Which country is best for my business? Well, there is no simple answer.

Choose a structure that works — with banks, tax authorities, and payment processors

In 2025–2026, tax optimisation is no longer about finding the lowest tax rate.

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It’s about building a structure that is:

• legally defensible

• accepted by banks and fintech providers

• compatible with Stripe, PayPal, and global payments

• aligned with substance and decision-making

• sustainable under audits and reporting rules

At Northbridge, we help international founders choose jurisdictions and structures that actually work in practice, not just on paper.

Jurisdictions covered:

Serbia · Bosnia & Herzegovina · Montenegro · Hungary · Bulgaria · Gibraltar · United Kingdom · United States · Canada · Hong Kong · UAE (Dubai) · selected offshore jurisdictions

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Book a free consultation and get a clear, compliant roadmap — before you incorporate.

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What tax optimisation really means in 2025–2026

In today’s environment, tax optimisation is not a single number and it is not achieved by simply choosing a “low-tax country”.

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Your effective tax outcome is determined by the interaction of several layers:

1. Where value is created

Tax authorities increasingly look at:

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• where key decisions are made

• where management is located

• where people actually work

If value creation and profits are misaligned, structures are challenged — regardless of headline tax rates.

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2. Substance and economic presence

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Substance is no longer optional.

Depending on the jurisdiction and activity, this may include:

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• directors or managers located locally

• employees or contractors

• office or flexi-desk arrangements

• documented decision-making processes

Lack of substance is now one of the main reasons for audits and banking refusals.

3. Banking and payment flows

In practice, many structures fail before tax even becomes relevant.

Banks and payment providers focus on:

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• transparency of ownership

• source of funds

• operational reality

• jurisdiction risk profile

If your company cannot:

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• open a reliable bank account, or

• access Stripe, PayPal, or card acquiring

then the tax rate is irrelevant.

4. Corporate tax is only one layer

Corporate income tax is just the first step.

A compliant structure must also address:

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• dividend withholding taxes

• tax treaties or EU directives

• taxation at the shareholder level

• reporting and disclosure obligations

Optimisation is about managing the full tax chain, not eliminating one link.

5. Enforcement has changed

Between 2023 and 2025:

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• automatic exchange of information expanded

• banks tightened onboarding rules

• payment processors reduced tolerance for “letterbox companies”

By 2026, this trend will continue.

Structures that rely on ambiguity or outdated practices are increasingly unsustainable.

The takeaway

In 2025–2026, good tax planning means:

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• choosing the right jurisdiction for your specific business model

• aligning tax, banking, and substance from day one

• designing a structure that works both legally and operationally

This is exactly where professional planning makes the difference.

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How to choose a jurisdiction (before looking at tax rates)

Choosing a jurisdiction starts with questions, not numbers.

Before comparing tax rates, a compliant structure must answer the following:

1. What exactly does the company do?

Different activities are treated very differently across jurisdictions.

Key distinctions:

• services vs. trading vs. IP

• active operations vs. passive holding

• B2B vs. B2C

• digital vs. physical presence

A jurisdiction suitable for a holding company may be completely unsuitable for an operating business.

2. Where are the founders and decision-makers located?

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Tax authorities focus heavily on:

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• management and control

• board and director location

• day-to-day decision-making

If strategic decisions are consistently made outside the chosen jurisdiction, tax residence and permanent establishment risks arise.

3. Is access to banking and payments critical?

For many businesses, this is the primary constraint.

Ask upfront:

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• Do you need Stripe or PayPal?

• Do you need multi-currency accounts?

• Will clients pay by bank transfer, cards, subscriptions, or marketplaces?

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Some jurisdictions are excellent on paper, but impractical for payment processing.

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4. How much substance is realistic?

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Substance must match reality.

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This may include:

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• local directors or employees

• office or flexi-desk

• payroll and social security

• local operational costs

Over-engineering substance is expensive.
Under-engineering it creates risk.

5. What is the growth trajectory?

A structure that works at €100k revenue may fail at €1m.

Consider:

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• VAT / sales tax thresholds

• audit requirements

• reporting obligations

• investor expectations

Good planning avoids forced restructures later.

6. How will profits eventually be extracted?

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Optimisation must consider:

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• dividends

• management fees

• reinvestment

• exit scenarios

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The optimal jurisdiction for earning profits is not always optimal for distributing them.

The result of this process

Once these questions are answered, the list of viable jurisdictions usually narrows to two or three realistic options.

Only then does it make sense to compare:

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• statutory tax rates

• treaty networks

• compliance costs

This approach avoids the most common (and expensive) mistakes.

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Statutory tax overview

What the law actually says (before treaties or structuring)

This section shows statutory tax rates as written in local law.

