As every single result is based on background and experience which created it, then before beginning to describe most popular and effective jurisdictions for business startup in Asia it can be useful to have a brief look at already established startup companies in this geographical area.
Asia has a leading role in tech investment growth, bucking gloomy numbers for other parts of the globe with economic powerhouses located in China and India. Most popular business fields or business trends in this region today are: ecommerce, marketplaces, financial technologies, transportation, bio technologies, data processing technologies, Internet infrastructure and enterprise business solution field. These sectors captured about 30% of VC investments few years ago.
Asian market leaders Each of these fields has its leader in terms of companies’ performance and funding. For example, the ecommerce site Lazada has been evaluated 1.3 billion US dollars with total funding of 686 million US dollars. Ride-hailing taxi application Grab has received funding of 680 million US dollars. There are more of Asian startups which have really great potential: Zalora (ecommerce field, fashion industry); PropertyGuru (real estate business); Elevenia (ecommerce field, marketplaces and platforms); M-DAQ (fintech field); Tokopedia (ecommerce field, consumer-to-consumer marketplace); Qoo10 (ecommerce field, business-to-consumer marketplace); Capillary technologies (cloud-based customer engagement platform for retailers); Aslan Pharmaceuticals (biotech company); IcarsClub (peer-to-peer car rental platform) and other companies. Most of these startups are founded in South-East Asia in such countries as Singapore, Malaysia, India, China, UAE and Indonesia. These can be considered as top 6 jurisdictions for business startup in Asia.
Singapore This country has one of the best startup ecosystems in the Asia Pacifics. About three and a half startups are operating there today. It is a well-known business center where headquarters of Uber, Facebook and Google are located. Therefore, the main areas of development include ecommerce, social media and gaming. It is a perfect place for ecommerce development as 9/10 of its citizens has access to a smartphone. Merely half of potential Singapore’s startup customers are living abroad.
Indonesia This jurisdiction is rather collaborative when comparing it to other countries. There is also a huge investor flow in the country that is entering the market. For example, Jakarta collects investors all over the world who focus on ecommerce, travel and lifestyle.
Malaysia The country has special programs for startups since 2013 which support them and help entrepreneurs by equipping them with skills, network and the necessary knowledge. These programs are the largest startup accelerators in this region. It is also perfectly suited for foreign talents development and promotion. Therefore, Malaysia has a really supportive government. By the way, living costs in Malaysia are much cheaper than in Singapore. One more advantage is that the country has a good test market which is a little bit larger than Singapore market.
China Beijing is one of the best startup cities in Asia together with Hong Kong which has been seeing growth in startups worldwide across various industries such as fintech, hardware and in e-commerce. The second has about 2 thousand small and large scale startups. China also has a tax relief program for startups. The annual tax deductions are around 1,500 million dollars US. They are usually given to businesses established by previously unemployed workers and recent college graduates. At the moment the country runs about 1,500 incubators created by the Ministry of Science and Technology. It is done within the framework of 27-year-old Torch Programme, providing policy, as well as consulting and finance services for high technology companies.
India India has about 5 thousand operating startups established in cities like Bangalore, Delhi, Mumbai and others. New projects are being actively funded, consolidated, growing financially and evolving in technical sense. India is making a revolution in this business field which is basically changing how the markets are operating today. There are some estimates the Internet and Mobile Association of India showing that in 2017 India has 500 million global net users. This place also has lots of high quality talents, higher number of investors ready to invest in potentially successful projects, rather cheap real estate prices, support of experienced professionals and a supportive government.
Membership in International Unions Whether it is an alliance, incorporated union, federal union or supranational body here is the list of unions the country is a member of. Turkey is a member of several unions. They are International Monetary Fund, North Atlantic Treaty Organization, Organisation for Economic Co-operation and Development, United Nations, World Bank, World Trade Organization.
