Top five EU tax havens

Owners of corporations and holdings are interested in finding a simplified tax system. This is especially true for those entrepreneurs who are unsatisfied with the policy in their home country, and unwilling to contribute to a fair society. In order to bring in investment and benefit from cooperation with foreigners, unique residence by investment programs have been created.

One of the attractive aspects of such offers for those with the means is the possibility of reducing taxes – in this case, a favourable deal for both parties. The investor gets citizenship and a loyal tax system, while the host country improves the quality of life for its citizens.

Expert advice can help with finding excellent investment options and utilising the benefits of paying taxes. One such expert is specialist Vladlena Baranova (of the Immigrant Invest agency), who offers investors the chance to explore several EU tax havens with appealing investment programs. These are her thoughts.

What is a tax haven country?

Paying taxes is the responsibility of all residents of a particular country. Since countries decide for themselves what their tax system will be, it is not surprising that the rules vary. Because of this, some countries in Europe have been called “tax havens.”

Competition has led to the emergence of new programs, the participants of which receive some privileges. The official status of a citizen will help to avoid double taxation. In addition, there is a chance to improve personal position.

Investors who are interested in obtaining citizenship consider the peculiarities of tax systems. If the state allows not paying taxes on capital gains or corporate profits, one can safely say: this is a tax paradise for entrepreneurs.

Luxembourg

The country’s small size does not mean that citizenship will not be profitable. Business people familiar with the tax system’s peculiarities consider Luxembourg to be a country without tax. To understand the appeal of the state, a cursory familiarisation with the current tax system is enough:

• there is no tax on dividends
• there is no tax on interest
• capital gains on shares may not be taxable

The country has spent a lot of time creating the right atmosphere and attracting entrepreneurs. Luxembourg is on a par with Switzerland and guarantees the protection of the rights of its citizens. Thus, strict confidentiality makes the country a tax haven for many investors.

Ireland

The financial crisis in the mid-2000s brought about adjustments to Ireland’s taxation system. Since then, the country has offered excellent conditions to foreigners who want to set up a company. A friendly tax regime has been prepared for interested business people.

For example, Ireland has exempted artists from taxation: they receive all profits from the sale of their paintings. As for entrepreneurs, they are offered low-interest rates, regardless of the type of activity.

Malta

Citizenship of Malta is attractive for many reasons, but the opinion that a tax-free country benefits foreigners is firmly established. And this is indeed true: unlike other states, unique taxation conditions apply here. It is worth mentioning the following:

• there is no wealth tax
• there is no annual property tax
• there is no inheritance tax

The country’s legislation works to improve living conditions and diligently attracts the attention of wealthy foreigners. Malta’s actions yield results, so investors seek to obtain citizenship on the island.

The Netherlands

Despite recent changes in the taxation system, the Netherlands is popular. Foreigners are attracted not only by the country’s beauty but also by favourable conditions for the rich. Entrepreneurs are exempt from paying taxes if their profits fall into one of the following categories:

• interest
• licensing revenues
• dividends and capital gains outside the country

The Netherlands is one of the top tax-free countries and successfully uses the proceeds for its development. The list of advantages includes a liberal environment that favours business development, and the status of a reliable partner that maintains foreigners’ funds.

Cyprus

The island state attracts the particular interest of investors. This is largely due to the quick return on investment, but it goes further. A simplified taxation system is prepared for foreigners who want to enjoy the benefits of a non-taxed country.

Under current regulations, residents are exempt from paying taxes if:

• their capital is placed in foreign accounts
• property (money) is received as an inheritance

Low-interest rates apply to property tax, income tax and corporate tax. The latter is 12.5%, which indicates that naturalisation is advantageous. This is the lowest interest rate in Europe.

Conclusion

For those disinclined to support the economy of their home country, finding a safe tax haven within Europe doesn’t pose a problem. Countries have already prepared for the growing demand and are creating favourable conditions for foreigners. Thus, taxation optimisation brings results that can be easily noticed when assessing the quality of life, educational sphere and medical care for the better-off.

It is worth choosing the best country to relocate to and continue working in based on personal requirements. One can get the necessary help from experts who are familiar with the peculiarities of the systems of these and other countries.

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