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  • Writer's pictureCreimerman Product Team

The Key Advantages of countries with Territorial Tax Systems: Georgia, Singapore, and Hong Kong.


When it comes to setting up a business, entrepreneurs often face the challenge of high tax burdens that can significantly impact their profitability. However, certain countries offer attractive incentives by creating tax-free territories. In this article, we will explore three such locations: Georgia, Singapore, and Hong Kong. We will delve into the key reasons why these countries have become popular choices for entrepreneurs seeking to maximize their profits by operating in jurisdictions with no territorial taxes.


1. Georgia: A Business-Friendly Haven

Located at the crossroads of Europe and Asia, Georgia has gained recognition as an attractive destination for entrepreneurs. Here are some key reasons why establishing a business in Georgia is advantageous:


a) Territorial Tax System: Georgia operates on a territorial tax system, which means that businesses are only taxed on their Georgian-sourced income. This favorable tax regime exempts foreign-sourced income, making it an ideal location for businesses with global operations.


b) Low Corporate Tax Rate: Georgia boasts one of the lowest corporate tax rates globally, currently at a flat rate of 15%. This competitive tax rate significantly enhances the profitability of businesses, allowing them to retain a larger portion of their earnings.


c) Ease of Doing Business: Georgia has implemented several reforms to streamline its business environment. It offers simplified administrative procedures, efficient registration processes, and a transparent regulatory framework, making it easier for entrepreneurs to start and operate their businesses.


2. Singapore: Asia's Financial Hub

Known for its robust economy and pro-business environment, Singapore has emerged as a global financial and commercial hub. Here's why Singapore is a preferred choice for entrepreneurs:


a) Territorial Tax System: Similar to Georgia, Singapore adopts a territorial tax system, meaning that only income derived from Singapore is taxable. Foreign-sourced income, including dividends and capital gains, is generally exempt from taxation.


b) Favorable Corporate Tax Rates: Singapore offers one of the lowest corporate tax rates worldwide, with a maximum rate of 17%. Additionally, newly incorporated companies may enjoy significant tax exemptions for their initial years of operation, further reducing their tax liabilities.


c) Strong Infrastructure and Connectivity: Singapore boasts excellent infrastructure, including world-class transportation systems and state-of-the-art communication networks. Its strategic location provides easy access to markets across Asia, making it an ideal base for regional and international business expansion.


3. Hong Kong: Asia's Financial Powerhouse

Renowned for its vibrant economy and business-friendly policies, Hong Kong has long been a global financial powerhouse. Here are the key reasons why entrepreneurs choose Hong Kong as their business destination:


a) Territorial Tax System: Hong Kong operates on a territorial tax system, ensuring that only income sourced within the city is subject to taxation. Foreign-sourced income is generally tax-exempt, offering businesses greater flexibility and reduced tax liabilities.


b) Low Corporate Tax Rate: Hong Kong imposes a flat corporate tax rate of 16.5%. This competitive rate, coupled with the absence of capital gains tax, withholding tax, and sales tax, makes Hong Kong an attractive jurisdiction for businesses looking to optimize their tax burdens.


c) Robust Financial Infrastructure: Hong Kong boasts a sophisticated financial ecosystem with well-established banking, legal, and accounting services. Its stock exchange is one of the world's largest, providing businesses with access to capital markets and facilitating growth opportunities.



Establishing your business in a tax-free territory can be a strategic move to minimize tax burdens and maximize profitability. These countries, with their territorial tax systems, low corporate tax rates, and business-friendly environments, present attractive options for entrepreneurs seeking to expand their operations while optimizing their tax liabilities. By taking advantage of the unique incentives offered by these countries, businesses can position themselves for success in the global marketplace.



So, if you are interested in finding out more about tax friendly countries and its opportunities to develop business, contact us today! Below this article, you will find a link to set up a free fifteen-minute consultation with us to discuss your options further.


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