Entering the International Market: Opportunities, Challenges and Jurisdiction Selection

The decision for a company to enter the international market is a strategically important one, helping to increase revenue and provide access to new customer segments and capital. However, this process is accompanied by several serious challenges, including legal, tax, and operational issues.

 

Key Criteria for Choosing a Jurisdiction for Business Operations When deciding on registering a company abroad, Juscutum recommends focusing on key criteria, including:

 

• Tax System and Tax Incentives. When choosing a country for registration, it’s important to evaluate not only nominal tax rates but also the structure of tax administration, the availability of incentives for startups, and the effectiveness of tax treaties. For example, the UAE, Cyprus, and Ireland offer favorable conditions for tech businesses and can significantly reduce tax burdens.
• International Reputation and Access to Markets. The reputation of a country on the international stage is crucial. Jurisdictions with high levels of business trust, such as the UK, the US, Singapore, or the Netherlands, enhance the legitimacy of your business in the eyes of investors and simplify access to banking and financial services, international exchanges, and funds.
• Access to Skilled Labor. The availability of a skilled workforce in the chosen market often becomes a decisive factor for companies in the tech sector. For instance, India offers a large number of highly skilled professionals at affordable rates, while the UK is a leader in AI in Europe, which influenced OpenAI’s decision to establish in this jurisdiction. Poland and Romania also remain attractive options for Ukrainian entrepreneurs when it comes to hiring specialists.
• Ease of Management and Digital Infrastructure. Countries that offer transparent and efficient administrative procedures significantly ease the lives of entrepreneurs. Estonia’s e-Residency program or the innovative approach to business registration in the UK allow entrepreneurs to manage their company remotely while enjoying the benefits of digital services.
• Operational Costs and Company Maintenance Expenses. This criterion includes both the initial costs of registration and the ongoing expenses for maintaining the legal entity, filing reports, office rent, and administrative services. Even if the initial costs in a jurisdiction are low, the overall cost of maintaining a company can become substantial over time.

 

Most Attractive Jurisdictions for Entrepreneurs in 2025

 

The Juscutum team analysed leading international rankings such as Doing Business, the Global Competitiveness Index, and other reputable sources, and highlighted the jurisdictions that offer the best conditions for IT businesses.

 

Cyprus

  Cyprus remains one of the most attractive jurisdictions for company registration due to favorable tax rates and a stable legal environment. A particular advantage is the special IP BOX tax regime, which allows for a significant reduction in the effective tax rate for companies working in intellectual property.  

Key Advantages:

 

• Low base corporate tax rate of 12.5%, one of the lowest in the EU.
• IP BOX: Effective tax rate as low as 2.5% for companies in the IP sector.
• 50% exemption from income tax for new residents earning over €55,000 for up to 17 years, as well as tax incentives for employees earning more than €100,000.
• Exemption from dividend tax and capital gains tax, which allows for effective income structuring.
• Non-domicile status: 50% income tax exemption for qualified non-resident employees.
• Access to the internal EU market as a member of the European Union.
• Opportunity to obtain residency through investment in the Cypriot business.

 

Drawbacks:

 

• Administrative complexity — many processes remain non-digitised, leading to delays in registration and ongoing support.
• Substance requirements — to receive tax incentives, physical presence of the company is required, which increases costs.
• Decreased investment attractiveness — some European and American investors are reluctant to work with companies registered in Cyprus, which also limits the prospects for an IPO.

 

Delaware (USA)

  Delaware (USA) is one of the most popular options for registering companies in the United States, particularly among startups, investors, and technology enterprises. It is chosen due to its simple, convenient, and quick registration process, a well-developed legal infrastructure, a favorable tax climate, and a high level of corporate rights protection.  

Company registration in Delaware is possible even remotely, thanks to numerous online services that automate the process and provide effective support to entrepreneurs at all stages.

 

Additionally, it is important to consider that if a company registered in Delaware conducts operational activities in other states of the USA, it is subject to the regulatory requirements of each of them, including local taxation, reporting obligations, and obtaining the necessary licenses.

