Opening a Low-Tax IT Consulting Company Abroad: Options for EU-based Companies

Author

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Vlad Tudorie

Introduction & Key Criteria

When choosing where to open a secondary company for an IT consulting business, the goal is to minimize corporate taxes while ensuring the jurisdiction is stable, reputable, and operable entirely online. For us, operating as a Romanian company with a portfolio of clients who maintain operations in and out of Romanian, our criteria in looking at options include:

• an English (or Romanian) operating environment
• easy remote incorporation
• access to payment processors (Stripe, Revolut)
• availability of banking/fintech services
• ability to invoice EU clients (with or without VAT as appropriate)
• and ideally tax treaties to avoid double taxation.

Below we analyze top jurisdictions – both within the EU and outside – that best fit these requirements, detailing their corporate tax regimes, VAT implications, incorporation process, financial infrastructure, stability, and language accessibility.

Low-Tax Options Within the EU

Several EU countries offer favorable tax regimes for small businesses. Operating within the EU can simplify VAT handling for EU clients and ensure broad acceptance by EU banks and payment providers. We focus on jurisdictions with low or unique corporate tax structures:

Estonia (EU) – Deferred Corporate Taxation

Estonia’s system is unique: no corporate income tax on retained or reinvested profits, and a 22% tax only on distributed profits.

In other words, as long as profits are kept in the company (not paid out as dividends), zero corporate tax is due – allowing you to reinvest earnings tax-free.

Once profits are distributed (or used for non-business expenses), a flat 22% tax applies (this rate increased from 20% starting 2025).

Notably, dividends to non-residents incur no additional withholding tax in Estonia.

Estonia ranks highly for tax competitiveness and ease of business, thanks in part to its e-Residency program. Through e-Residency, foreign entrepreneurs can establish and manage an Estonian company 100% online.

The process is streamlined: one must first obtain an e-Residency digital ID (state fee ~€150), then register a private limited company (OÜ) online (state fee €265 for registration). If no board member resides in Estonia/EU, a local contact person service is required (≈€200–€400/year).

Apart from that, ongoing costs are low (accounting services can start ~€50/month). No physical presence is needed – even the digital ID can be picked up at an Estonian embassy. The business can be run remotely via Estonia’s advanced e-government portals.

VAT:

As an EU company, an Estonian OÜ can obtain an EU VAT number. Estonia’s standard VAT is 20%. If you strictly provide B2B services to EU clients with their own VAT numbers, you can apply the reverse-charge mechanism (no VAT charged on invoice).

VAT registration in Estonia is compulsory only if annual local taxable turnover exceeds €40,000. Below that, you may remain VAT-exempt unless you voluntarily register to use the reverse charge for cross-border B2B. For digital B2C services into the EU, Estonia’s EU membership means you could use the One Stop Shop (OSS) if needed. In summary, invoicing EU clients is straightforward – B2B services are usually zero-rated (with reverse-charge), and you can elect to handle VAT for B2C if applicable.

Financial infrastructure:

Estonia is very fintech-friendly. Stripe is supported for Estonian businesses (Estonia is on Stripe’s list of supported countries), and Estonian companies can easily open EU business bank accounts or use services like Wise. Revolut Business also supports companies registered in Estonia (and the owner being an EU resident). This means you can collect payments globally and pay contractors or expenses seamlessly.

Stability & Language:

Estonia is politically stable and a member of the EU (and Eurozone). Government services are highly digital. English is widely used in business and official e-services, so language is not a barrier. The legal system is predictable and business-friendly. Estonia also has an extensive network of tax treaties, which can help avoid double taxation on distributed profits.

Pros:

• Zero tax on reinvested profits, allowing unlimited growth without corporate tax until you take dividends.
• Ultra-modern e-government: fully online incorporation and management via e-Residency.
• Low incorporation cost (≈€265 state fee) and modest annual fees.
• EU member: easy EU client invoicing, access to EU payment processors (Stripe, etc.).
• Widespread English usage; highly stable, transparent business environment.

Cons:

• 22% tax due once profits are distributed as dividends (deferred, not eliminated).
• Requires an appointed local contact agent if no local directors (minor extra cost).
• Annual reporting and accounting required (as with any EU company, though compliance is fully digital).
• No special reduction for small profits – the benefit is primarily the tax deferral (unlike some countries with near-zero rates for small revenues).

Bulgaria (EU) – Lowest Corporate Tax in EU

Bulgaria offers a flat 10% corporate income tax, the lowest rate in the EU. This 10% rate applies to all corporate profits (no tiered rates) and has been stable for years. For a consulting business under 1M revenue, a 10% CIT ensures minimal tax leakage at the corporate level.

Moreover, Bulgaria’s personal tax is also a flat 10%, and dividends distributed to individuals are subject to a low 5% withholding tax (and 0% if paid to an EU corporate parent).

This means if you ever take profits out, the additional tax can be as little as 5% (or potentially eliminated via EU directives). Overall, the combined effective tax on profits + dividends can be ~14.5% at most – very competitive for EU.

VAT:

Bulgaria’s standard VAT rate is 20%. VAT registration becomes mandatory once annual turnover exceeds BGN 100,000 (≈€51k) in 2024, with the threshold rising to BGN 166,000 (~€85k) in 2025.

This relatively high threshold means a small consultancy might operate initially without VAT if serving local Bulgarian clients under that cap. However, for invoicing EU clients, one would likely voluntarily register for VAT earlier: cross-border B2B services are typically zero-rated via reverse charge (both you and the client need VAT numbers).

If not VAT-registered, an EU business client cannot easily account for VAT, so getting a VAT number is advisable once you have EU B2B sales (even below the threshold). Fortunately, EU reverse-charge and VIES reporting is standard procedure.

Bulgarian VAT returns are filed monthly (more frequently than some countries), which is an administrative consideration. For B2C services into the EU, a Bulgarian company could use OSS as well. Overall, Bulgaria, as an EU member, allows smooth EU VAT handling, with the added benefit of a high registration threshold for flexibility.

Incorporation & Administration:

Setting up a Bulgarian LLC (OOD/EOOD) is relatively straightforward. The process involves preparing incorporation documents (Articles, etc.), which for foreigners usually means working with a local lawyer or formation agent. In-person notarization of some documents (like specimen signatures) is needed, but this can be done via power of attorney if you cannot travel.

In practice, many foreign owners incorporate remotely by authorizing a local attorney. There is no requirement for a local resident director – you can be the sole owner and director. The minimum capital is low (typically ~€1). Formation can be completed in days once documents are signed.

Bulgaria does not impose hefty government fees for incorporation or annual business licenses – costs are mainly legal/agency fees, which are modest (often a few hundred Euros). Ongoing compliance is also relatively light: no annual franchise tax or fixed fees, just corporate tax returns and, if applicable, monthly VAT filings. Local accounting services are affordable (due to low labor costs).

Notably, no audit is required for small LLCs under certain size thresholds, reducing compliance burden.

Banking & Payments:

Being an EU company, a Bulgarian entity can open accounts in Bulgaria or anywhere in the EU. Local Bulgarian banks operate in English and online banking is available, though opening an account might require one visit. Alternatively, one can use fintech solutions: for example, Stripe supports Bulgaria, allowing you to accept card payments.

Revolut Business accounts are available for Bulgarian companies (Bulgaria is in Revolut’s supported country list).

Wise (formerly TransferWise) and similar fintechs also support Bulgarian business accounts, which can provide EUR IBANs.

In short, receiving client payments via SEPA, Stripe, or other gateways is fully feasible. If Bulgarian banking proves slow, you have the option to open the company’s bank account in another EU country as well (EU companies can bank anywhere in the Union).

