The location of a new IT company can have an impact on the manner in which the business develops, and there are more criteria to consider apart from taxes. This article looks at three different business jurisdictions, how their IT sectors have developed and what advantages they offer to new businesses.
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Conditions for starting an IT company in Singapore
Singapore is one of the main tech hubs in Asia. The city-state has a good infrastructure and companies in the IT sector benefit from government support. Programs offer special subsidies for companies that purchase equipment or if they train employees.
Company incorporation in Singapore is straightforward and the process can even be performed online. The city-state attracts local and international talented IT employees and the local intellectual property laws allow for good protection of innovative ideas and designs in the tech sector. Singapore is also known for its low taxation regime: the corporate income tax in Singapore is 17% and a tax exemption exists for the first 10,000 SGD of the standard chargeable income and for 50% of the next 290,000 SGD of chargeable income. Start-up companies can benefit from a complete exemption on the first 100,000 $ of the chargeable income and another 50% exemption on the following 200,000 $ for the first three consecutive years.
Opening an IT company in Ireland
Dublin has become a hotspot for many international tech companies like Google or Facebook. The IT sector is on an onward trend not only because of the influx of companies that come for the low taxes but also because Ireland has a large number of talented and hard-working IT specialists.
Experts believe that the presence of international tech giants is also giving a boost to IT start-ups and smaller companies. Ireland offers tax incentives for R&D activities and joint ventures between local and foreign investors are favoured. The country has a low corporate tax rate of 12.5% for trading profits. Investors who want to open an IT company here can request legal assistance for setting up a business in Ireland.
How to establish an IT company in Spain
Spain has a significant ICT market and offers a great geographical advantage to all investors who want to base their IT business here. Investments in the IT sector are encouraged through the Digital Agenda for Europe plan, which offers various incentives, and a large number of Science and Technology Parks spread throughout Spain.
Spain offers opportunities in fintech, e-health, IoT, hardware, and software. The general corporate income tax rate is 25% and special rates may apply based on a double tax treaty signed by Spain. A tax credit of 25% can be obtained for R&D activities and 12% tax credit is available for technological innovations.
Moreover, special corporate income tax relief can be available to businesses established in Ceuta or Melilla because of their special geographical position. Picking the best jurisdiction to run your business from is important in term of taxation, accounting requirements, the protection of assets and overall ease of doing business.
As in any industry, the location of your new IT company matters. It can make the difference in attracting a client base or in the tax and incentives you can obtain for your types of services. The location you choose can provide you with an important marketing advantage, a crucial aspect for businesses that are just starting out.