Information technology commerce is among the most rapidly burgeoning sectors in the modern world, requiring constant improvement and adaptation to changing market conditions. Digitalization has become an integral part of modern businesses. And this is where IT companies come to the rescue. Choosing the best jurisdiction for an IT business is a key factor in a company's success.

Jurisdiction determines such factors as:

  • Tax burden. This factor can have a huge impact on a company's profitability, as the registration and relocation of a company to low-tax jurisdictions can reduce costs, increase the company's reserves, and make the business more competitive.
  • Legal regulation of business. Different countries have different laws and regulations governing business activities. This may affect aspects such as company structure (different jurisdictions have different forms of legal entities), rights and obligations of founders/shareholders and directors, and disclosure of information.
  • The cost of registering and doing business. The cost of registering and running a business may vary from jurisdiction to jurisdiction. This may include costs such as registration fees, tax payments, accounting and reporting costs.
  • Extent of investor protection. It is important that the jurisdiction provides strong legal protection for IT companies, including protection of intellectual property rights.
  • Business environment. Jurisdictions differ in terms of IT infrastructure development, offer different opportunities to enter large markets and have limited highly qualified staff in developing countries.

In this article we will talk about how to start a successful IT business and what legal formalities should be fulfilled in the process of IT business relocation.

What is the reason for the increased interest in the IT sphere?

IT technologies are becoming an integral part of our life and business. Whereas previously IT business included only companies developing software, SaaS services and IT systems, today the situation has changed considerably. A large number of companies, regardless of their main line of business, are now associated with IT business.

Modern technologies penetrate all spheres of business. For example, traditional industries such as financial services, healthcare, manufacturing and retail are increasingly using IT technologies to make their business processes more efficient and competitive. Therefore, today's IT business is a large collection of businesses that integrate and utilize "Information Technology" (IT) to improve business processes and achieve their goals.

Thus, the need for IT business can be due to a number of reasons:

  1. Technology development.
  2. A shift from conventional methodologies of toiling to digital platforms and processes.
  3. IT experts are in demand to build and maintain databases, process big data, analyze data and develop tools for data-driven decision making.
  4. Need for IT experts who can develop and implement cybersecurity measures, protecting against hackers and fraudsters.
  5. The need to develop applications and software that can run on different platforms and ensure secure user interaction on the global network.

Which country to choose for opening an IT company abroad?

Choosing a jurisdiction for an IT company is an important strategic decision that has a significant impact on its success. The following key factors should be considered when selecting a location:

  • Location. The location of the jurisdiction should be convenient for doing business, have good transportation links, be located in a free enterprise zone, etc.
  • Regulatory environment. It is important to make sure that the country where the company will be registered has clear and understandable laws, there are no restrictive provisions in the IT sphere.
  • Cheapness of the jurisdiction. The cost of registering and maintaining a business from jurisdiction to jurisdiction can vary significantly. When choosing where to set up an IT company, these costs should be taken into account, which will allow for an efficient allocation of resources. In addition, the cost of living can have a significant impact on a firm's expenses, it is important to choose a location with affordable housing and other goods/services.
  • Level of IP asset protection. IT firms often own valuable IP assets such as software, patents, trademarks. It is important to make sure that the country in which you plan to incorporate or to which you plan to relocate the company has progressive IP laws that will provide strong protection.
  • Availability of competent professionals in the industry. IT companies need qualified employees who are creative and capable of out-of-the-box thinking, adapt faster to new technologies and business requirements, which reduces the cost of their training. Therefore, it is important to choose a location with not only a developed IT industry, but also a high-quality and high level of IT education. This can lead to increased productivity and innovation.
  • Tax legislation. Tax policy can have a significant impact on a company's profitability, so it is important to make sure that tax laws do not create excessive costs for the business.

In addition, when choosing a country for the registration of an IT company, it is necessary to take into account the specifics of the company's business. For example, for firms that work with clients from different countries, it is important to choose a location with a convenient time zone.

Ultimately, choosing a country for the relocation of an IT company is a labor-intensive process with many formalities. Therefore, the best solution is to engage specialized specialists who have many years of experience in international corporate law and will provide competent support in registering an IT business abroad.