Stability & Language:

Bulgaria is an EU member with a reasonably stable economy (classified as upper-middle income). While it has a higher perceived corruption index than Western Europe, it maintains a consistent pro-business tax policy (flat taxes) and is not subject to OECD or EU blacklists. Politically it’s stable as an EU/NATO member.

Language can be a consideration – Bulgarian (Cyrillic script) is the official language, so corporate documents and communication with authorities will be in Bulgarian. However, many service providers (lawyers, accountants) speak English and can handle translations. The cost of hiring local help is low.

All in all, a foreign owner can manage with English by relying on local professionals for filings.

Pros:

• Ultra-low 10% corporate tax – lowest in EU, straightforward flat rate.
• Only 5% withholding on dividends to individuals (0% if holding company in EU) – very low total tax on extracted profits.
• Low costs: incorporation and annual maintenance are inexpensive (no high state fees; accounting is affordable).
• EU member: full access to Stripe, Revolut, SEPA payments; easy to trade with EU clients (can use EU VAT system).
• No local director or substance requirements by law – can be fully foreign-managed.

Cons:

• Administration in Bulgarian language – need local agent/accountant to navigate filings (adds minor complexity).
• Monthly VAT returns if registered, meaning more frequent paperwork than jurisdictions with quarterly filings.
• Banking, while accessible, may require initial paperwork or visit (though fintech alternatives mitigate this).
• Perception: Some Western clients may be less familiar with Bulgarian companies (though it’s an EU jurisdiction with EU VAT, mitigating concern).
• Political/legal system is stable but not as robust as Ireland/Cyprus; one must ensure compliance to avoid bureaucratic hurdles.

Cyprus (EU) – Flexible Low-Tax EU Hub

Cyprus is a popular jurisdiction for international consulting and holding companies due to its favorable 12.5% corporate tax and flexible legal system. The standard corporate tax rate is 12.5% on net profits, similar to Ireland. This rate has been in effect for years and makes Cyprus very competitive within the EU. (There are proposals to increase it to 15% in the coming years to align with global minimum tax trends, but as of early 2025 it remains 12.5% for small and medium companies.)

In addition, Cyprus offers certain tax exemptions: for example, foreign dividends and capital gains from the sale of securities are generally exempt from corporate tax. These rules mean a Cyprus company can be advantageous if you ever hold investments or other income in the company.

In the context of an IT consultancy, the 12.5% flat rate would apply to your service profits.

Importantly, Cyprus imposes no withholding tax on dividends paid to non-resident shareholders. So if you own the Cyprus company, it can distribute profits up to you with 0% Cypriot tax on the dividend. This zero WHT policy is a big plus for avoiding double taxation. Cyprus also has a wide network of tax treaties and benefits from EU directives (Parent-Subsidiary, etc.), making international tax planning smoother.

VAT:

Cyprus’s standard VAT rate is 19%, slightly lower than most EU countries. The VAT registration threshold is only €15,600 annual turnover – quite low. In practice, any active consulting business will likely need to register from the start or soon after (above ~€15.6k revenue in 12 months).

Once registered, Cyprus uses quarterly VAT returns (less frequent than monthly filings in some countries). For B2B services to EU clients, Cyprus follows the EU rules: no VAT charged on cross-border services if the client has a VAT number (you’ll just zero-rate and list it in EC Sales List). B2C digital services would require charging VAT based on the customer’s country via OSS. Cyprus participates fully in the EU VAT system, so EU clients will find it familiar (they can verify your VAT on the VIES system, etc.).

One attractive aspect: if your consulting services are performed for clients outside the EU (say US or other regions), those services can be considered out of scope or zero-rated for VAT, meaning you might not charge VAT on exports. Also, if structured carefully, a Cyprus company could avoid VAT registration if it has exclusively foreign clients and minimal local presence – but this should be confirmed with a tax advisor.

Overall, invoicing EU clients from Cyprus is seamless, with the option to not charge VAT on many cross-border services and full EU VAT compliance when needed.

Incorporation & Remote Management:

Cyprus is known for its efficient company formation procedures, but note that local involvement is required. By law, incorporation documents must be filed by a licensed Cypriot lawyer. Thus, you’ll need to engage a Cyprus corporate service provider or law firm to set up the company. This is typically handled remotely by granting power of attorney to the lawyers.

The process includes getting a company name approved (which can be done online in a couple of days), preparing the Memorandum & Articles, and registering with the Companies Registrar. It usually takes about 1–2 weeks to fully incorporate a Cyprus private limited company (Ltd).

A Cyprus company must have a registered office in Cyprus and usually a company secretary based in Cyprus (often your law firm provides this service). Directors can all be foreign, but management & control is a key concept: to be treated as a Cyprus tax-resident company (and thus benefit from treaties and Cypriot tax law), it’s advisable to have a majority of directors in Cyprus or hold board meetings in Cyprus.

Many international entrepreneurs appoint a Cypriot resident director (or board member) as part of service packages to bolster the local substance (though it’s not strictly mandatory by law, it’s a common practice). This can increase costs slightly but ensures the company is clearly Cyprus-managed.

Speaking of costs: Incorporation packages range roughly €1,500–€3,000 (including first-year registered address, secretarial, filings). Annual maintenance (registered office, secretary, agent) might be a few hundred euros in subsequent years. Cyprus does require annual audited financial statements for all companies (even small ones), which is an extra compliance step (audit fees depend on activity but for a small consulting firm can be moderate).

Accounting and audit are a well-developed industry in Cyprus, but fees are higher than in Bulgaria for example. Budget perhaps €200–€500 per month for complete accounting+compliance services for a small company. The timeline to maintain: annual corporate tax returns (due the year following the fiscal year) and the audit, plus VAT quarterly if applicable.

Banking & Payments:

Cyprus, being an international financial center, has many options. Traditional Cypriot banks (e.g. Bank of Cyprus, Hellenic Bank) can provide EUR accounts, but in recent years they have tightened compliance – opening an account might require a detailed review and possibly a visit. Many small foreign-run companies actually opt to open an account in another EU country or use an EMI (Electronic Money Institution).

Since a Cyprus company is EU-registered, it can open accounts across the EU. Fintech solutions are widely accessible: for instance, Stripe supports Cyprus – you can sign up with your Cyprus business and accept payments easily. Revolut Business is available for Cyprus companies.

Other options include Wise Business, which supports Cyprus entities and can provide EUR, USD, GBP accounts for receiving client payments. Thus, receiving payments from EU or US clients is not an issue. Cyprus is also not flagged by payment processors (unlike some offshore jurisdictions), so Stripe and PayPal treat it as a normal EU business.

Stability & Language:

Cyprus has a long-established reputation as an international business hub. It’s an EU member with a stable democratic government. The legal system is based on English common law principles. English is effectively the language of business in Cyprus: though Greek is the official language, almost all service providers, government forms, and even courts accommodate English.

You will find that you can correspond in English with your Cypriot accountants and lawyers comfortably. Political stability is good, although being a small country, Cyprus’s economy is somewhat narrower – however, it has recovered well from past financial crises and remains friendly to foreign investment.

Tax laws are stable; any changes (like the mooted 15% rate) will likely exempt small businesses or be phased in with notice. Cyprus is also known for strong legal protections and EU-compliant regulations, giving confidence for the long term.

Pros:

• Attractive 12.5% flat corporate tax on profits; plus many exemptions (foreign dividends, most capital gains are tax-free).
• No dividend withholding tax to non-residents – easy repatriation of profits without Cypriot second-layer tax.
• Widespread English usage and familiar legal system (many lawyers trained in UK); straightforward to communicate and do business.
• Well-integrated in EU systems: full access to Stripe, Revolut, SEPA; respected by EU clients (invoices from a Cyprus Ltd are commonplace).
• Extensive tax treaty network and EU directives – reduces risk of double taxation if you’re also taxable in Romania (treaty can credit the 12.5% tax).