International Monetary Fund Turkey is a member of International Monetary Fund. On 11 March 1947, it joined the IMF as a member. The IMF is an organization headquartered in Washington, D.C., of 189 countries working to foster global monetary cooperation, secure financial stability and facilitate international trade. The IMF now plays a central role in the management of balance of payments difficulties and international financial crises. The union is governed by and accountable to the all 189 member countries. As of 2010, the fund had SDR 476.8 billion (about US$ 755.7 billion).
North Atlantic Treaty Organization Turkey is a member of North Atlantic Treaty Organization. Turkey has been a part of NATO since 18 February 1952, and therefore has been a member of NATO for 71 years. The North Atlantic Treaty Organization (French: Organisation du Traité de l'Atlantique Nord; OTAN) is an intergovernmental military alliance based on the North Atlantic Treaty which. NATO's headquarters are located in Haren, Brussels, Belgium. NATO promotes democratic values and encourages cooperation on defence and security issues. The organization constitutes a system of collective defence whereby its member states agree to mutual defense in response to an attack by any external party. NATO is committed to the peaceful resolution of disputes.
Organisation for Economic Co-operation and Development Turkey is a member of Organisation for Economic Co-operation and Development. On 2 August 1961, it joined the OECD as a member. The Organisation for Economic Co-operation and Development (French: Organisation de coopération et de développement économiques, OCDE) is an international economic organisation of 34 countries, founded in 1961 to stimulate economic progress and world trade, and promote policies that will improve the economic and social well-being. It is a forum in which governments can work together to share experiences and seek solutions to common problems. OECD work with governments to understand what drives economic, social and environmental change. OECD measures productivity and global flows of trade and investment.
United Nations Turkey is a member of United Nations. On 24 October 1945, it joined the UN at its inception date as a full member state. Founded in 1945, the United Nations is an intergovernmental organization to promote international co-operation. The work of the United Nations are guided by the principles contained in its founding Charter. It is currently made up of 193 Member States. The headquarters of the United Nations is in Manhattan, New York City, further main offices are situated in Geneva, Nairobi and Vienna. Its objectives include maintaining international peace and security, promoting human rights, fostering social and economic development, protecting the environment, and providing aid.
World Bank Turkey is a member of World Bank. On 11 March 1947, it became a member of the World Bank Group. The World Bank is international financial institution that provides loans to developing countries. It's like a cooperative, made up of 189 member countries. These member countries are represented by a ministers of finance who are the ultimate policymakers at the World Bank. The World Bank's official goal is the reduction of poverty.
World Trade Organization Turkey is a member of World Trade Organization. On 26 March 1995, it joined the WTO as a member. The World Trade Organization is an intergovernmental organization which regulates international trade. At its core are the WTO agreements ratified in national parliaments. It is the only global international organization dealing with the rules of trade between nations. The goal is to help producers of goods and services, exporters, and importers conduct their business. The WTO deals with regulation of trade between participating countries by providing a framework for negotiating trade agreements and a dispute resolution process aimed at enforcing participants' adherence.
Considered one of the most open and outward-facing economies in the world, Hong Kong is probably the best place to do business. First, it has a great location in the geographical center of Asia, which provides quick and easy access to the region's major markets. Located on the south-east coast of China, Hong Kong is the world's largest single market, not least because its economy is built on free trade, free enterprise and the free market that is open to all: there are no restrictions on foreign or foreign investment and no trade barriers like Quotas, tariffs or exceptions. In addition, there are no restrictions on the nationality of any sector or company, no exchange controls, and a simple tax system in this jurisdiction. Hong Kong also has the lowest corporate tax rate (currently 16.5%) of any major Asian economy.
Taxation and the tax system in Hong Kong
Hong Kong is often referred to as a tax haven because tax rates are very low – dividends, offshore income, and capital gains are not taxed at all. Hong Kong applies the territorial source principle when collecting taxes. This means that income is generally only taxed if it comes from doing business or trading within Hong Kong. Nonetheless, there are a small number of sources of income to which the territorial source principle does not apply, and that income is taxed at the source (e.g. royalties received by non-residents for the use of literary property or copyrighted material).