Registration of IT companies abroad: stages and requirements

Successful opening of an IT business abroad directly depends on detailed elaboration of legal aspects.

  1. The first step is to develop an idea. It should be innovative to interest potential customers and investors.
  2. Once you have an idea, you need to develop a unique proposition. This is what distinguishes your product or service from competitors.
  3. To realize your project, you will need a team of experienced professionals (programmers, designers, marketers and other specialists needed to create and promote your product/service).
  4. Once the team is formed, you need to choose a name for your project. The name should be memorable and easy to pronounce.
  5. The next step is to choose the legal form. In the IT field, common forms of doing business are LLC, JSC or IE.
  6. Depending on the field of activity, you may need to obtain special certificates. For example, if you develop software, you may need to obtain a certificate of conformity.
  7. To conduct financial transactions, it is necessary to open a bank account for an IT company.
  8. Insurance should be taken out to protect your business. For example, you can insure your business against entrepreneurial risks or third party liability.

After registering an IT company abroad, it is necessary to start promoting the business, i.e. developing a marketing strategy and launching advertising campaigns. In addition to the above stages, it is important to take into account the following peculiarities when registering an IT company abroad:

  • Information Security. IT companies must pay special attention to information security to protect their data from unauthorized access.
  • Privacy. IT companies must respect the privacy of their customers' and employees' data.

These are only the general stages of registering an IT company. If all legal requirements are met, the registration of an IT company is a guarantee of protection of its interests and activities.

How to relocate an IT business?

IT business relocation is a complex and time-consuming process that requires careful planning and preparation. It includes the following steps:

  1. Preparation. At this stage you need to analyze the current state of your business, determine the goals and objectives of relocation, and develop a plan of action.
  2. Selecting a jurisdiction in accordance with your goals. This is one of the most important stages of relocation.
  3. Company registration. After selecting a jurisdiction, it is necessary to register the new company or branch in accordance with local laws. To do this, you need to submit the following documents to the relevant authority:
  4. Application for registration.
  5. Articles of Association.
  6. A document confirming the payment of the state duty.
  7. Documents certifying the identity of the founders and director of the firm.
  8. Formalization of documents. To conduct business in a new jurisdiction, it is necessary to formalize a number of documents, such as:
  9. Visas for employees.
  10. Work permits for employees.
  11. Documents confirming the legality of the company's activities.
  12. Documents confirming the ownership of the company's assets.
  13. Relocation of employees and assets. Once the documents have been executed, it is necessary to organize the relocation of employees and company assets to the new jurisdiction.
  14. Commencement of operations in the new jurisdiction. After the move, it is necessary to set up the company's operations in the new jurisdiction. This includes finding an office, hiring staff, concluding contracts with suppliers and clients, etc.

Relocating an IT business may incur considerable expenditures. However, with careful strategizing and groundwork, it can bring significant benefits to a firm. You can contact the experts at TK Deal for advice on where to register an IT company and to request legal support for IT projects.

Best jurisdictions for setting up IT companies

In the last few years, a large number of companies are looking for ways to relocate their IT business. Large corporations are moving to financially developed countries that adhere to high standards of governance, such as Singapore, the UK, and the USA. But at the same time, the cost of launching and maintaining companies in these jurisdictions is impressive. The answer to the question of where to open an IT company is ambiguous.

If we consider the countries of the European continent, novice investors look for budget options when thinking about relocation. Start-up entrepreneurs can launch an IT company from scratch in jurisdictions such as Armenia, Georgia and Madeira.

Armenia. Its location in the center of Eurasia makes Armenia a convenient place to conduct business deals with companies from different countries. In particular, investors from CIS countries are attracted to Armenia:

  • Proximity to the CIS market. The country is part of the Eurasian Economic Union, which gives access to markets in 18 countries.
  • Similarity of legislation. The regulatory framework of this country is largely similar to the legislation of other CIS countries, which simplifies the process of registration and doing business.
  • Convenient visa policy. For citizens of CIS countries there is a visa-free regime for short-term stay in Armenia.