Cons:

• Incorporation requires a local provider (legal fees) and ongoing local administration (registered office, etc.), making it costlier than some other jurisdictions.
• Annual audit is mandatory, adding to compliance costs (even for small companies).
• VAT registration threshold is low (€15.6k), so you’ll likely have to handle VAT paperwork early on.
• To ensure tax residency and treaty benefits, you may need to establish management & control in Cyprus (e.g. appoint local directors or conduct board meetings there), which can complicate purely remote management.
• Banking with local banks can be bureaucratic post-2013; many owners use alternative banking arrangements.

Malta (EU) – Effective 5% Tax via Refund System

Malta offers a distinct tax system where the statutory corporate tax rate is 35%, but refund mechanisms reduce the effective tax dramatically for foreign-owned companies.

In practice, a Malta trading company (Ltd) owned by non-residents can achieve an effective corporate tax rate of just 5% on distributed profits. This is because when the company pays 35% tax on profits, the shareholder (you, as a non-resident) can claim a 6/7 refund of the tax from the Maltese authorities, getting back 30 percentage points and leaving only 5% tax paid.

The refund process is built into Maltese law and is part of the full imputation system, which ensures that company profits aren’t taxed twice (the 35% corporate tax is imputed to the shareholder, then mostly refunded). Notably, Malta has no further tax on dividends to the foreign shareholder once this refund is given – meaning after the company’s 5% effective tax, the profits can be distributed free of Maltese tax.

This makes Malta’s system one of the lowest effective corporate tax regimes in the EU for small foreign businesses.

VAT:

Malta’s VAT rate is 18% (standard). As an EU member, Malta follows the same VAT rules for cross-border services. The VAT registration threshold in Malta is relatively low (around €30,000 for services). An IT consulting company in Malta would likely register for a VAT number to deal with EU clients. B2B services to EU clients can be zero-rated (client does reverse charge).

Malta participates in the EU’s OSS/IOSS for any B2C digital services. Since English is an official language, dealing with Maltese VAT authorities and filings is not too onerous. However, keep in mind, if your Malta company is essentially exporting services and you have no local Maltese clients, you might not hit the registration threshold and could delay VAT registration – but many opt to register voluntarily to have a VAT ID for EU trade.

Overall, EU invoicing is straightforward, analogous to Cyprus or Ireland in practice.

Incorporation & Maintenance:

Incorporating in Malta is somewhat involved. You will need a Maltese notary or service provider to draft the Memorandum & Articles and file with the Malta Business Registry. While you can incorporate a company remotely, it typically requires engaging a local corporate service firm.

There is a minimum share capital of €1,165 for a private company (only 20% must be paid up). A Maltese company also requires a local registered office and usually a resident company secretary. Most foreigners use a corporate service provider who provides the registered address and often acts as secretary.

The costs in Malta are higher than in Cyprus/Bulgaria: expect incorporation packages in the couple thousand euros range. Annual maintenance (registered office, secretarial, compliance) can also be a few thousand per year. Additionally, because of the tax refund system, to actually enjoy the 5% rate you must go through the refund process after each dividend distribution.

This means the company first pays 35% tax on profits, then upon paying a dividend, you apply for the refund which is usually paid out by Maltese authorities within a few months. This process often necessitates an accountant’s assistance and waiting for the refund cash, impacting cash flow. Malta has mitigated this for groups by allowing a fiscal consolidation regime, but for a single company you will be claiming refunds post-factum.

Compliance in Malta includes annual audited accounts (audit is mandatory regardless of size), and tax filings. Professional services in Malta (accounting/audit) are well-developed but can be pricier than Eastern Europe. It’s common to budget a higher ongoing cost to run a Maltese company, but the trade-off is the effective tax saved is significant if profits are substantial.

Banking & Payments:

Maltese companies are generally accepted by payment processors: Stripe supports Malta (it’s in the list of supported countries), and Revolut Business is available as well (Malta is EEA). Opening a local bank account in Malta might require due diligence interviews; however, many Malta companies simply use international banking options.

Since Malta is in SEPA, a Maltese IBAN is not strictly needed – you could use a Wise or Revolut EUR account in another country for your Maltese company. Some fintechs (like Wise) might not yet support Malta business registration, but others do, and Maltese service providers often help set up accounts.

The key is that Malta is not blacklisted or restricted by major financial networks, so receiving and sending payments is fine – the only slight concern is Malta’s past inclusion on a FATF grey list (it was briefly grey-listed for AML, but has since been removed as of 2022).

Now Malta is compliant with international AML standards, so confidence is restored. Clients in the EU will generally be comfortable paying a Maltese company, and you can issue invoices and accept payments in EUR easily.

Stability & Language:

Malta is politically stable and part of the EU. It’s a very small country but has built a specialty in finance, gaming, and IT services. English is an official language in Malta, so all legal and governmental matters can be conducted in English (a huge plus for foreign owners).

The Maltese legal system is a mix of common law and continental law; contract law and corporate law align closely with EU norms. Using Malta gives you the benefit of an English-speaking environment with EU single-market access. The regulatory environment is robust (sometimes to the point of being strict, due to EU and OECD pressure).

The tax system’s legitimacy (refund mechanism) is recognized by the EU, though it’s under the watch of global reforms. Malta’s network of tax treaties and EU membership ensures that if you’re paying that 5% effective tax, it’s typically creditable elsewhere if needed.

Pros:

• Lowest effective corporate tax in EU (≈5%) for foreign-owned companies, via well-established refund system.
• English-language jurisdiction – one of the EU’s only truly bilingual English states, easing communication.
• Strong professional services sector (accounting, law) to support foreign investors; the system is designed to attract overseas business.
• No tax on dividends to non-residents and relief from double taxation due to full imputation.
• Access to EU market and financial services; compliant with EU law (not seen as a tax haven by EU since it adheres to directives, just offers refunds).

Cons:

• Higher complexity and cost: administrative overhead is significant (mandatory audits, numerous filings, handling tax refunds) and professional fees are higher than most other jurisdictions.
• You must pay 35% tax upfront and then claim refunds, which ties up cash and requires correct paperwork (though eventually reducing tax to 5%).
• Need for local service providers for incorporation and secretarial roles; cannot fully DIY the setup.
• International scrutiny: Malta’s system, while legal, is often under the lens of EU/OECD; future reforms could potentially alter the refund mechanism (though none imminent for small businesses).
• If profits are low, the savings might not justify the costs – Malta’s advantages shine with higher profits that make the 5% effective rate worth the extra compliance effort.

Ireland (EU) – Moderate Tax with Start-Up Incentives

Ireland is an English-speaking EU country known for its 12.5% corporate tax on trading income. This rate is not as ultra-low as Bulgaria or Cyprus, but Ireland offers other benefits: it’s highly reputable, has no complexity in its tax (straight 12.5%), and provides certain tax reliefs for new companies.

In fact, Ireland has a start-up relief scheme (Section 486C) that can effectively make your corporate tax zero for the first 3 years if your tax due is ≤ €40,000 per year. That roughly corresponds to €320k profit at 12.5% rate. However, professional service companies are excluded from this start-up relief.

An IT consulting firm likely falls under “service company” (providing professional services), meaning you wouldn’t qualify for the 0% startup exemption. Thus, you should expect to pay the normal 12.5% rate on profits. (If your business were eligible, any tax due between €40k–€60k would get partial relief, but again IT consulting typically doesn’t qualify due to the exclusion for service companies.)

From 2023, Ireland’s corporate tax system has a new wrinkle for domestic companies: profits above €250k are taxed at 25% (with a sliding scale between €50k–€250k) – but this applies only to companies with Irish-controlled management. If you as a foreign owner manage it from abroad, the company might not be considered Irish resident for that rule, depending on circumstances.

In practice though, most small firms still pay 12.5% on trading income (the 25% is for passive/non-trading income, or for very large resident companies due to a recent tiered system). We’ll assume 12.5% as the relevant rate.

