The selection of a country that is suitable for business purposes is, of course, influenced by numerous factors. Thus, the definition of the term “right country” can vary greatly, based on the business objectives of a foreign entrepreneur.
In most of the cases, each jurisdiction provides its set of advantages that makes it an attractive destination for starting a company; however, as a general rule, the decision of opening a company in a foreign country should be based on factors such as:
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- the share capital required for a specific business form;
- the investment policies addressed to foreign investments;
- the economic, political and social stability of the respective jurisdiction;
- the investment incentives addressed to a specific business sector;
- the tax deductions and exemptions offered by the local authorities;
- the costs associated with the employment;
- the costs with running an office in the selected country;
- the variety of legal entities that foreign investors are allowed to register.
The advantages of opening a limited liability company in a foreign country
Other factors can also influence the decision of investing in a particular country. When referring to the company types available for incorporation, in most of the cases, regardless of the jurisdiction, foreign investors prefer to open a limited liability company – this business form, which is also known as a private limited company or company limited by shares, depending on the legislation of a given state, provides the highest level of protection towards its founders (known as shareholders) as their liability is limited to the amount they have invested in the company.
This business form can be found in all the European countries, but the requirements for its incorporation can vary greatly. For example, a limited liability company in Luxembourg requires a capital of EUR 12,500, while for the same company type set up in Ireland there aren’t any capital requirements. In other regions of the world, such as the Middle East, this company type needs a higher minimum share capital. Businesses registered in Qatar as limited liability companies have to be incorporated with a capital of approximately EUR 49,000.
In this region of the world, investors can experience limitations regarding the company’s foreign ownership. As a general rule, 100% foreign investments are permitted in few specific economic activities, while in the case of companies registered throughout Europe by foreign investors, there are almost no restrictions and such regulations can also influence the decision of starting a business abroad.