Hong Kong has a scheduler income tax system, which means that different types of income are taxed separately. Taxes on corporations are: corporate income tax (tax on income from business, professional services or commerce in Hong Kong), wage tax (tax on income from employment, office or pension), and wealth tax (tax on income earned on Hong Kong real estate).
For corporate income tax, the rate is 15% for unincorporated companies and 16.5% for corporations (the lowest in the region, compared to 17% in Singapore and 25% in mainland China). Investment income is not subject to taxation. Dividends from local companies are subject to taxation, but dividends from foreign companies are not, as they are offshore in nature. The tax residence is not important for the calculation of the profit tax, but only for agreements or agreements on double taxation.
The wage tax is levied progressively on a scale between 2% and 17% or at the standard rate of 15%. Salary tax includes salaries, bonuses, commissions, pensions, vacation pay, fees, allowances, etc. There is a 60-day income exemption, which means that anyone who visits Hong Kong for less than 60 days per calendar year is exempt from payroll tax. In some cases, however, depending on the employment relationship, a tax return is required. Hong Kong property tax is currently 15% payable by the owner of the building or land.
Advantages of choosing Hong Kong
There are many benefits to starting a business in Hong Kong. First of all, company registration is easy and inexpensive. Your biggest expense will be the flight to open your bank account, although in some cases it can be done remotely. Hong Kong has an excellent, world-renowned banking system and an excellent communication infrastructure. There is no minimum share capital requirement and only one shareholder and one director is required to set up a limited liability company. In addition, there are no restrictions on foreign directors or shareholders with Hong Kong based companies. The main business language is English – one of the official languages in Hong Kong. All communications, information and documents can be created in English.
As you can see, Hong Kong is a great place for your business for many reasons. It is an international economic center with a reliable and stable legal system, a cosmopolitan spirit and strong and established institutions. With its pro-business government, Hong Kong has been voted the most liberal economy in the world for 20 years in a row. It is probably the ideal choice whether you are starting or continuing your business adventure.
Due diligence is an investigation of a company, usually performed before entering into an agreement or starting a new business relationship. Due diligence includes reviewing the company's reputation, evaluating projected earnings and cash flows, evaluating the quality of assets, identifying business risks, highlighting unexpected issues that could affect the execution of the agreement, identifying hidden ones costs, obligations and contingencies, reviewing and estimating potential tax charges and other reviews on a case-by-case basis. Due diligence helps to assess whether you can trust your business partner by checking the reliability of new or current business partners with the result that offers a higher level of certainty.
Purpose of due diligence The overarching goal of the due diligence process is to screen the business partner and draw attention to any potential issues or risks. There are different types of due diligence, and the checks depend on each transaction.
Property check A property check should be carried out before purchasing a property. It involves an intensive study of the public register, namely whether the property is correctly registered, whether the owner actually has the right to sell the property or whether the property is connected to other properties. In addition, this includes the identification of encumbrances and ongoing proceedings related to the property. If the property is rented or other third-party rights, encumbrances and other registered restrictions, insolvency proceedings or tax debts are registered, the asset test must be carried out. Due diligence also includes reviewing the proposed purchase agreement and identifying risks that could affect the conclusion of the agreement, e.g. B. if the property is rented out, the rental agreement must be taken into account.
Reliability check In case of entering into a business agreement between two companies, the due diligence process with a view to a possible cooperation would include the following topics: Company records in the business register, confirming the company name, legal address, officials and shareholders, the value added tax register (VAT registration) , verification of status as a VAT payer. The financial stability of the company can be checked with the insolvency register to determine if the company has had or has ever had financial problems such as E.g. bankruptcy, temporary cessation of business activities, tax debts.
Mergers and acquisitions In the event of a corporate acquisition, before entering into a share purchase agreement, it would be important to assess the financial condition of the target company by evaluating factors such as: earnings and cash flow quality, analysis of the quality of assets and liabilities. It is important to assess the quantity and quality of staff, identify property and investigate whether there are no pending issues or proceedings related to company property; Inspection of public registers when no commercial pledges, encumbrances and legal proceedings are ongoing and could affect the company's assets in the future.