VAT:

Ireland’s standard VAT is 23%. Threshold for VAT registration for services is €37,500/year. If your consulting revenue stays below that and you only provide B2B services cross-border, you might not need to register initially. But many businesses register anyway to zero-rate B2B sales and claim any input VAT.

Invoices to EU clients: same EU rules (no VAT for B2B exports, collect Irish VAT for local sales or B2C EU until threshold, after which use OSS). Ireland uses the EU VIES system; being in Ireland means your EU clients can easily verify your VAT and do reverse charges. English-language invoices and legislation are a plus here.

Incorporation & Operation:

Ireland allows 100% foreign ownership and you do not need an Irish-resident director if you have an alternate bond or if one EEA-resident director is appointed. Incorporation can be done online through Ireland’s Companies Registration Office (CRO) system if you have an agent or by paper from abroad.

Many use formation agencies (cost ~€300–€500) to set up an LTD in a few days. The bureaucratic process is relatively simple, and being an EU country, compliance standards are high but straightforward (annual return to CRO, tax returns to Revenue). Ireland does require audited accounts only if your company exceeds certain size (small companies can claim audit exemption).

For a one-person consultancy under €1M, you’d qualify as a small company – meaning no mandatory audit.

The ease of doing business in Ireland is very high: corporate law is similar to UK, and everything is in English. Tax filings can be done online via ROS (Revenue Online System). If you don’t have a physical presence in Ireland, the company might be considered managed from abroad, but Irish law deems a company tax-resident by incorporation in Ireland (unless a treaty deems otherwise).

Professional services (accounting, legal) are more expensive than Eastern Europe but you might not need as much ongoing help once set up.

Banking & Payments:

Ireland is home to many international banks, but a small foreign-owned company might actually prefer fintech options. Stripe was founded by Irish entrepreneurs, and needless to say Stripe supports Ireland fully. Revolut Business accounts are available (Revolut has an Ireland-specific presence and of course supports EEA companies).

Traditional Irish banks (AIB, Bank of Ireland) can provide accounts, but they might require an initial meeting. There are also digital business banks like N26 or Bunq that accept Irish companies.

Given Ireland’s strong ties to the tech sector, payment processing and fintech integration is excellent – you shouldn’t face any roadblocks hooking your Irish company up to Stripe, PayPal, etc. Receiving EUR payments is straightforward via SEPA. Also, Ireland’s credibility means foreign clients (even outside EU) are very comfortable dealing with an Irish company.

Stability & Language:

Ireland is extremely stable politically and economically (it consistently ranks as a top destination for FDI in tech). English is the primary language, which is a major advantage.

The legal and regulatory environment is very transparent. Ireland has a robust treaty network and adheres to OECD standards.

One consideration: being in Ireland means being subject to any changes from the global tax reform. Ireland will implement the 15% global minimum tax, but only for multinational groups over €750M – irrelevant to your scale. Small companies will continue at 12.5%.

Pros:

• English-speaking EU jurisdiction – no language barriers at all in administration.
• Competitive 12.5% corporate tax rate, with potential startup tax relief (though not applicable to most consulting firms) that can eliminate tax in early years for qualifying trades.
• Very high international reputation (an Irish Ltd is seen as a “normal” company, not an offshore structure).
• Ease of setup and operation: straightforward legal system, audit exemptions for small companies, and no local director needed (EEA director suffices).
• Excellent access to payment processors, banking, and tech-friendly environment (ideal if using Stripe, etc., and needing things like Stripe Atlas – which by the way usually creates a Delaware C-Corp, but you already have Ireland as an option natively).

Cons:

• Corporate tax 12.5% – while low by Western standards, it’s higher than jurisdictions like Bulgaria, Cyprus, or zero-tax options. You’ll pay more in corporate tax here than in those low-tax havens (if minimizing tax is paramount).
• No special IT incentives (Ireland’s famed IP and R&D credits mostly benefit large companies). The startup relief is likely not available to consulting services. So you may end up paying the full 12.5% from day one.
• Costs: Local services (accountants, etc.) charge higher fees than Eastern Europe. Payroll costs if you hire locally are high.
• If you remain non-resident and manage the company from your country of residence, there’s a slight risk local authorities might claim the company has effective management locally (could be mitigated by demonstrating board decisions in Ireland or having a nominee director). Generally not an issue for small scale, but a consideration in theory.

Low/No-Tax Options Outside the EU

Outside the EU, there are several jurisdictions known for zero or very low corporate taxes and business-friendly regimes. These can further minimize tax exposure, though one must consider factors like access to EU markets (VAT, etc.) and banking. Below are top choices:

United Arab Emirates (UAE) – 0% Tax in Free Zones

The UAE (e.g. Dubai, Abu Dhabi, or other emirates) has long offered a tax-free environment for companies. As of 2023, the UAE introduced a federal corporate tax of 9%, but it exempts income up to AED 375,000 (~$102k) and – crucially – maintains a 0% rate for companies registered in designated Free Zones on their foreign-sourced income.

In practice, if you set up your consulting business in a UAE Free Zone and only serve clients abroad (which would be the case for a secondary company serving EU clients while you live in the EU), you can enjoy a 0% corporate tax rate on all your profits.

Free zone entities that comply with the rules (no doing business in the UAE market, etc.) are considered “Qualifying Free Zone Persons” and are taxed 0% on qualifying income (foreign/source outside UAE). Any UAE-source income (if you took on a UAE client, for example) would be taxed at 9%, but you can easily avoid that scenario.

Essentially, a properly structured free zone company can remain tax-free indefinitely for your consulting exports.

It’s worth noting the UAE’s new tax law still gives 0% on the first AED 375k of profit even for onshore companies. But since free zone companies already have 0% on all foreign income, that threshold doesn’t affect you unless you had some taxable local income.

Also, the UAE has no personal income tax.

VAT:

The UAE is not in the EU, so EU VAT rules don’t apply. The UAE does have a VAT (5% standard) but it applies to goods/services consumed in the Gulf. If your UAE company is providing services to EU clients, those services are outside the scope of UAE VAT (they are exported services). You would likely not charge any VAT on invoices to EU customers. Likewise, you wouldn’t charge EU VAT either since your company is outside the EU – your EU business clients would typically treat your service as an imported service and apply reverse charge on their end. For B2C services, the EU has rules requiring non-EU providers of digital services to register for the Non-Union OSS to collect EU VAT. If you plan to sell to EU consumers digital products, you’d need to handle that. But for B2B consulting, a UAE company can invoice without VAT, which is simple. One consideration: because you won’t have an EU VAT number, some EU corporate clients might ask for a tax residency certificate or proof you’re outside scope. But generally, invoicing from a UAE company to EU businesses is straightforward (no VAT on invoice, client self-accounts if needed).

Incorporation & Remote Management:

The UAE has numerous Free Zones (Dubai has over 30, other emirates like Abu Dhabi, Sharjah, Ras Al Khaimah, Fujairah have many as well). Popular ones for cost-conscious entrepreneurs include IFZA, SHAMS, RAKEZ, DMCC (though DMCC is pricier). These zones allow 100% foreign ownership and cater to international services. You would incorporate an FZ-LLC (Free Zone LLC) under the zone’s authority.

The process can often be done entirely remotely: you’ll submit documents (passport copies, business plan description, etc.), the free zone will issue incorporation papers and a license. In some cases, a one-time visit may be required for signing or opening a bank account – but many entrepreneurs have opened UAE companies without ever flying there by using agents and digital processes.

The incorporation typically comes as a package including a business license valid for 1 year, the registration fees, and sometimes a visa allotment (free zones often come with residence visa eligibility for owners, which you could use or not use).

