Are you an Aussie expat business owner? Are you intrigued by the idea of paying less tax? If so, we encourage you to consider taking your business offshore. Not only this, but various countries will offer you a second residency if you set up your business there.
As you undoubtedly know, there are many benefits to attaining a second residency – you can read more in our previous post on this topic here. Some of these include: easier to travel, improved healthcare, a quality education system, tax benefits and more. So, establishing a second residency in a business-friendly country is a win-win situation. Before relocating overseas, it’s essential to explore the options available to you. This blog explains what an entrepreneurial visa is and the top five countries which provide the ideal visa program for startups.
Definition of an entrepreneurial visa
An entrepreneur visa is a temporary residence permit. Provided by various countries, this permit allows expats to develop their business overseas. This visa is designed for people planning to invest in an existing business or launch their own overseas. This gives you the opportunity to expand your business while achieving an optimal work/life balance.
Argentina has one of the fastest paths to citizenship. Anyone can be naturalised, provided they live in the country for at least two years. The only caveat being you must be physically present in Argentina for a minimum of six months each year and during the naturalisation process.
Not only is an Argentine passport easier to obtain than other European options (two, as opposed to five years), it is equally as powerful. As an Argentinian citizen, you can travel visa-free to 150 countries. This makes it the world’s 18th-best passport. In addition, with Argentina’s National Identity Document, citizens do not require a passport to travel throughout South America.
Along with a powerful passport, Argentina is also the ideal place to launch your new business. Argentina is renowned for its rapidly growing tech sector. This environment allows entrepreneurs to make valuable connections with fellow start-up founders in the region. In addition, Argentina is South America’s second-largest economy, with Latin America’s highest rate of university students. This provides your business with an eager, highly-skilled, innovative workforce, at a low cost.
The country’s biggest draw, however, may be its exciting culture. Buenos Aires’ bustling metropolis is colloquially known as, “the Paris of the South,” and it’s easy to see why. Argentina is home to a diverse community of expats and portenos (Buenos Aires residents), over 100 art galleries and 300 theatres, including one National Geographic which is ranked as third best opera house in the world.
So, if you’re seeking a rich cultural experience while running your business, Argentina is the ideal destination. And, if you operate an online business which generates income, the citizenship process is streamlined.
Do you still want to live in Europe, but are unsure of Spain’s long citizenship timeline and tax rates? Belgium is a great alternative. It has always been quite easy to attain Belgian citizenship. Prior to 2012, anyone could become a citizen after residing there for a short three years. Since then, the citizenship process has taken five years. Although longer, it is still a reasonable timeframe for a well-managed, low-taxing country.
You can obtain Belgian residency if you are willing to:
• Start a small business and hire at least one employee (part-time or full-time) or;
• You can demonstrate “significant means” to support yourself (generally around €1 million).
A key benefit of establishing a business in Belgium is its low cost. You will only need €12,400 in capital (or less, if you have a business partner). And, although Belgium has high income tax rates, there is no capital gains tax.
Another benefit of Belgian citizenship or residency is that you can attain dual citizenship. You are only required to be physically present for a few months per year (as long as you spend part of the year in Europe). And, a Belgian passport gives you the same freedom as a Spanish passport. This enables you to travel freely throughout Europe’s Schengen region.
In Belgium, you will enjoy an extremely high quality of life. Brussels, in particular, is an international city, which is at the heart of European business. Belgian universities are internationally-oriented, and courses are even offered in English. Each of these factors makes Belgium a fantastic place to establish your business.
When considering destinations to start a new business, Spain may not immediately come to mind as it is largely considered a tourist destination. However, this perception rapidly is changing. Spain offers a Start-Up Visa Program for skilled foreign employees and investors. This visa is easy to obtain, and once approved, you are granted a 12-month residency.
However, there are several conditions. You must remain in the country for the whole period. You must present a report from the Commercial Office, which outlines your business plan. And, you must demonstrate that you have sufficient money in your bank account to support yourself during the residency period. You can apply for the Entrepreneur Visa at the Spanish consulate.
There are significant tax benefits to starting a business in Spain. There, you will enjoy a Spanish company tax rate of 15% during your first two years in business. In subsequent years, you will be eligible for a 25% tax rate. Although these rates don’t exactly make Spain a tax haven, they are much better than countries like the US.
The key benefit of Spanish residency, however, is it enables you to spend 12 months in Europe. By contrast, tourists are only granted six-month visas. Does the prospect of travelling around Europe for a year while establishing your business sound appealing? If so, Spain is the ideal choice.
You may mistakenly associate Columbia with its dark past. If so, you’re missing out on one of the strongest markets and richest cultures in South America. To attain a second residency, you simply need $20,000 in capital for your small business.
When you have gained residency, you are only required to visit Columbia once a year. If this condition and a basic Spanish requirement are met, naturalisation only takes five years. With a Columbian passport, you have free access to more than 100 countries. Along with visa-free access to Central and South America, you can travel freely to 26 countries in Europe’s Schengen region. Columbia also offers dual citizenship. So, you won’t need to renounce your Australian citizenship to live there.
What sets Columbia apart for entrepreneurs, however, is its thriving business culture. Its economic stability makes Columbia an attractive destination for investors and expats. This is partly due to the burgeoning start-up scene. A large portion of Columbian startup founders are computer science and engineering graduates. This gives entrepreneurs access to Latin America’s second-largest skilled labour workforce.
The growing technological ecosystem further benefits from Columbia’s low taxes. In Columbia, national companies are taxed on their worldwide income. The current corporate income tax rate is 35%.
Beyond this, Columbia is known for its vibrant culture. You will love Columbia’s diverse, organic food, modern shopping precincts, sophisticated restaurants and electric nightlife. And, you’ll be mesmerised by its breathtaking natural beauty, pristine coastline, stunning rainforests, historic neighbourhoods and more.
Are you operating a larger business? In this case, you likely qualify for Ireland’s Residency for Advanced Entrepreneurs. Its attractive 12.5% corporate tax makes it the perfect destination for small and large companies. You can set your business up with a mere €300,000, pay minimal corporate tax, live in a fantastic jurisdiction, have full access to Europe and qualify for Irish residency.
The Ireland Startup Entrepreneur program grants you two years of residency. At the end of this period, you have the option to renew it for three years. To qualify, your business must be under five years old and based in Ireland. Your innovative company must employ at least ten people, and earn €1 million in turnover in three years. And, the startup founder must provide €50,000 of capital (with €30,000 for each subsequent partner).
Ireland offers one of the world’s best passports. It grants you visa-free travel around Europe and access to over 170 countries, including the United States and Canada. And, you can obtain an Irish passport even if you don’t have a large business.
You may also be granted citizenship if you have Irish ancestors. Similar to Italy, you can claim Citizenship by Descent if you can prove you have an Irish parent or grandparent. If you choose this option (generally cheaper and faster), you can reside in Ireland as much or as little as you wish.
Ireland offers much more than a straightforward citizenship and residency plan. The country also boasts some of the most business-friendly policies and lowest taxes in Europe. And, with one of the highest levels of economic freedom in the world , Ireland is a destination of choice for entrepreneurs.
Have you always wanted to set up a business overseas, while potentially gaining a second residency? For personalised advice on establishing your startup abroad, call or email the experts at Expat Taxes today.
References cited: https://www.heritage.org/index/country/ireland