 

Legal System and Regulation Delaware boasts one of the most developed and predictable legal systems for business in the United States. The state specialises in corporate law, and its courts, particularly the Court of Chancery, have extensive experience in resolving corporate disputes. This creates a favorable environment for protecting the rights of founders, investors, and shareholders, increasing the trust in companies registered in this jurisdiction.

 

In addition to standard corporate taxation, Delaware imposes a Gross Receipts Tax, which is levied depending on the type of business activity. Although the state does not have a sales tax, this is offset by other taxes, such as the franchise tax, which is paid by all companies registered in Delaware, regardless of whether they operate in the state.

 

It is important to note that the USA allows for the selection of the form of business organisation, which affects the tax system. For example, LLCs (Limited Liability Companies) and S-Corporations are taxed on a pass-through basis, meaning the tax is paid by the owners rather than the company itself. On the other hand, for companies that attract venture capital or plan a public offering, the most optimal option is the C-Corporation structure.

 

Registering a company in the USA does not exempt Ukrainian residents from complying with Ukrainian tax legislation. In particular, if a controlled foreign company (CFC) exists, the resident is required to submit the corresponding reports to the tax authorities.

 

Key Advantages of Delaware as a Business Jurisdiction:

 

• Simple and Fast Registration — Company registration is fully online, without the need for the founder to be physically present.
• Favorable Legal Environment — High level of investor protection and clear corporate governance rules.
• Access to Investment — The jurisdiction is popular among investors, accelerators, and venture capital funds.
• Financial Tools – Possibility to open accounts with neobanks and fintech services, although Ukrainian residents should verify current client requirements.
• Exit Strategy Efficiency — Favorable conditions for companies planning an IPO or business sale.

 

Possible Drawbacks and Risks:

 

• Difficulty in Opening Bank Accounts. For non-residents, opening an account with traditional US banks can be complicated, often mitigated by using fintech solutions.
• Regulatory Burden in Other States. Operations outside of Delaware require registration in the relevant states and compliance with their regulations.
• Tax Burden in Ukraine. The obligation to report CFCs and the potential need to pay taxes in Ukraine can complicate tax planning.

 

Thus, Delaware remains one of the leading states in the USA for company registration, especially in the fields of technology, innovation, and venture business. The combination of favorable corporate legislation, transparent tax systems, and its reputation as an investment hub makes it an ideal choice for entrepreneurs looking to scale their business internationally.

 

Estonia

  Estonia stands out with its innovative tax system, making the country particularly attractive for technology companies and startups. One of the key advantages of this jurisdiction is the ability to defer tax obligations until the actual distribution of profits. This allows companies to reinvest their earnings without facing immediate tax liabilities, providing significant flexibility and fostering business growth.  

The base corporate tax rate is 20%, but it only applies when profits are paid out, for example, in the form of dividends. If the funds remain in the company or are reinvested, no taxation is applied. This allows businesses to focus on growth without additional tax pressure. 

 

For regular dividend payments, a reduced rate of 14% is applied to amounts that do not exceed the average level of dividends over the past three years. However, in this case, a 7% withholding tax is also imposed on individuals.

 

It is expected that from 2025, the general corporate tax rate will rise to 22%, however, due to the unique features of Estonia’s taxation model, the system remains one of the most flexible in the European Union.

 

Permanent establishments of foreign legal entities in Estonia are subject to the same rules: the profit tax is applied only in the case of its distribution. Capital gains from asset sales are taxed similarly to distributed profits.

 

Dividends paid to other companies are exempt from additional taxation, as the tax is already accounted for in the distribution. For individuals, in the case of applying the 14% rate, an additional 7% withholding tax is imposed.

 

The standard VAT rate was increased to 22% in 2024. It applies to most goods and services, although reduced rates apply to certain categories. Estonia also has an extensive network of double taxation avoidance agreements, which helps minimise tax liabilities on foreign income.

 

Advantages:

 

• Remote Business Registration. The e-Residency program allows you to set up a company entirely online. The process of obtaining residency status takes about 4–6 weeks.
• No Tax on Undistributed Profits. Profits that remain in circulation or are reinvested are not taxed, which is advantageous during the growth phase.
• EU Membership. Estonia provides direct access to the European market without additional barriers.
• Employee Incentive Programs. The jurisdiction offers effective mechanisms, including stock option programs, to attract and retain skilled personnel.
• Low Operational Costs. The cost of running a business in Estonia is significantly lower compared to many other EU countries.

