Businesses are being formed all the time, all over the world. The best place to start your business will depend on your location and what you are seeking by using another location to form your business. Cyprus, Malta and low-tax states in the US are compared because of their considerable tax benefits, especially Malta, and their ability to benefit startups and small businesses. The benefits will be explained and compared to give you insight into which locations will be best for you to establish your business. 

Cyprus 

Cyprus is an island nation with a diverse population and a very friendly environment for business. English is spoken as the language of business in Cyprus providing a high level of accessibility for business in the nation. It is so popular with foreigners that it has the highest foreign nationals as a percentage of population out of any nation in the EU. The nation features a highly skilled labor force which is often multilingual. The benefit of this labour force is that they are on average more affordable to hire with low average hourly rates in comparison to other European countries. Their average hourly rate is half that of Germany and the Netherlands. Cyprus also has the youngest workforce of any country in the EU making them ideal for the fast pace of startups. The legal system of Cyprus is robust and widely regarded as being very business friendly. A foreign individual moving to Cyprus for the purpose of establishing a business does not have to pay tax on income which is generated through dividends or interest. They only need to pay tax on income which is generated from employment in Cyprus. 

Malta 

Malta offers many benefits to startups for opening their business in the country. Malta has physical proximity with the rest of Europe allowing for faster flight times and a greater degree of connectivity to Europe. The nation boasts an innovative framework for regulation which is helped by the island's small size as this allows entrepreneurs to access the authorities for assistance. Malta also offers robust and reliable infrastructure for telecommunications which greatly assists with convenience of doing business. The population of Malta is highly educated and often multilingual making them ideal candidates for employees. English is the primary language of business in Malta which increases its accessibility to global entrepreneurs. 

In addition to this, Malta is pushing for startup companies to be an integral part of Malta’s post-COVID economic recovery strategy. This means that Malta Enterprise, the investment agency of Malta, can give innovative businesses incentives of up to €1.2 million. Incentives are also extended to all new businesses in the form of up to €200,000 of financial assistance. This is part of the Business Start Schemes which facilitate an environment conducive to small businesses and startups. 

Low tax States in the US 

The US features many states with low or no income tax and capital gains tax. This can represent large savings in tax. However lenient the tax policies of the state in which your business operates may be, they will not exempt you or business from federal taxation. The US does boast a massive market in compensation for this as well as the ability to use the US as a platform for global exposure. The US business environment is on the whole very business friendly although this will vary from state to state. Some states are particularly business friendly such as Wyoming or Delaware with very lenient tax rates and many other business friendly policies. 

One of the best ways to establish a startup as a legal business entity in the US is to incorporate an LLC. This is a simple business entity which provides limited liability asset protection which is very useful for startups. For more information on LLCs and LLC formation services consider The Really Useful Information Company (TRUiC) as a resource.

Photo: TRUiC

Final thoughts

Cyprus, Malta and low-tax US states all offer their own advantages for forming a business in their jurisdictions. Cyprus offers a very conducive environment for business as well as a highly trained and youthful labour force. Malta offers very strong tax incentives in conjunction with a high degree of business support availability. This is compounded by the business infrastructure which the nation enjoys. Low-tax states such Delaware and Wyoming also offer their appeal as locations for startups due to their tax benefits and their access to the substantial US market. 

Disclaimer: The information provided in this article is being provided solely for informational and promotional purposes and should not be construed as investment, tax or legal advice.