to UK to do 'main business decisions' there?
Great thread btw
EIS & SEIS [1] tax breaks for UK angel investors are a strong argument for the UK. Also R&D investment has tax credits too, so startup salary spend on new product dev is treated well by the UK tax office [2]. Don't know if PT & NL offer any similar breaks for startups & their investors. [1] https://www.crowdcube.com/pg/seis-tax-relief-42 [2] http://forrestbrown.co.uk/rd-tax-credits-explained/
To take advantage of R&D though your staff need to be contractors or UK employees, so more difficult if you already have a workforce elsewhere.
If you have some horribly complex multinational structure then you'll have more scrutiny but it's not impossible.
I would definitely check out estonia, you are not taxed on profit but only when you get money out of the company. https://en.wikipedia.org/wiki/Taxation_in_Estonia#Corporatio... . On wage there is a 33% social tax with is pretty much the same in Italy and I suspect to be pretty much standard across europe.
All EU countries have world's strongest consumer protection rights and labour rights since most local laws are following EU directives.
I've incorporated in the UK but I kind of wonder if I made the right choice. It's a fantastic country, but one thing that bothers me and that I discovered too late - only a few weeks ago - is privacy. This is a real one, pay attention to it. Basically, private companies are as public as american public companies. It's ok to have disclosures to make to the government, but here you also have to disclose your financials…
Same is true in Sweden. Just visit allabolag.se
(thx @unixhero)