 

Disadvantages:

 

• Difficulty Opening a Bank Account — many banks require proof of business presence in Estonia. However, there are options for opening accounts with European neobanks.
• Expected Increase in Tax Burden — the rise in corporate tax to 22% from 2025 may slightly reduce the tax advantages of the jurisdiction.

 

Poland

  Poland remains one of the most attractive countries for Ukrainian entrepreneurs due to its favorable geographical location, strong economic ties with Ukraine, membership in the European Union, and clear, accessible business regulations. The country boasts a well-developed infrastructure for supporting small and medium-sized businesses and offers several tax incentives for new enterprises.  

The base corporate tax rate is 19%. However, for new companies and small businesses with an annual income of up to €2 million, a preferential rate of 9% applies. This is particularly beneficial for startups that have not yet achieved high turnover and significantly reduces initial expenses.

 

The Value Added Tax (VAT) rate is 23%. Mandatory VAT registration is required if the annual sales volume exceeds PLN 200,000. The Polish VAT system is fully aligned with EU legislation, which simplifies cross-border trade.

 

The capital gains tax rate, as well as the dividend tax rate, is 19%. However, due to the implementation of EU directives concerning parent and subsidiary companies, there is an exemption from the dividend tax when certain criteria are met.

 

Advantages:

 

• Tax Benefits for New Companies. Companies meeting the small business criteria can benefit from a reduced corporate tax rate of 9%, effectively reducing the tax burden in the early stages of development.
• Simplified Business Registration. The process of setting up a company in Poland is relatively simple and fast, with most documentation available online. This significantly lowers the barriers to starting a business, especially for entrepreneurs working remotely.
• Full Access to the EU Market. As a European Union member, Poland provides duty-free access to the EU single market, opening up vast opportunities for exporting goods and services.
• Developed Banking Infrastructure. Polish banks offer a wide range of services for businesses, from multi-currency accounts to integration with accounting systems. This is an important support factor for companies engaged in international operations.

 

Disadvantages:

 

• Physical Presence Required for Opening Accounts. Most traditional banks in Poland require the company founder’s physical presence to open a corporate account. This can pose challenges for entrepreneurs planning to manage their business remotely.
• Increased Administrative Burden. As the company’s income grows, it automatically shifts to the standard CIT rate (19%), which not only increases tax liabilities but also requires compliance with more complex financial reporting standards, raising accounting support costs.

 

Overall, Poland is a balanced choice for Ukrainian entrepreneurs looking to enter the EU market with minimal startup costs and take advantage of tax benefits for small businesses. However, when planning operations, it is essential to consider local tax regulations and bank service requirements.

 

The United Kingdom

  The United Kingdom is traditionally considered one of the most authoritative and stable jurisdictions for doing business in Europe. It is chosen not only for its prestige but also for its strong legal system, flexible corporate legislation, well-developed financial sector infrastructure, and unrestricted access to international markets. For Ukrainian entrepreneurs, the UK is an attractive jurisdiction with transparent rules, a fast company registration process, and broad opportunities for innovative businesses, particularly in the FinTech, IT, and research sectors.  

Since 2024, the UK has implemented a progressive corporate tax scale. Companies with profits up to £50,000 pay a reduced rate of 19%. For companies with profits exceeding £250,000, the full rate of 25% applies. Companies with profits between £50,000 and £250,000 use a marginal tax system, which provides flexibility for medium-sized businesses.

 

Dividends are typically not taxed for companies, especially for intra-group or reinvested dividends. For individuals, the rate depends on income levels: the basic rate is 8.75%, the higher rate is 33.75%, and the additional rate is 39.35%.

 

Regarding capital gains, companies pay tax at the standard corporate tax rate (up to 25%), but in certain cases, full exemption is possible under the Substantial Shareholding Exemption regime, which applies to strategic investments in subsidiaries.

 

Among the most powerful tax tools in the UK is the Patent Box regime, which allows for a reduced effective corporate tax rate of 10% on income derived from patented developments. This is particularly attractive for companies holding technological intellectual property.