These figures do not assume:

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• tax treaty relief

• EU directives

• offshore exemptions

• relocation or compensation planning

They represent the starting point, not the final outcome.

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Corporate income tax & dividend withholding (statutory)

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* Applies only to qualifying foreign income and is subject to substance, reporting, and bankability constraints.

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Important clarifications

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• Dividend withholding tax is applied by the company paying the dividend, not the recipient.

• Double Tax Treaties (DTTs) may reduce withholding tax, but only if:

  • eligibility conditions are met

  • beneficial ownership is proven

  • substance requirements are satisfied

• Personal taxation of dividends depends on the shareholder’s tax residency, not the company’s location.

Why we show statutory rates first

Many online comparisons skip this step and jump directly to:

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• “effective tax”

• “0% structures”

• “best jurisdiction rankings”

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This often leads to:

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• unrealistic expectations

• bank onboarding failures

• audit and compliance issues later

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By starting with statutory law, we ensure that:

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• every optimisation step is explainable

• treaty benefits are defensible

• structures remain sustainable long-term

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Special cases worth understanding

Brčko District & pass-through jurisdictions (USA / Canada)

Some jurisdictions do not fit neatly into classic “corporate tax + dividend” logic.
Below are important special cases, often misunderstood online.

Brčko District (a "special subjurisdiction" inside Bosnia & Herzegovina)

What the law provides

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• Corporate income tax: 10%

• Dividend withholding tax: 0%

This means that:

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• dividends distributed by a Brčko entity are not subject to withholding tax at source

What this does not mean

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• dividends are not automatically tax-free overall

• taxation may still apply at the shareholder level, depending on:

  • tax residency of the recipient

  • applicable domestic rules

  • substance and management considerations

Brčko District applies a 0% withholding tax on dividend distributions. Taxation at the shareholder level depends on the recipient’s tax residency and applicable rules.

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United States – pass-through taxation

The U.S. tax system includes both:

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• corporate entities, and

• pass-through entities

Pass-through entities include

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• LLCs (by default)

• Partnerships

• Certain S-Corporations (with restrictions)

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In these structures:

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• profits are not taxed at the company level

• income “passes through” to the owners

• taxation occurs at the owner level, based on their status

Important limitations

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• not all U.S. entities are pass-through

• C-Corporations are fully taxable entities

• withholding and reporting obligations may still apply to foreign owners

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In the U.S., certain entities such as LLCs and partnerships are treated as pass-through for tax purposes, meaning profits are taxed at the owner level rather than the company level.

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Canada – limited pass-through use

Canada also allows pass-through treatment, but in a more limited scope.

Pass-through forms

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• Partnerships

• Sole proprietorships

Non pass-through

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• Corporations (the most common structure for foreign founders)

For foreign-owned structures:

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• corporate taxation is usually unavoidable

• withholding and reporting rules are often more complex than in the U.S.

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In Canada, partnerships may be treated as pass-through entities, while corporations are generally taxed at the corporate level.

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Why this matters for planning

Pass-through and zero-withholding regimes:

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• can be powerful in the right context

• are often misused in the wrong one

They require careful consideration of:

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• ownership structure

• residency of owners

• reporting obligations

• banking acceptance

This is why they are assessed case by case, not sold as universal solutions.

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Banking & payment processing – detailed comparison

What works in practice (2025–2026)

 

This table reflects practical market experience, not theoretical eligibility.
Availability depends on ownership, activity, substance, and risk profile.

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​How to read this table (important)

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• “Traditional bank required”
  Means that in practice, local banks are often needed for:

  • taxes

  • payroll

  • regulatory payments

• Fintech / EMI access
  Refers to providers such as:

  • Wise

  • Revolut Business

  • Airwallex

  • Mercury / Relay (US)

• Stripe / PayPal
  Indicates realistic availability, not theoretical eligibility.

Common fintech & EMI providers by region (indicative)

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• EU / UK: Revolut Business, Wise Business, Airwallex

• USA: Mercury, Relay, Brex, Wise

• Hong Kong: Airwallex, Statrys, Wise

• UAE: Wio Business, Mashreq NeoBiz, Airwallex

 

Final acceptance always depends on KYC, ownership, activity, and substance.

Why this table matters more than tax rates

In real life:

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• a 9% tax rate with no Stripe is often worse than

• a 15–25% tax rate with full banking and payments

Most failed structures fail because:

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• banks refuse onboarding

• payment processors freeze accounts

• activity does not match jurisdiction profile

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Key takeaway

Before choosing a jurisdiction, always ask:

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“Can this company reliably bank, get paid, and scale?” If the answer is unclear, tax optimisation is premature.

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