One of the advantages that an online business offers is that you don’t need to incorporate your business where you run it. Depending on your business type, you may incorporate it in a country that suits your business needs, customers, and your income. To incorporate an online business, you should look out for countries that value and appreciate online business. These countries ensure that your business runs successfully due to their business-friendly environment. Some of these countries include, but are not limited to the U.S., the U.K., Estonia, and Canada.

By looking overseas, you expose your business to new opportunities; lower operational cost and tax, substantial income, incentives and support system, and uncomplicated business registration. Since you are here to learn about the best places to incorporate an online business, let’s get right into it. But before that, let’s check out some of the criteria used in selecting these locations. They are:

 

• Low running cost
• Low tax
• Flexible requirements
• Government incentives
• Lenient rules and regulations
• Robust support system ● Developed economy

 

Countries to Incorporate an Online Business

New Zealand​: While you may be focusing on countries like the U.K. and the U.S., New

Zealand is a country that accommodates investors and business owners. According to the world bank in 2016, New Zealand tops the countries with the most business-friendly environment and the best country to start a business. The Government of New Zealand places no heavy restrictions on investors and e-commerce owners. Furthermore, the online portal for registration is easy to navigate, making it an easy task to reserve a name and incorporate your business in a few hours. Also, New Zealand welcomes foreign investors. Immigration New Zealand (INZ) provides many immigration pathways for foreign investors looking to establish their companies. These visa opportunities are created to allow innovators and business owners to settle comfortably in New Zealand while taking the time to attend to their business. Some of the pathways include Investors Visas, Entrepreneur Visas, and Global Impact Visa. New Zealand supports three business types. They are Sole Trader, Partnerships, and Limited Liability.

 

The sole trader business structure is the cheapest choice for business owners. As a sole trader, you don’t need to register as a company; as such, you have total control of your business. You can access some benefits that include low startup cost and management of all profits. The partnership structure allows you to share the operational cost, and it does not involve paying any income tax. Instead, the tax is shared among the partners involved in the running of the company. Finally, the Limited liability limits the responsibility of owners to share losses as the case may be. Regardless of all these, New Zealand provides a strong foundation to support investors, innovators, e-commerce owners to sustain their business. In fact, New Zealand offers many grants for young e-commerce and businesses. Some of these grants include The Maori Business Growth Support, Callaghan Innovation Funds, and The Flexi-wage Program.

 

Features of Business Incorporation in New Zealand

 

Business Structure:​ Sole Trader, Partnership and Limited Liability

Time to incorporate a business:​ 20 working days

Law:​ common law or Anglo-American legal tradition

Fee:​ NZ$132.25 (both reservation of name and incorporation)

Tax Rate:​ 28%

Minimum of Business Partner:​ 1

Visa Options for Foreigners:​ Investors Visas, Entrepreneur Visas, and Global Impact Visa

Resident Partner: Not Required​

Min. Secretaries: 0​

Resident Secretary: Not Required​

Minimum Capital: NZ$1​

Public Records: Yes​

Auditing: Not Required​

Return Filing: Not Required​

The United States of America​:- U.S.A incorporation systems seems like the best option for investors and e-commerce owners due to its accommodating nature. It’s one cheap and straightforward way to set up a business. Besides, it is easy to maintain, and it has a myriad of options for banking, transaction, and credit cards. You don’t necessecarily need to be a resident or citizen of the United States to incorporate your e-commerce. It is the same process for all business owners.

 

The incorporation is usually done at the state level. After registering at the state level, you will proceed to set up a registered agent. The registered agent can be the business owners or an individual legally allowed to receive documents in place of the business. Some of the most business-friendly states include Delaware, Wyoming, and Nevada due to their low operational cost and little or no tax. The process of incorporating for United States residents usually requires the social security number for verification. An Individual Taxpayer Identification Number (ITIN) is enough for foreign businesses. The United States usually lends money to small businesses and e-commerce owners as long as they’ve been running for more than two years.