Costs vary by free zone and license type. Some of the cheapest packages in 2025 are around AED 10k–20k per year. This covers the company setup and annual renewal of the license. For example, a Fujairah or Sharjah free zone might be on the lower end (around $4k/year all-in), whereas a Dubai free zone like IFZA or Meydan might be $5k/year, and premium ones like DMCC could be higher.

There’s usually a share capital requirement, but often it’s just a nominal amount that doesn’t have to be actually paid in (or can be as low as AED 1).

No local shareholder or director is required – you can be the sole shareholder and director. However, you will need a registered agent in the UAE or the free zone authority serves that role. Management is completely flexible; you manage your company from anywhere.

One benefit: you have the option (not obligation) to obtain a UAE residency visa as the company owner, which can be useful if you ever want to spend time in UAE or change tax residency. But if you don’t need it, you can run the company without a visa (some free zones might still include an “owner visa” in the package).

Banking & Payments:

Historically, opening a bank account for a UAE company was the tricky part – local banks have strict due diligence, and an in-person meeting in the UAE was often required. But alternatives have improved. Now, Stripe is available in the UAE, meaning you can use Stripe to charge clients and deposit funds. Stripe in UAE can deposit into local UAE bank accounts or certain fintech accounts.

If visiting the UAE is an option, you can open an account in a bank like Mashreq Neo or Emirates NBD. If not, you might use global business accounts: for example, transferwise (Wise) might not yet support UAE entities for full banking, but there are new UAE digital banks (like Wio, Yap) that are aiming at easy SME account opening.

Additionally, you could keep using a Stripe Atlas type arrangement where Stripe can route payments to a US account that you open. Since the UAE company is your vehicle, you could also consider opening a subsidiary or an account abroad to collect payments.

Revolut Business does not currently support companies based in the UAE (it’s limited to EEA, US, etc.), so that’s not an option. But other fintechs: for example, ADGM (Abu Dhabi’s free zone) has a digital bank called Zolve or you could open a wise account under your personal name for receiving money then transfer to UAE if needed.

It’s worth noting the UAE has currency stability (the AED is pegged to USD) and no restrictions on repatriation – you can freely wire money out of UAE to Europe. As for clients, some European clients might be unfamiliar with paying a UAE entity, but generally international wire or card payments to UAE are fine.

Many global consulting firms bill from UAE these days.

Stability & Business Environment:

The UAE is very politically stable (monarchy but highly secure, especially Dubai/Abu Dhabi). It’s a globally recognized business hub. There is some bureaucracy dealing with immigration, visas, and license renewals annually, but the government continually streamlines processes.

Laws are a mix of civil and Sharia influences, but free zones often use common-law style regulations for business. English is widely spoken in business; all official documents can be in English (some need Arabic translation for mainland, but free zones typically handle English documents and provide bilingual licenses).

Legal stability: UAE commercial law is solid, and the courts enforce contracts (though arbitration is common for international deals). The UAE has no corporate tax history until now, and even the new tax is very mild. Double tax treaties: UAE has many treaties.

The UAE is not viewed as a shady tax haven in recent years – it’s a legitimate economy, so having a UAE company carries less stigma than, say, a Caribbean offshore.

One must remember to meet substance requirements in free zones: under new rules, a free zone company must not have over 5% of income coming from UAE sources (the “de minimis” rule) to keep the 0% rate. If you stick to foreign clients, that’s satisfied.

Pros:

• Zero corporate tax on all foreign-sourced income for free zone companies. Truly tax-free for your consulting profits (no need to even defer distributions as in Estonia).
• No personal tax in UAE if you ever take salary/dividend there. Also no withholding tax on transfers abroad.
• Modern infrastructure: high ease of doing business, no audits for small private companies, relatively light reporting (mostly license renewal).
• Prestige factor: UAE (especially Dubai) is seen as a premier international business hub, not just an “offshore”. Clients often accept it well.
• English-friendly environment; very expat-driven economy.
• Option to relocate or get residence in the future, which could further optimize personal taxes (if desired).

Cons:

• Annual costs are higher than a simple EU company – ~ 4k–4k–4k– 6k per year in license fees and service costs, which is a fixed overhead irrespective of profit.
• Banking can be a hurdle – might require a UAE visit or using alternative banking solutions until sorted. Managing a bank account remotely (time zones, customer service) can be an inconvenience.
• Not in EU: no automatic EU VAT number – EU clients will treat you as a foreign entity. While that means no VAT to charge, some large EU corporates have more complex onboarding for foreign vendors.
• Legal system is not as familiar as EU; any dispute resolution ideally via arbitration. However, this is usually minor for a consulting business where you likely won’t have legal disputes.
• Need to renew license annually and keep in good standing (missing a renewal could cause penalties or cancellation). Also, if rules change, free zones might need compliance (e.g., economic substance filings for certain activities, though pure services currently have simple requirements).

Singapore – Low-Tax, High-Tech Hub

Singapore is a top choice in Asia for a stable, low-tax jurisdiction. The headline corporate tax rate is 17%, but Singapore provides generous tax exemptions for small companies. A new startup in Singapore enjoys a 75% tax exemption on the first SGD 100,000 of profit, and 50% on the next SGD 100,000 for its first 3 years.

This means, effectively, the first S$100k profit is taxed at only 25% of the 17% rate (so ~4.25%), and the next S$100k at half of 17% (~8.5%). In total, up to S$200k (≈US$150k) profit can be very lightly taxed – yielding an effective rate of ~5-6% on that band.

After 3 years, or beyond that profit, a partial exemption still applies: 75% off the first S$10k and 50% off next S$190k every year, so even ongoing, the first S$200k profit is effectively taxed ~8.5% each year. Practically, if your profit is under S$200k, you’ll pay only a few percent tax. Even if you reach S$300-400k profit, the effective rate stays moderate before hitting the full 17% on marginal increases.

Note: To qualify, the company must be a Singapore tax resident (managed from SG), have ≤20 shareholders, with at least one individual holding ≥10% (which you as an individual owner satisfy). It must not be a purely investment or property company. An IT consulting company qualifies for the exemption. So as long as these criteria are met (they would be in your case), you get this benefit.

VAT/GST: 

Singapore has a Goods and Services Tax (GST) of 8% (as of 2025, planned to rise to 9% in 2026). GST registration is required only if revenue exceeds S$1 million (~US$740k) per year. Likely your business would be below that, so you can operate GST-free (and you wouldn’t charge GST to clients unless you opt to register voluntarily).

In any event, for services exported out of Singapore (e.g. to EU clients), the GST is 0% (zero-rated) – Singapore does not levy GST on exports of services. So you would not charge any Singapore tax on invoices to EU clients. Similarly, EU clients wouldn’t see any VAT – you’re outside EU, so it’s their import.

This makes billing EU clients easy (no VAT/GST to add). If you have any Singapore clients, under the threshold you wouldn’t charge GST either.

Incorporation & Substance: 

Singapore is highly regarded for ease of incorporation – but it does require at least one director who is a Singapore resident (citizen, Permanent Resident, or someone with a work visa). This is a key requirement.

As a foreign entrepreneur not living in Singapore, you would need to engage a service provider to supply a nominee director (or alternatively, you can apply for an EntrePass or similar to become a resident director yourself, but that’s usually for those relocating or with significant plans in SG).

Nominee director services typically cost around S$2,000 per year. Aside from that, incorporation can be done in 1-2 days online via Singapore’s BizFile system through a registered filing agent. The typical path is to hire a corporate secretarial firm that packages incorporation, corporate secretary, nominee director, and registered address.

Costs for setup might be around S$3,000 including government fees, then annual fees for the nominee and secretary maybe another S$2k+. These costs are higher than an EU online setup but come with the territory in Singapore.

Singapore companies must also appoint a Company Secretary (who must be a Singapore resident as well) within 6 months of incorporation – usually your service firm fulfills this. Minimum paid-up capital can be as low as S$1.

