Relocating a company to another country can be a good business opportunity: investors may find different and better chances to grow their business, they may have access to different corporate and taxation regimes and even benefit from the local, highly qualified workforce.
Why do investors choose to relocate their company to another country?
There are various reasons. One of the most important is a friendly business environment. Many countries have a business-friendly regime that fully encourages foreign entrepreneurs to set up a company there. A regime that is beneficial for doing business will include both a set of laws that allow for investor benefits and rights and a straightforward company formation procedure.
Luxembourg is a small country and one of the top financial centres in Europe because of its beneficial policies. The process of company formation in Luxembourg is easy for foreigners and when they base their business here, they also have the advantage of being closely located to other main EU countries.
A low-tax regime can be one of the primary reasons why investors choose to relocate their business to another country. Ireland, Cyprus and other EU locations offer these regimes. For example, companies in Malta are subject to a low corporate income tax rate and this can be an important reason why some investors may choose to relocate their business here.
The incentives programme, the full foreign ownership possibilities and other government incentives can encourage foreign investors to relocate their company to a different country, especially if the business field in which they activate is subject to preferential benefits in that location.
The local regime for other business structures, not only commercial companies, can also be a criterion for relocating a business. Several countries have beneficial regimes for opening a trust or a foundation and one example is the Dutch regime for opening a foundation.
Relocating a company to another country can help a business start anew, with more opportunities and in a more convenient and business-friendly regime. This is an important step, which investors should take after a thorough market research and an evaluation of the strengths and weaknesses of the new location.
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