Choosing where to incorporate is a decision you can make quickly, but its consequences will follow you for years. Invest a little more time at this stage and you’ll gain a strategic advantage. We always stress: this isn’t just a legal choice of jurisdiction; it’s a business decision that shapes every part of your company. Build a workable tax and operating model from day one.
To identify the “right” country, outline a detailed business structure (owners and their shares, owners’ tax residency, contractors, starting capital) and a basic business plan (target market, expected turnover/profit, products vs services, profit use: reinvestment or dividends, need for a bank account or payment systems like Stripe).
One of the most important questions is why you need a foreign company. Your goal usually defines the direction. Is it market entry, risk diversification, IP protection, tax planning, a change of personal residence, fundraising, or something else? A clear answer will either point to a single best option or narrow the field to a few contenders.
We’ve gathered everything that matters in one guide: jurisdictions, taxes, payment systems, and the most common mistakes entrepreneurs face when entering new markets.
Checklist for choosing the best country for business setup
Focus on six core criteria plus one bonus criterion before you register abroad:
- Taxes
- Ease and cost of administration
- Access to Banking and Payment processors
- Jurisdiction reputation & investor appeal
- Labor & service markets
- Regulatory restrictions and licensing
And last one - marketing & Go-to-Market (bonus)
Start with the total tax burden. Some taxes don’t change your final effective rate but do increase admin costs (e.g., VAT or Sales Tax compliance).
Tax models vary : a classic corporate income tax (CIT) (e.g., Poland) vs tax on or distributed profits (e.g., Estonia).
Multi-tier systems exist, too. A setup that’s perfect for one model can be awkward for another.
Review available tax incentives. CIT in Poland , for instance can halve from 19% to 9% for companies with turnover up to €2M.
Do not overlook shareholder-level taxes on dividends. Check whether a double tax treaty exists between your chosen country and your tax residency —treaties often credit or reduce withholding on dividends, royalties, and interest.
Discuss with WoBorders the ease of doing business in your shortlist. We’ll share hands-on experience with local bureaucracy. We have also written about why we consider Estonia the simplest place to start.
We’ll help you choose the country for your business
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List the services you need and confirm availability in each jurisdiction. Processors like Stripe, Paddle, and PayPal require incorporation in “supported” countries (e.g.,United States, United Kingdom, EU, Canada ), and banks may require a physical presence.
If you need access to fundraising, a deep talent pool, or specific licenses, add those to your comparison. The US, UK, and Ireland are investor-friendly, though the US has a more complex licensing and regulatory environment.
In the current environment, also confirm that you can open and run the company remotely.
Decide early which market you’ll target: the domestic market of incorporation or export of services.
First practical steps to setup a business abroad
If you’ve shortlisted 1–3 countries, handle these fundamentals:
- Who will own the company?
This may not dictate jurisdiction, but it is important
For example, when registering a business in Poland , we recommend having at least two founders. If there is only one founder, the company is considered a single-member entity (jednoosobowa spółka z o.o.). This form is legally allowed but has specific tax and social insurance implications. Even if the owner does not receive a salary from their company, they are still obliged to pay ZUS contributions, approximately 1,900 zł per month, similar to a sole proprietor.
Additionally, the formal ownership structure, share distribution, and actual business control can affect the personal tax obligations of the company’s participants. For instance, Ukrainian tax law requires Ukrainian residents to report foreign companies over which they have direct or indirect control.
If another legal entity owns your foreign company, ensure that you check how this affects your reporting requirements, banking processes, and tax considerations. Additionally, verifying the required set of documents for registration, collecting, notarizing, apostilling, and translating them may take a significant amount of time.
WoBorders can help you assess the ownership structure, identify risks, and propose solutions tailored to your specific case.
We’ll help you choose the country for your business
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- Founders’ agreement and participants’ rights
Even if your company has just two founders, it’s essential to define all key terms before registration; ownership shares, voting procedures, exit options, rules for profit distribution and decision-making, as well as how you’ll act in case of business sale or investor entry.
In some jurisdictions, these provisions may already be included in the default company charter, but standard templates rarely reflect the specifics of each business. In many cases, it’s worth developing a customized charter or even a separate shareholders’ agreement tailored to the company’s goals and ownership structure.
- Which type of company should you setup?
Changing the legal entity type later can be a complex and expensive process; therefore, it’s crucial to make the right choice at the outset. The optimal structure depends on multiple factors: the company’s goals, the ownership and management structure, the level of liability the founders are willing to assume, the preferred taxation model, and accounting and compliance requirements.