Despite needing local officers, you can manage the company remotely. Board meetings can be held anywhere (though for tax residency it’s good to have some in Singapore or at least have the local director involved). In practice, as long as you have a nominee director, the company will be considered Singapore tax resident, and you (as the foreign owner) can run operations from abroad while the local director handles statutory duties as needed.

Compliance: Singapore requires an annual general meeting (can be done by resolution), an Annual Return filing to the regulator (ACRA), and annual tax filing to IRAS. Audits are exempt for small companies (≤S$10m revenue, ≤50 employees, etc.). So likely no audit needed for you. Singapore’s bureaucracy is very efficient and mostly online.

Banking & Payments:

Singapore is a banking powerhouse. You can open a corporate bank account with major banks like DBS, OCBC, UOB, often remotely or with a single director visit. Some banks allow remote opening if you use certain service providers. Alternatively, many Singapore companies use Wise Business, which does support Singapore companies (Wise has a presence in SG). Stripe supports Singapore – you can easily set up Stripe with a Singapore entity. Revolut Business also supports Singapore (both company and applicant country are on their list), as Singapore is one of the countries where Revolut has launched. So you could have a Revolut multi-currency account for your SG company. Additionally, Singapore companies can use local gateways and benefit from Singapore’s extensive fintech ecosystem.

Receiving money from global clients is straightforward – Singapore has no foreign exchange controls, and multi-currency corporate accounts are common (you can hold EUR, USD, SGD, etc.). For EU clients, you could even open an Euro IBAN account via TransferWise or a Singapore bank’s EUR account. Singapore’s reputation means clients won’t hesitate to wire funds there.

Stability & Language:

Singapore is one of the most politically stable and well-governed countries in the world. It consistently ranks high in ease of doing business and rule of law. English is the primary working language (laws and corporate documents are in English), so you face zero language issues. The government is proactive and pro-business. The legal system is based on common law and very efficient. Corruption is virtually non-existent.

Singapore has extensive tax treaties as well, but notably not with the US. Even without a treaty, foreign dividend withholding tax doesn’t exist – Singapore does not impose withholding tax on dividends (dividends are tax-free to shareholders under Singapore’s one-tier system). So if you ever repatriate profits to yourself, Singapore won’t tax that distribution.

One thing to keep in mind: being in Asia, time zone differences when dealing with European clients – but since you’ll be in Europe, that’s not a huge issue (you just run the company remotely in EU hours).

Pros:

• Very low effective tax on the first ~S$200k of profit due to startup exemptions (effectively ~5-8% in that range). Even beyond that, 17% headline is moderate and partial exemptions apply.
• Top-tier business environment: extremely stable, clear laws, and 100% English-speaking.
• Prestigious address: a Singapore company signals a serious, globally oriented business (no stigma).
• No dividend withholding tax; easy repatriation of profits. And if you ever decided to move there, personal tax can be low with territorial principle (but that’s another topic).
• Excellent banking and fintech access: Stripe, Revolut, banks – all available and world-class. Receiving payments from anywhere is easy (Singapore is a financial hub).
• No local tax on export of services (no GST on foreign sales), and no requirement to register GST until very high turnover.

Cons:

• Incorporation requires a local resident director and secretary, which means additional ongoing fees (a few thousand dollars per year for nominee services). This is a compliance hurdle not present in jurisdictions like HK or BVI.
• Higher formation cost and complexity than a simple online registration in EU. Paperwork needs to be filed by a Singapore corporate services firm.
• The 17% standard rate kicks in once profits grow – if you anticipate very high profits and plan to retain them, other places (like UAE 0% or HK with territorial taxation) could yield even lower taxes.
• Operating from afar: while Singapore administration is largely online, time zone differences and having to coordinate with a nominee director for certain actions could be slightly inconvenient.
• If you don’t have significant profit, the fixed costs (nominee, etc.) might outweigh tax savings, so Singapore shines when you’re making enough profit to use those exemptions fully.

Hong Kong – Territorial Taxation (0% Offshore, 8.25%/16.5% Onshore)

Hong Kong offers a blend of low tax rates and a territorial taxation system. The standard profits tax rate is 16.5%, but there is a two-tiered tax regime: the first HK 2million of profits ($US256k) are taxed at 8.25%, and profits above that at 16.5%.

So small-to-medium profits enjoy a half-rate. For example, if your company made HK$2M profit, you’d pay just 8.25% on that (HK$165k tax). If you made HK$3M, you’d pay 8.25% on first 2M and 16.5% on the next 1M, for an effective rate around 11%. This is already attractive.

However, Hong Kong’s defining feature is territorial taxation – only income sourced in Hong Kong is subject to profits tax. Income earned outside Hong Kong can be claimed as offshore and not taxed at all (0%). In practice, if your Hong Kong company provides services to clients overseas (EU, US, etc.) and you perform the services outside Hong Kong, you can argue those profits are offshore-sourced and thereby tax-exempt in Hong Kong.

Many entrepreneurs do exactly this: run a Hong Kong company for international business and pay 0% tax by filing an offshore claim. The IRD (Hong Kong tax department) may require you to substantiate that no part of the profit was made in Hong Kong (no local clients, no staff or base in HK generating the income).

If you have no presence or customers in HK, typically this offshore treatment is granted. It’s not an
automatic blanket – you may need to file an advance ruling or, more commonly, just file a tax return declaring no Hong Kong source profits. T

he HK tax authority might audit the claim and ask for evidence. Properly structured, your consulting revenue could be classified as offshore and escape tax entirely.

If for some reason profits were considered onshore (say you traveled to HK and executed some contracts there, or HK decides management is in HK), you still benefit from the 8.25% rate on the first HK$2M, and 16.5% thereafter – among the lowest rates in a developed economy.

There is no additional local tax on dividends (Hong Kong does not tax dividends or interest, only profits).

VAT:

Hong Kong has no VAT/GST at all. So you will never charge VAT on any invoice. To EU clients, your invoices would be treated as from a foreign entity with no VAT – the EU business clients would reverse charge if required. This is similar to any non-EU supplier, but the absence of any sales tax simplifies things.

EU customers might need to self-account for VAT for services (under “general rule” B2B services, the customer’s country VAT applies via reverse charge). From your side, it’s simple: no VAT compliance, no VAT registration anywhere (unless you do B2C digital services, then EU might force you to register for OSS despite being HK-based).

Incorporation & Management:

Incorporating a Hong Kong private limited company is fast (1-2 days if using standard electronic formation). You need at least one local company secretary (who must be a Hong Kong resident or a corporate service firm in HK) and a local registered address. Directors and shareholders can all be foreign (you can be sole director/shareholder).

So unlike Singapore, no resident director requirement – only a secretary. Typically, you’d hire a corporate services firm in HK to handle the incorporation, provide the registered address, and act as company secretary. Annual maintenance fees for this are a few hundred to maybe $1k USD per year depending on the firm. Initial incorporation cost might be around $1k as well (HK government fee plus service fee). The process can be done remotely; you courier in signed forms or use digital signature if allowed by the provider.

After incorporation, you’ll obtain a Business Registration Certificate and Certificate of Incorporation. The company needs to keep accounting records and file an annual profit tax return. Also, Hong Kong companies have to audit their accounts annually, but if you are claiming offshore status and have no tax to pay, you still technically need an audit to submit with a profits tax return (showing how profit is offshore).

This means hiring an auditor in HK – which adds cost (could be ~$1k+ per year). Many still do it because paying a small audit fee is worth saving potentially much more in tax. If you actually pay taxes, then you must do audit as well. So audit is mandatory for all, except very small dormant companies.