For several years now, the country has been experiencing rapid growth in the IT industry. According to the Ministry of Economy of Armenia, in 2022, the volume of IT services exports from the country amounted to 1.2 bln USD. The government has taken a number of steps to improve the investment environment in order to attract international players to implement IT projects in Armenia:

  • Tax reduction for IT companies. The basic corporate tax rate is 18%. However, there are exemptions for young IT companies, which will be valid until the end of 2023 (more details below).
  • Provision of tax preferences for foreign IT specialists. In 2021, the government provided tax preferences for foreign IT specialists working in Armenia (exemption from personal income tax during the first 3 years of employment).
  • Creation of special IT parks. Several special IT parks have been created in the country, which provide favorable conditions when registering an IT business in Armenia. Incentives include exemption from rent, utility payments and other fees.
  • Support for IT education. The government provides grants and other forms of incentives for the development of IT education in the country. These measures are aimed at training qualified IT specialists.

In terms of incentives for start-up IT firms, the benefits are as follows:

  • Corporate tax - 0%.
  • Zero VAT rate.
  • Income tax - 10% on employee salaries.
  • Dividend tax - 5%.

In order to receive the benefits, a company needs to apply for certification to the Ministry of Digital Development, Communications and Innovation of the Republic of Armenia. The application must be submitted within 90 days after the company is registered in Armenia.

Georgia has been noted by many experts as one of the leading IT development centers in Europe. According to the National Statistical Office of Georgia, in 2022, the country will have more than 10,000 IT firms and more than 100,000 new IT vacancies.

Georgia attracts investors in Aichi for several reasons:

  • Favorable tax legislation. Registering an IT company in Georgia gives access to favorable taxation (more details below). It should be noted that the normal profit tax rate is 15%.
  • Qualified labor force. The country has a large pool of highly educated IT specialists who are willing to work for lower wages than in other European countries. According to the World Economic Forum, Georgia ranks 41st in the world in terms of the level of training of IT-specialists.
  • Geographical location. Georgia is located at the intersection of Europe and Asia, which makes it convenient for doing business with clients from these regions.

Regarding tax aspects, according to the Government Resolution No. 619 of 2022, IT companies in Georgia that meet certain requirements can obtain the status of "International IT Company". In order to do so, they must meet the following criteria:

  • Carry out IT activities, including software development, cloud computing services, etc.
  • Have a minimum of 5 employees.
  • Have no ownership/controlling interest in other businesses other than IT companies.
  • Generate at least 70% of its revenues from exports.

Applicants granted "International IT Company" status in Georgia are exempt from the following taxes or pay taxes at reduced rates:

  • Corporate tax - 5%.
  • Dividend tax - 0%
  • VAT exemption on import of software and equipment. Property tax (except for land plots) - 0%
  • Employee payroll tax - 5%.

Tax rates are reduced for residents of IT parks. When obtaining the Virtual IT Zone status in Georgia, profit tax and VAT are 0%, and the dividend withdrawal tax rate is 5%. These benefits are valid for 10 years from the date of registration of the company in Tbilisi Technopark.

To qualify for Virtual IT Zone status, a company must meet these requirements:

  • be involved in the development and provision of IT services;
  • have at least 5 employees;
  • invest at least 100,000 GEL (about 37,387 USD) in equipment and infrastructure.

The government has also launched various incentive programs for new IT startups in Georgia, providing them with funding, mentorship and other resources. The jurisdiction is building new IT centers, creating data centers and other facilities necessary for the IT industry to thrive.

Madeira. Portugal has an innovative and growing IT sector, which accounts for about 10% of the country's GDP. Registering an IT business in Madeira has every chance of long-term success. The island is located in the center of the Atlantic Ocean, which allows access to the markets of the European continent, America and Africa. The Portuguese government has worked hard to create a favorable investment environment for IT projects in Madeira.

In particular, a law was passed that regulates tax benefits for IT companies locating their offices on the island. Such firms pay corporate tax at a rate of 5% (as opposed to the basic rate of 21%) and can receive subsidies for staff training. The Portuguese government is working with local universities and colleges to ensure that qualified IT professionals are trained. These measures have led to the growth of the IT industry on the island.