We’ve already covered which company type is best to register in the U.S., and you can also explore how the choice of legal form affects the registration process in Estonia.
- Share capital
Determine the size of your company’s share capital and how it will be funded—through tangible assets, intangible assets, or money. Many countries allow a minimum share capital of €1, but that doesn’t necessarily make it the right choice. The amount of share capital impacts not only the company’s liability but also its credibility and reputation. Some jurisdictions also impose a capital tax.
While the share capital doesn’t always have to be deposited immediately into a corporate account, doing so is often the simplest way to ensure the company has working capital for its early operations.
A separate aspect is the contribution of intangible assets, such as intellectual property rights to software. This typically requires an independent audit valuation, which can take time, so it’s advisable to plan. Intellectual property rights, trademarks, and patents can also be transferred to the company without adding them to the share capital, through a license or assignment agreement.
Such contributions can increase the company’s value, but are not mandatory.
- Regulations
Before registering your business, check whether your activity requires a license or permit. Beyond that, there are often lighter regulatory requirements that still deserve attention before launching operations. For example, e-commerce businesses in many countries must comply with data protection laws (GDPR), consumer protection standards, and return policies. Taking these aspects into account early will help you avoid delays after launch. Proper planning and compliance preparation before registration significantly reduce the risk of fines or unexpected costs after your business starts operating.
Top 7 Mistakes when registering a business abroad
- Not accounting for all taxes and fees
To fully understand your company’s tax obligations, track your entire cash flow. Define where the company will receive payments from, what it will pay for, and where the profits will go, that is into dividends, reinvestment, or expansion. Also, estimate your expected turnover and check which transactions may be subject to VAT or Sales Tax.
- Ignoring future business growth
Unplanned or rapid business growth can pose significant challenges. A company may face new tasks that weren’t considered when choosing its jurisdiction, such as higher profits, the need to attract investors, or obtaining additional permits. Planning for scalability early on helps avoid the need for restructuring or relocation later.
- Overcomplicating the company structure
Creating a company with an overly complex ownership or management structure can complicate taxation, slow down compliance checks by banks and regulators, and even make it harder to obtain a VAT number in some countries. A simpler structure is often more efficient, both for reporting and for maintaining business transparency.
- Choosing a country without essential services
Always verify whether the services you plan to use work with your chosen country and business model. For instance: stripe is unavailable in several Eastern European countries, PayPal has restrictions for certain offshore jurisdictions, Amazon requires a company to be registered in a supported country to process payouts. Before registration, ensure your jurisdiction is compatible with your payment systems, marketplaces, and financial tools, this will save time and prevent operational issues later.
- Selecting a jurisdiction based solely on client geography
Many companies selling products or services in the U.S. choose to open an entity there. This makes sense for B2C businesses, as American customers tend to trust domestic sellers, and local registration provides access to U.S. payment solutions. However, suppose your company serves only a few B2B clients in the U.S. who can pay abroad. In that case, it’s often more practical to register in a simpler, low-tax jurisdiction that still supports international operations efficiently.
- Underestimating administrative costs
Carefully calculate all operational and compliance expenses associated with maintaining your company. For example, in Cyprus, the costs of a resident director and secretary, a registered address, accounting, and auditing can outweigh the benefits of a low corporate tax rate or zero dividend tax for non-residents. Low tax doesn’t always mean low maintenance—balance your savings against your long-term management costs.
- Choosing an offshore without a specific need
Even in 2025, some startups still opt for traditional offshore jurisdictions like Belize, Panama, or Seychelles, and face numerous challenges: bank account rejections, ongoing compliance checks from banks, and reputational risks. In most cases, it’s far safer and more sustainable to choose a “low-tax but reputable” jurisdiction such as Estonia, Cyprus, or Ireland, which offer international credibility and banking stability.
Top 5 countries we recommend for international business setup
Tax on distributed profits, no complex reporting or audits, and easy administration.
Reduced CIT for SMBs, a relatively straightforward process for opening an account in a traditional bank, and government services designed to support both Polish nationals and foreign entrepreneurs.
One of the most profitable markets, with access to venture capital, a developed startup ecosystem, and strong investor interest.
One of the lowest corporate tax rates among European jurisdictions, no dividend tax for non-residents, and a stable legal system based on British corporate law.
Territorial taxation principle, which is income earned outside Hong Kong is not subject to local tax: simple administration, high financial stability, and convenient access to Asian markets.
If you are unsure where to start, contact us—we'll help you choose the right direction for your international company registration. When launching a business abroad, having accessible payment solutions and transparent reporting from the very first months is essential.