Banking & Payments:

Hong Kong used to be infamous for difficulties opening bank accounts for new companies (due to strict KYC after 2016). It has improved somewhat, and alternatives have emerged. You can try to open an account with a traditional bank like HSBC, but likely you’ll need to visit in person and prove connection to HK. Many small businesses opt for fintech: e.g. Airwallex, Statrys, Neat (now part of Rapyd) – these provide digital business accounts in HK that can receive and send money.

Also, since HK has no currency controls, you could open an account for your HK company in another country (for example, a Euro account in Neat or a Wise account linked to HK company). Stripe supports Hong Kong companies, so you can use Stripe and deposit funds into any bank account you link (which could be a Hong Kong or other account).

Revolut Business is not currently available for Hong Kong entities (their business service hasn’t launched in HK). But other options like Wise Business do support HK companies (Wise will ask for company registration docs, etc., and then you can get multi-currency IBANs). Also, Hong Kong being a financial hub, receiving international wires is commonplace.

From the client’s perspective, paying a Hong Kong company is usually fine; it’s a reputable jurisdiction. If they need to pay in EUR or USD, you can accommodate that with multi-currency accounts.

Stability & Legal:

Hong Kong has a strong rule of law tradition (based on British common law) and an independent judiciary. However, since 2020 the political situation vis-à-vis China has changed – although this mostly affects things like political rights, not business operations. The business law and tax system remain unchanged and separate from mainland China. Hong Kong is extremely stable economically, with a freely convertible currency pegged to USD.

All business is conducted in English (and Chinese) – all documentation, government interfaces (e.g. the IRD and Companies Registry websites) are bilingual. You won’t face language issues dealing with authorities or service providers.

Hong Kong’s tax treaties are limited compared to EU countries, but it does have a treaty with Romania (signed in 2015) which, for instance, caps Romanian withholding tax on dividends if you ever had a Romanian parent.

Pros:

• Possibility of 0% tax – if structured as offshore income, Hong Kong won’t tax your consulting profits at all. This is a huge benefit if successfully applied.
• Even if taxed, very low rates (8.25% on first HK$2M, then 16.5%). No other significant taxes (no VAT, no capital gains tax on most transactions, etc.).
• No VAT bureaucracy – simpler invoicing with no consumption tax to handle.
• Well-developed business environment and infrastructure; English language and familiar legal framework.
• Global banking and commerce hub – getting paid from anywhere is routine. Hong Kong dollar is stable and pegged to USD (reducing currency risk for USD dealings).
• No requirements for local directors (only a secretary), making governance flexible for a foreign owner.

Cons:

• Audit requirement and maintaining proper books – adds annual cost, even if small (this is a trade-off for the tax benefits).
• Banking can be challenging without visiting Hong Kong or using fintech alternatives; some extra effort may be needed to set up a convenient banking solution.
• Political changes have introduced a bit of uncertainty; while business continues as usual, some investors watch developments cautiously. That said, Hong Kong remains very business-friendly and has not introduced any capital controls or new taxes.
• Not in EU: no automatic access to EU payment systems (though SWIFT works fine). EU clients might treat you as more “offshore” compared to an EU company. But Hong Kong’s reputation is generally positive (not on EU blacklist or anything).
• Setup and annual services cost (company secretary, address, etc.) – though not extreme, it’s a few hundred USD a year you wouldn’t spend if operating in your home country.
• If you plan to repatriate most profits to Romania yearly, the benefit of 0% in HK might be partially offset by Romanian taxation of the dividend (though with planning, you could still come out ahead by timing dividends or using treaty rates).

United States (Delaware/Wyoming LLC) – No Corporate Tax for Foreign Income

The United States might not instinctively seem like a low-tax jurisdiction, but for a non-US entrepreneur, forming a US LLC (Limited Liability Company) can be an effective zero-tax vehicle for non-US income. Specifically, a single-member LLC formed in a state like Delaware or Wyoming that is owned by a non-US person is treated as a “disregarded entity” for US tax purposes.

That means the LLC itself is not taxed at the federal level; instead, the owner would be taxed on any US-sourced income. If the LLC’s income is entirely foreign-sourced (no US trade or business), then under US tax rules, no US income tax is due. In other words, a foreign-owned LLC paying no US taxes on foreign income effectively results in 0% corporate tax in the US (since the IRS only cares about US-connected income for foreigners).

For example, if your Delaware LLC provides consulting to EU clients and has no employees or offices in the US, those consulting profits are not considered “effectively connected income” with the US. The LLC owner (you) as a non-resident would not owe US tax on that foreign income.

The only US obligations would be an annual information filing (Form 5472) to report the disregarded entity’s existence and transactions, plus perhaps a state franchise tax/fee (Delaware LLCs pay an annual franchise tax around $300, Wyoming LLCs pay about $50). There is no US federal corporate tax in this scenario.

Do note: If you accidentally generate US-source income (say you also consult for a US client or have agents in the US), the situation changes and US tax could apply. But assuming you keep activities and clients outside the US, the LLC remains a tax-neutral pass-through.

Additionally, the US has no VAT or sales tax on services like consulting delivered abroad. So you wouldn’t be dealing with any consumption tax from the US side.

VAT:

From the EU perspective, your US LLC is a non-EU supplier. Similar to the HK or UAE case, you wouldn’t charge EU VAT. EU business clients would reverse charge their local VAT. For digital B2C services, you technically should register for EU OSS to collect VAT from EU consumers even as a US company (the EU requires non-EU providers to do so), but if your work is consulting to businesses, no issue.

Incorporation & Operation:

Forming a US LLC is extremely easy and cheap. Delaware is popular (well-known legal system), and Wyoming is also popular (low fees, anonymity). You can file formation through numerous online agents; it costs on the order of $150–$300 including state fees. The LLC Operating Agreement (internal document) can be simple. No requirement for US residents or directors – you can be the sole member and manager. The process takes a day or two.

Running the LLC: Since it’s disregarded, you don’t file a corporate tax return. As a foreign owner not engaged in US trade, you may not need to file an individual US return either (Form 1040-NR) – unless maybe to disclose something. You do have to file Form 5472 and Form 1120 pro forma each year to report the company’s transactions (this is a requirement introduced for foreign-owned disregarded LLCs). That filing is not a tax return per se, but an informational return (it’s important to do, as penalties for missing it are $25k). Many hire a CPA to file 5472, which might cost a few hundred dollars.

Also, depending on the state, there are some annual fees: Delaware’s franchise tax for LLCs is ~$300 per year. Wyoming’s annual report fee is $60 (if assets under $250k). No state income tax in Wyoming; Delaware doesn’t tax LLCs not doing business in-state aside from that flat fee. So very low maintenance costs.

No audit, no complicated accounting needed for US compliance (just keep records). However, US does not issue a “certificate of tax residency” for an LLC that has no US tax ID since it’s not taxed – which could be relevant if your tax authority asks for proof the company paid tax somewhere (it didn’t, because none was due). But you could simply show that the income was foreign and thus not taxed in US by law.

Banking & Payments:

A big advantage of a US LLC is access to the US financial system. Stripe readily supports US entities (Stripe’s home turf). In fact, Stripe Atlas is a service that helps foreigners set up a Delaware company and get a US bank account and Stripe account easily. You might not even need Atlas: you can directly open accounts. Options include Mercury Bank or Wise – Mercury is a fintech bank that lets non-US founders open a US business bank account online (they usually require an EIN, which you can get for your LLC via the IRS). The EIN (tax ID) application can be done by fax for foreigners or via services.

Once you have a US account, Revolut Business USA is available if the owner resides in a supported country (which you do: Revolut Business supports applicants residing in EEA for a US company as per Revolut’s criteria). But you likely won’t need Revolut given Mercury/Wise can handle multi-currency. Receiving wires, ACH, etc., is straightforward.