 

Additionally, there is a tax relief for R&D. Small and medium-sized companies can benefit from a tax deduction of up to 186% of their research and development expenses. Large companies can apply for a tax credit of 20% of actual expenses.

 

Non-residents are taxed only on income derived from UK sources, which allows the use of the UK jurisdiction for structuring international business. Furthermore, UK companies can be exempt from taxation on dividends, including those received from abroad, creating favorable conditions for holding structures.

 

Key Advantages:

 

• Fast Online Registration — Company formation can be completed entirely remotely, without the need for physical presence, and with a minimal set of documents.
• Reliable Legal System — English law is a benchmark in the international business environment, ensuring predictability and legal protection.
• Access to Global Markets — Businesses in the UK gain direct access to one of the world’s most powerful financial centers and international capital markets.
• Beneficiary Confidentiality — There are opportunities to structure a business with limited public disclosure of ownership information.
• Strong Tax Incentives for Innovation — The Patent Box and R&D Tax Relief regimes make the UK attractive to IT companies, startups, and research organisations.
• Favorable Holding Company Taxation — Dividends from subsidiary structures, including foreign subsidiaries, are often exempt from taxation.

 

Potential Drawbacks:

 

• Increased Tax Burden — The increase in the corporate tax rate to 25% may become burdensome for high-profit companies.
• Banking Barriers — Opening a corporate account in UK banks can be complicated without the physical presence of directors or shareholders.
• Additional Obligations when Dealing with the EU — After Brexit, companies planning to do business with the EU must comply with separate compliance and registration requirements both in the UK and in EU member countries, which may increase legal support and tax planning costs.

 

Singapore

  Singapore remains one of the most attractive jurisdictions for doing business in the Asia-Pacific region. Its success is based on a stable political system, modern infrastructure, liberal regulation of foreign trade, and a clear tax policy. The country actively promotes entrepreneurship, especially in high-tech, finance and digital innovations, offering strong tax incentives for both domestic and foreign companies. This makes Singapore a “bridge hub” for companies aiming to access Southeast Asian markets.  

Singapore’s tax system is based on a territorial tax principle, meaning that taxes are only paid on income generated within the country or foreign income that is brought into Singapore. This allows international companies to structure their income in a way that reduces their overall tax burden.

 

Singapore offers a wide range of tax incentives:

• Partial tax exemption for all companies: The first SGD 10,000 of income is taxed at only 25% (i.e., 75% of the income is exempt), and the next SGD 190,000 is taxed at 50%.
• Special exemption for newly established companies: In the first three years of operation, new companies can receive full exemption on the first SGD 100,000 of profit, with the next SGD 100,000 taxed at only 50%. This provides significant support to businesses in their early stages.

 

Additionally, the government offers strong incentives for companies involved in R&D. Tax deductions on research and development expenses can reach up to 250%, encouraging technological innovations and the creation of competitive products.

 

Investment taxation features: Singapore does not levy capital gains tax, making it an extremely attractive jurisdiction for holding structures, venture funds, and companies involved in M&A operations. Profits from the sale of securities, real estate, or other assets are exempt from taxation, provided the company does not engage in the regular trading of these assets.

 

Dividends, paid from profits that have already been taxed at the corporate level, are not taxed again, thanks to Singapore’s single-tier corporate taxation system. This eliminates double taxation and simplifies the distribution of profits among shareholders.

 

The standard Goods and Services Tax (GST) rate is 9%. However, certain categories, such as exports, international services, and specific financial products, may be subject to a zero rate, making Singapore competitive in terms of consumption costs.

 

Key Advantages:

 

• Tax Exemption for Startups — Generous tax incentives during the early years of a company’s operation encourage innovative projects.
• Government Support for R&D — Significant tax deductions for companies investing in research, innovation, and high technologies.
• Tax Treaties with Many Countries — Singapore has entered into numerous double taxation avoidance agreements, which help optimise the international business structure.
• High Reputation of the Jurisdiction — Singapore enjoys a positive international image, which facilitates the opening of bank accounts and attracting foreign investors.