 

Features of Business Incorporation in the United States

 

• Business Structure:​ Corporation, Limited Liability, sole proprietorship and partnership
• Time to incorporate a business:​ 1 day to two weeks depending on the state
• Law:​ common law
• Incentive:​ Yes
• Fee:​ Between $100 – $200 (both reservation of name and incorporation) depending on the location.
• Corporate Tax Rate:​ 21%
• Minimum of Number of Executive:​ 1
• Minimum of Business Partner: 1​
• Tax Treaties: It ​ varies.​
• Resident Partner: Not Required​
• Secretaries: 0​
• Resident Secretary: Not Required​
• Minimum Capital: $0​
• Public Records: No​
• Auditing: Not Required​
• Return Filing: Yearly​

 

The United Kingdom​: Generally, the United Kingdom incorporation is easy and straightforward. The registration could either be made electronically or by paper filing. The online registration can be processed within 24 hours, and it costs 10 euros. The paper filing, on the other hand, needs to be submitted physically to the appropriate office. It takes longer than the electronic form, and it costs 40 euros. The United Kingdom has three business structures. They are sole proprietorship, partnership, and limited liability. It allows only one person to control the business and sole beneficiary of all the profit. It’s also the easiest to maintain and has a minimal cost.

 

The partnership structure requires two individuals to maintain the business and share responsibilities as the case may be. Limited liability is the third company structure that makes a clear distinction between the business and the owner. Any accrued loss in the running of the company does not affect the personal income of the owners. The loss is the responsibility of the business finances.

 

Mostly, non-residents opt for the United Kingdom Limited Liability Partnerships (LLP) because of its 0% tax. This is referred to as tax neutral.

 

Features of Business Incorporation in the United Kingdom

 

• Business Structure:​ ​ ​sole proprietorship, partnership & limited liability
• Time to incorporate a business:​ 24 hours (online) – ten days (paper filing)
• Law:​ common law
• Fee:​ Between £12 – £100 (Registration via companies houses)
• Corporate Tax Rate:​ 0%
• Minimum of Number of Executive:​ 1
• Minimum of Business Partner: 2​
• Tax Treaties: It ​ varies.​
• Resident Partner: Not Required​
• Secretaries: 0​
• Resident Secretary: Not Required​
• Minimum Capital: £0​
• Public Records: Yes​
• Auditing: More than £7 million in ​ turnover
• Return Filing: Yearly​

Estonia:​ Estonia is popularly known for its e-residency, e-commerce, and tech companies. It is a country that focuses on the growth of e-commerce while neglecting complicated rules and requirements. According to Funderbeam, a global trading platform, Estonia comes third among countries with the highest startups per capita. This result shows that Estonia has an effective support system for startups, especially e-commerce. In Estonia, you can run your business openly in an accommodating environment. 99.6​ % of the transaction is done digitally. The incorporation of a company is done in just 15 minutes, and it comes with no income tax. There are about five types of legal entities to incorporate a business in Estonia. The best for e-commerce is the private limited company. To register your business structure in Estonia, you need to pay a state fee of €190. Private Limited Company owners don’t pay tax on income generated. Furthermore, businesses in Estonia also have the chance to benefit from the European Structural & Investment Funds (ESIF).

 

Features of Business Incorporation in Estonia

 

• Business Structure:​ – the general partnership; the limited partnership; the private limited company; the public limited company; the commercial association; and sole proprietorship.
• Time to incorporate a business:​ 2 days
• Law:​ civil law
• Fee:​ 190 euros
• Corporate Tax Rate:​ 0%
• Minimum of Number of Executive:​ 1
• Minimum of Business Partner: 1​
• Tax Treaties: Estonia taxes on income and capital​
• Resident Partner: Not Required​
• Secretaries: 0​
• Resident Secretary: Not Required​
• Minimum Share Capital: 25,000 euros​
• Public Records: Yes​
• Auditing: More than 4 million in​
• Return Filing: Monthly​

 

Conclusion

 

Gone are the days where your physical presence is needed before you register your business. Nowadays, you can reside in a different country and set up your business in another place. Regardless of where you eventually decide to incorporate your business, it would help if you considered your business’s goals. Ensure you pick a country that focuses on helping e-commerce and start-ups to grow. These countries, most often, have low taxes, generous incentives, and a business-friendly environment. Take your time to ensure your business grows tremendously.