As more jurisdictions open up to foreign trade, companies can gain access to a large pool of resources abroad. They can establish relationships with foreign partners and relocate their production to foreign locations or simply export their products to new markets. IT and software development companies are also trying to capitalize on moving production to foreign jurisdictions.
In general, the main advantages to offshore software development is lower cost compared to home country. For example, the cost of developing the exact same software in India is 50% lower than in the US. The savings generally come from lower labor costs, but offshoring IT and software production offshore can also expand the company's access to a broader pool of workers with higher skills and expertise. This could explain why 50% of America's Fortune 500 companies use offshore IT and software development. Let's look at some of the jurisdictions where opening a software development company might be more beneficial compared to others and discuss the reasons why.
India India has long been one of the preferred software development outsourcing destinations for leading multinational companies around the world. This means that one of the biggest advantages of choosing India for your IT and software development business would be multinational demand for outsourced software development services. Meanwhile, the company would benefit from relatively lower labor costs, a broad pool of skilled workers, and a business-friendly environment with the government encouraging start-ups and small businesses. Furthermore, the IT industry is expected to grow in the early to mid teens in the coming years due to favorable political and economic initiatives by the Indian government.
United Kingdom London was recently described as the city with the most opportunities for business and took first place in terms of technology readiness. While low labor costs are not among the benefits of starting a software development business in London, there are several other benefits that could offset relatively higher wages. Numerous hubs and incubators offer young start-ups and small companies an environment with all the necessary functions and support for less than 300 euros a month. The government is also committed to supporting the software development and technology sectors with organizations such as Tech City UK and Innovate UK with the aim of accelerating the growth of IT companies. Various tax benefits are now available to IT and software development companies in London. Other benefits to consider include a skilled workforce and high-speed Internet access.
Poland Eastern Europe is becoming more and more attractive for IT and software development companies, with Poland ranking as the number one Eastern European country. While Poland may not offer as low labor costs as India, it can offer other advantages such as proximity to Western Europe and the ability to find common working hours with the rest of the world. Poland also shares a cultural affinity with the western world as well as other eastern countries. It is also believed to offer better product quality and business environment compared to lower cost targets for software development companies.
Each continent has additional jurisdictions to consider for registering an IT company - each with their own benefits and characteristics:
America: Brazil, Argentina and Chile; Asia/Pacific: China; Europe: Romania, Belarus and Ukraine. The above countries have large enough populations to have a broad labor pool and good education systems to produce skilled software developers. The business risks in these countries are manageable and the costs are reasonable compared to the USA, Canada and Western Europe.
It is important to remember that while a particular jurisdiction may be considered the best place to start an IT business for one entrepreneur, it may not be suitable for another. Consider the necessities your business is most interested in. This can be language, geographic location, regulation of specific activities, skilled labor, or cost.
A cryptocurrency is a digital asset designed as a medium of exchange. It uses cryptography to secure transactions and control the creation of additional currency units. Cryptocurrencies are digital currencies, a subset of alternative currencies. The most popular cryptocurrency is bitcoin, and since their invention, the various new cryptocurrencies that have been created are often referred to as altcoins, short for bitcoin alternative.
Bitcoin has successfully positioned itself as another business opportunity for forex and other traders. As mentioned earlier, buying and selling bitcoins is a simple, fast, and inexpensive process. Before setting up your bitcoin account, you should familiarize yourself with the status of bitcoin in your country and any other applicable laws and requirements. The legal status of Bitcoin varies widely from country to country and in many cases is still undefined or in flux.
Some countries that have managed to come to terms with bitcoin have gone a step further and introduced bitcoin ATMs: Internet ATMs that resemble regular ATMs and allow people to exchange bitcoins and cash. Bitcoins can be bought or exchanged back into cash at these machines. You can even set up your own bitcoin ATM if local regulations allow it.
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18.03.2024 14:38