 

Potential Drawbacks:

 

• Complex Requirements for Tax Exemptions — To benefit from tax exemptions, a company must meet certain criteria, including holding a controlling stake and maintaining a permanent presence in the market.
• Financial Reporting and Compliance — Singapore imposes strict transparency and regular tax reporting requirements, necessitating the use of professional accounting and legal services.
• High Cost of Business Services — While the tax system is favorable, the cost of legal support, licensing, and office expenses in Singapore is higher than in many other Asian jurisdictions.

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The United Arab Emirates (UAE)

  UAE has long established itself as one of the leading global business hubs, particularly for entrepreneurs seeking to benefit from the country’s flexible tax policies and international reputation. An additional incentive for foreign investors has been the UAE’s removal from the FATF’s list of high-risk countries, which has positively impacted financial transparency and improved business conditions. For Ukrainian entrepreneurs, this jurisdiction is attractive not only due to zero or low taxation but also because of its favorable business climate, the development of financial infrastructure, and the wide selection of specialised Free Economic Zones (FEZ) that allow for minimising tax obligations.  

The UAE’s tax system is characterised by flexibility and leniency. For the first time in 2023, the country introduced a corporate income tax of 9%, but it only applies to income exceeding the threshold of AED 375,000, meaning that small businesses and many startups can avoid tax obligations at the initial stage of their operations. The Value Added Tax (VAT) of 5% has been in effect since 2018 and is applied to most goods and services, but due to its low rate, it does not create a significant tax burden.

 

Regarding capital gains, these are taxed as ordinary company profits, but if the conditions for “Participation Exemption” are met — such as holding a controlling stake in a subsidiary — such income can be fully exempt from taxation. Additionally, dividends received from foreign companies or paid to UAE residents are also exempt from taxation under certain conditions.

 

Within Free Economic Zones, special tax regimes allow companies to be exempt from corporate taxes for up to 50 years (with the possibility of extension). This is particularly advantageous for holding structures, IT companies, trading firms, and businesses engaged in e-commerce.

 

Advantages of Doing Business in the UAE:

 

• Tax Incentives in Free Economic Zones (FEZs): Companies registered in specialised zones can benefit from full exemption from corporate tax, allowing them to direct all profits towards business development.
• Low Overall Tax Burden: The 5% VAT rate and the absence of personal income tax create an extremely favorable environment for both entrepreneurs and employees.
• Simple Investor Visa Processing: Accessible programs for obtaining long-term visas (including the “Golden Visa”) for business owners allow them to legally reside in the country and manage their companies without restrictions.
• Infrastructure for International Business: A developed banking system, international airports, modern logistics, and a legal system based on English law make the UAE an ideal hub for managing global projects.
• No Currency Controls: Free capital movement allows easy repatriation of profits and investments in any markets.

 

Disadvantages and Limitations:

 

• High Administrative Costs — The annual cost of maintaining a company can reach several thousand US dollars, including mandatory license renewals, office expenses, and local agent services.
• Need for Physical Presence — To open a bank account or obtain an investor visa, physical presence in the UAE is required. This may pose challenges for entrepreneurs who wish to manage their business remotely.
• Limited Access to the Mainland Market — Companies registered in FEZs cannot directly offer services on the mainland of the UAE without an additional license or involvement of a local partner, which can complicate the development of local businesses.

 

The UAE remains one of the most attractive options for setting up an international business structure due to its favorable tax regime, high service levels, and openness to foreign investment. However, before registering a company, it is important to consider not only the advantages but also the administrative costs and the need for personal involvement in certain procedures.

 

Juscutum’s Advice — when making a decision about choosing a country for company registration and business operations, approach it comprehensively and consider a range of factors — from tax conditions to reputational risks and administrative costs.

 

The advice provided in this material is general in nature, as every business has its own unique structure, goals, geographic scope, and development plan. Before making a final choice, it is essential to clearly define your strategic priorities: whether investment attraction is planned, whether the business will focus on the local or global market, and whether physical presence in another country is required or if the company will operate completely remotely.

 

Given the complexity of international tax and corporate regulations, you can always turn to Juscutum (partners of the IT Ukraine Association and the e-Support service) for professional advice.