For EU clients, you can invoice in USD or EUR. If you invoice in EUR, you might use Wise to get a Euro IBAN tied to the LLC. Or simply invoice in USD – since no VAT, many EU businesses are fine paying an invoice in USD to a US entity (they’ll still account for reverse charge VAT in their country). The familiarity of dealing with a US company can actually be a plus in some cases (the US has a very above-board reputation in business).

Stability & Legal:

The US has one of the most robust legal systems. Delaware in particular has a very advanced business court (Court of Chancery) and well-defined LLC laws. You won’t worry about rule changes invalidating your setup – foreigners have used LLCs this way for many years. The only recent change was the introduction of the reporting requirement (5472) which is manageable.

The political situation in the US doesn’t directly affect an LLC doing no US business; taxes for such entities are unlikely to increase since they already don’t tax foreign income (and trying to tax it might drive businesses away).

One thing: starting 2024, the US is implementing a beneficial ownership disclosure law (the Corporate Transparency Act) requiring most LLCs to file a private report of their ultimate owners to FinCEN. As the owner, you’ll need to report your name, address, and ID info. This is not public, just a government registry to prevent illicit use. It shouldn’t impact legitimate business, but it’s a compliance to be aware of.

Pros:

• No corporate income tax on foreign-sourced income; LLC is fiscally transparent and the US taxes only US-source income for foreigners.
• Ultra-easy and fast setup; very low cost (tens to a few hundred dollars).
• Minimal upkeep: no complicated returns (just an info filing), and low fixed annual fees (no costly local agents needed beyond a registered agent ~$100/year).
• Access to the world’s largest financial system: easy integration with Stripe, PayPal, US banking, etc. Clients can pay via all standard methods.
• Strong legal protection and contract enforcement under US law, if that ever comes into play.
• The company is seen as a normal US business – no stigma or suspicions like some offshore entities might raise.

Cons:

• While the US won’t tax you, you must handle local taxation of the LLC’s profits.
• No automatic VAT handling – similar to other non-EU setups, dealing with EU VAT (especially B2C) means separate registration in EU. For B2B it’s fine.
• You’ll lack an EU presence, which might be a negative to some EU clients who prefer dealing within the single market. They might also withhold some tax on payments if they have domestic rules for non-EU contractors (though with services, usually not).
• If you do inadvertently have US-connected activity, US tax complexities jump in (effectively connected income, etc.). You must be cautious to keep it truly non-US.
• Beneficial ownership disclosure to US government (starting 2024) adds a minor administrative step.
• Banking, while accessible, still requires getting an EIN and sometimes providing additional verification since you as owner are foreign (Stripe Atlas or similar services can streamline this).

Comparison Table of Jurisdictions

Below is a side-by-side comparison of the key features of each jurisdiction discussed, to help visualize the differences:

(Table notes: “Stripe/Revolut: Yes” indicates the platform officially supports businesses from that jurisdiction. VAT info assumes primarily B2B services.)

Pros and Cons Summary

Each jurisdiction has its pros and cons, often trading off tax savings, complexity, and operational convenience:

• Estonia:
  • Pros – Tax deferral (0% until distribution), ultra-easy online management, EU presence.
  • Cons – Tax payable on distributions (22%), must use e-resident infrastructure, smaller local market (if that mattered).
• Bulgaria:
  • Pros – Very low 10% tax, simple flat regime, lowest cost EU setup.
  • Cons – Language barrier, monthly VAT returns, perception issues in some cases.
• Cyprus:
  • Pros – Moderate 12.5% tax, no dividend taxes, English-speaking, treaty network.
  • Cons – Requires local setup and audit, somewhat higher professional fees, low VAT threshold means early compliance.
• Malta:
  • Pros – Effectively 5% tax, English-speaking, strong legal system.
  • Cons – Complex tax refund process, higher costs, mandatory audit and admin, cash-flow impact as 35% paid then refunded.
• Ireland:
  • Pros – 12.5% stable rate, EU and eurozone, English language, high reputation.
  • Cons – Higher tax than others (if no startup relief), relatively higher local costs, outside Schengen for some operations (though not relevant for business per se).
• UAE (Free Zone):
  • Pros – 0% tax outright, no audit, prestige of Dubai, can obtain residency, no currency restrictions.
  • Cons – Annual fees are significant, banking can be an extra hurdle, not EU (distance/time zone).
• Singapore:
  • Pros – Very low effective tax for sizable small profits, excellent banking and infrastructure, English, strong IP protection.
  • Cons – Requires nominee director (cost), far from EU (time zone), moderate setup cost.
• Hong Kong:
  • Pros – Potential 0% with offshore status, otherwise low rates, no VAT, robust banking (though sometimes finicky), cosmopolitan environment.
  • Cons – Annual audit and some bureaucracy, political uncertainties, banking onboarding can be slow for some.
• US (Delaware/Wyoming LLC):
  • Pros – No corporate tax for foreign income, rock-bottom setup cost, easy access to Stripe/PayPal, global credibility.
  • Cons – As a disregarded entity you must consider home country taxes, and you operate outside EU legal framework (no EU VAT ID, etc.).

Conclusion

Choosing the best jurisdiction depends on your priorities: if zero corporate tax is paramount and you’re willing to manage a more offshore structure, options like a UAE free zone company or a US LLC or Hong Kong company can essentially eliminate corporate taxes on your consulting income.

These come with trade-offs in banking convenience and extra admin (and you must plan for how your local government will treat that foreign income to truly optimize overall taxes).

On the other hand, if you prefer an EU-based company for easier integration with clients and familiar legal environment, solutions like Estonia or Bulgaria offer very low effective taxes and easy management, while Cyprus or Ireland offer a balance of moderate tax and high stability/English usage.

For example, Estonia might appeal if you value reinvestment of profits (grow the business tax-free and pay yourself later) and an EU footprint.

Bulgaria or Hungary give the absolute lowest EU tax hit (10% or 9%), at the cost of a bit more local complexity.

Cyprus gives a friendly English-speaking base with a low 12.5% rate and no tax on dividends – a strong combo if you plan to keep some earnings offshore and maybe not remit everything to your home country immediately.

Ireland provides ease of communication and top-tier stability, accepting a somewhat higher 12.5% tax for that benefit.

Outside the EU, UAE stands out for 0% tax and a modern business milieu, suitable if you don’t mind the annual fees and ensuring your banking solution.

Singapore and Hong Kong both provide low-tax regimes in extremely developed financial centers, with Singapore being more structured (some tax but lots of incentives) and Hong Kong offering potential total exemption with an established offshore model – these might be attractive if an Asian hub or dealings in those regions interest you, or if you prioritize a stable of global banking options and don’t mind being outside the EU sphere.

Final recommendation: If you are EU-basedand serve EU clients, you may weigh an EU entity slightly more favorably for simplicity. Estonia could be ideal if you plan to reinvest profits or are comfortable deferring personal gains, whereas Bulgaria offers the lowest immediate tax hit if you intend to extract profits regularly (only 10% corporate and 5% dividend). Cyprus is another strong contender, effectively allowing you to keep earnings at 12.5% tax and then pay yourself without extra Cyprus taxes – useful if you might later relocate or otherwise mitigate local taxes on dividends.

If absolute tax minimization is the goal and you’re open to a non-EU structure, a UAE free zone company can give you 0% tax and a well-regarded international base (with the caveat of handling banking).

A US LLC via Delaware is the cheapest route to 0% tax and superb payment access, but requires careful handling of how those profits are eventually taxed personally in local jurisdiction.

In summary, all these jurisdictions are politically and legally stable and offer online management. The decision hinges on the trade-off between tax rate vs. administrative complexity and costs. An EU jurisdiction might slightly increase your tax payable but simplify operations with EU frameworks and lower subjective risk, whereas a non-EU jurisdiction can minimize or eliminate corporate tax but demands more proactive management of banking and cross-border formalities.

By considering the detailed comparisons above, you can choose the option that best aligns with your business goals and comfort level.