Where is the best place to register a Start-Up?

In this article, we will look at the most popular jurisdictions for registering startups, their advantages and disadvantages, as well as the key factors to consider when choosing a place to register your business.

However, let’s start with what should be considered a startup.

It is worth noting that the term “startup” does not have a unified definition, therefore, certain criteria are used to determine whether a particular business can be classified as a startup. Although these criteria may vary from jurisdiction to jurisdiction, they can generally be divided into two main groups:

Criteria relating to the general characteristics of the company:

1. Criterion on the period of the company’s existence (e.g., a company less than 5 years old).
2. Criterion for the number of employees (for example, less than 50 employees).
3. Criterion for the company’s annual turnover (for example, less than $10 million).

The company’s potential:

1. The company’s potential for rapid growth (e.g., the ability to increase revenues several times in a short time).
2. The criterion of innovation (for example, the development of new technologies or unique products).

The above list can be considered general criteria for defining a startup. They can be applied simultaneously, or some of them can be applied, again, depending on the jurisdiction and the existence of a special legal regime for startups in the legislation of a particular country. Below you will see how these criteria are implemented in the legislation of Spain and Italy (countries with special legal regulations regarding startups).

It is worth emphasizing that not all jurisdictions define the concept of a startup and its characteristics. Therefore, in order to be considered a startup, it is often important to meet the criteria of innovation and riskiness with a small number of employees and, accordingly, a low level of turnover.

And if you have already determined that your activity meets the characteristics of a startup, but the company is not yet registered anywhere, the next step is to choose a place to register your business. In this case, this article will be useful to you.

So, before choosing a jurisdiction to register a company, it is important to consider the specifics to ensure the best conditions for your business development. Ask yourself the following questions to make the best choice:

1. Does the jurisdiction meet the needs of your startup? For example, if your startup is in financial technology, does this jurisdiction have favorable legislation for FinTech companies?
2. How do your investors feel about the chosen jurisdiction? For example, if your main customers or partners are in the EU, you should consider EU countries for company registration. You may need to decide to have two companies: one in the US and one in the EU. It is also important to consider the location of your target market and choose a country of incorporation that will not hinder your ability to attract customers or do business.
3. Are you planning to set up a physical office? Let’s take Singapore, for example. To register a business in Singapore, you do not need to have a physical office, reside there, or hire Singaporean employees. All forms can be filled out remotely. It is also possible to open a business in Estonia and draw up all the documents online.
4. Is it easy to find qualified specialists if you are planning to set up an office? For example, in countries with a strong technical education, such as Germany, it is easy to find IT specialists.
5. What is the political and economic situation in this country? For example, stable countries such as Switzerland or Singapore may offer a more predictable business environment than countries with an unstable political situation.
6. What are the tax rates for companies in this jurisdiction? Are there any benefits or special conditions for startups? Are there any double taxation treaties?
7. What are the requirements for financial reporting? What are the costs associated with accounting and auditing?
8. How easy is it to register a company?
9. What licenses and permits are required to run your type of business? What are the regulatory requirements in your industry?
10. What is the level of intellectual property rights protection in this country?

And if you can answer the first part of these questions yourself and choose the right jurisdiction for this purpose, then we are ready to help you with accounting and legal issues and adjust your choice in accordance with your existing requests.

Historically, a number of the most popular jurisdictions in the IT world have emerged, which (including our clients) choose to start their own business:

1. Republic of Cyprus;
2. Estonia;
3. Delaware

Republic of Cyprus

Estonia

Delaware

In conclusion, the choice of a jurisdiction for a startup depends on many factors, such as tax conditions, ease of incorporation, growth opportunities, and support for innovation. Estonia, Delaware (USA) and Cyprus offer unique advantages that can meet the needs of different startups.

However, depending on the specifics of your business, other jurisdictions may also be considered. For example:

• Countries where a foreigner can start a business without an agent, local director, or visa: Estonia, Great Britain.
• The most attractive tax incentives for foreign entrepreneurs wishing to relocate to another country: Portugal.

Choosing the right jurisdiction will help you optimize costs, provide legal protection, and gain access to the markets you need to grow your startup. Taking into account your unique business plan and needs, we recommend that you contact our experts for a detailed analysis and selection of the best jurisdiction for your startup.