How to choose a jurisdiction: five questions to ask first
Updated: 2 days ago
People often start with a country name they’ve heard. A better start is five questions. They narrow the field quickly and show you what a structure will really involve.
1. Where are you and your owners resident for tax?
This matters more than anything else. Where you live decides how the company’s profits are taxed in your hands, and whether rules on foreign-controlled companies apply to you. A jurisdiction that suits a resident of one country can be a poor choice for a resident of another. Take advice where you live before you commit.
2. What will the company actually do?
Holding shares, invoicing clients, owning property, holding intellectual property and trading goods are different activities. They are treated differently by tax authorities and by banks. Some activities, such as holding, financing or intellectual property, can also trigger local requirements to show real activity in the jurisdiction. Know the answer before you choose.
3. What will have to be reported, and to whom?
Compare jurisdictions on what the company files each year, whether accounts or an audit are needed, who appears on any public record, and how ownership information is held. Then ask how reporting under international standards applies to you. A structure with light annual paperwork can still involve reporting obligations where you live.
4. Can you realistically open a bank account?
Choose with banking in mind from the start. Some jurisdictions are more readily accepted by banks than others, and banks look closely at the business, the owners and the countries involved. Our [banking guide] explains what they look for. A cheap company that can’t bank is not cheap.
5. What will it cost in total, in year one and every year after?
Add up the set-up cost, the annual government fee, the registered agent and office, accounting, any audit, and the cost of your time. Compare jurisdictions on annual cost, not just the price on the day you form the company. Our [fees page] shows how we present this, and we give you a written quote before you commit.
A quick way to use the answers
If your answers point to the EU or the UK, look at Cyprus, Ireland, Malta, Jersey, the Isle of Man or the UK structures
If you need a neutral holding company, look at the Caribbean and Atlantic options, or Mauritius and the Seychelles
If you have US or Asian counterparties, look at Delaware or Hong Kong
If a structure needs to be accepted widely by banks, put that first and let it narrow the list
These are starting points, not recommendations. The right answer depends on your own facts.
Compare them side by side
Our Compare Jurisdictions page sets all 22 next to each other on tax, obligations and fit.
Talk it through
A consultation takes you through these five questions with an adviser and ends with a written comparison. Book a consultation.
This article is general information, not legal, tax or financial advice.