Note also that the procedure of opening an account for an IT company in Madeira is not characterized by excessive complexity. The account can be opened in one of the Portuguese banks. In general, the procedure takes about 2 weeks. As for bank compliance, it is characterized by less strictness and bureaucracy than, for example, in Switzerland. As a result, opening an account for an IT company in Madeira is faster and easier than in other jurisdictions. This makes the island attractive for relocating IT companies looking to avoid unnecessary bureaucratic procedures.

When evaluating more expensive jurisdictions for relocating IT business in Europe, companies with sufficient financial resources and professional lawyers on staff may opt for Switzerland.

Switzerland. This country has been ranked No. 1 in the Global Innovation Index for 12 years in a row since 2011. In 2023, it received a score of 67.2 out of 100, ahead of the United States (66.0), Sweden (64.6) and the United Kingdom (64.4).

Setting up an IT company in Switzerland gives access to the large European consumer market. Switzerland is a member of the European Economic Area (EEA), so IT companies registered here can freely vend their commodities and amenities throughout Europe.

The country is one of the world's leading centers of IT innovation. The headquarters of major IT companies such as Logitech, SAP, Google Switzerland and IBM Switzerland are located here. Moreover, Switzerland is home to a large number of research centers and universities that are dedicated to the development of new technologies.

The government continues to invest in innovation to remain a leader in this field. In 2022, the government announced a new fund of CHF 10 billion to support research and development. But, if we evaluate the financial side of the issue, the registration of IT business in Switzerland may be "unaffordable" for many people. For example, the cost of living in Switzerland is relatively high.

Moreover, the cost of registering an IT company in Switzerland depends on the form of ownership. For joint stock companies (AG) the authorized capital is 100 thousand CHF (110 600 USD) and more, of which 50 thousand francs must be contributed at the time of registration. For a limited liability company (GmbH), the minimum capital is CHF 20,000 (USD 22,120), of which 10,000 francs must be paid at the time of registration. It is necessary to take into account the costs of opening a bank account for the IT-company, office rent, remuneration of employees, and marketing costs.

In general, the cost of relocating an IT business in Switzerland is quite high. From a tax point of view, the Swiss Confederation is also assessed as a country requiring large financial investments. The federal income tax rate is 8.5%. The cantonal rate varies from canton to canton and is appended to the federal rate, resulting in a total tax rate of between 11.9% and 21%. VAT is 7.7%.

If you have enough financial resources to hire professional lawyers who will competently communicate with all competent state authorities, representing the interests of your company, it is possible to register an IT company in Switzerland.

If the question is to choose a country for IT company relocation with reliable laws on information security protection and a reputation recognized by regulators of other countries, you can consider the UK or, alternatively, Malta and Ireland.

United Kingdom. In 2022, the country was ranked 4th in the Global Innovation Index. Registering an IT company in the UK will, with proper planning, bring your business to the international level.

The London Technology Center, also known as Tech City, is one of the ten largest in the world. It is located in East London's East End neighborhood and is home to more than 3,000 technology companies, including startups, mid-sized businesses, and tech giants such as Google, Facebook, Amazon, and Microsoft. Over 100,000 new IT jobs were created in the city in 2022. This reflects London's growing attractiveness for launching tech startups and attracting IT corporations.

An IT startup launching in the UK is attracting investors for a number of reasons:

  • Great Britain is one of the world's leading economies. It has a developed infrastructure, a reliable legal system, and a high quality of life.
  • Great Britain has a favorable investment climate. The country's government offers grants for IT companies.
  • Licenses issued in Britain are respected in the world for several reasons. First, Britain has a long history of regulating various activities, which has led to the development of an effective and fair licensing system. Second, the country has established strict licensing requirements that ensure a high level of safety and quality of products and services. Thirdly, the UK has an independent licensing oversight system that ensures that licenses are only issued to trustworthy organizations. As a result, UK licenses are highly trusted by consumers and businesses around the world.

However, for start-ups, starting a company under IT in the UK can be quite an expensive decision from a tax point of view. The basic rate of CIT for all businesses is 25%. The basic rate of VAT is 20%. But, IT businesses in the UK can get grants from the government, local authorities and private foundations.

To qualify for a grant, an IT company in England must meet certain criteria such as:

  • Availability of an innovative product or service.
  • Plans for business expansion or export.
  • Strong management team.
  • Financial stability.

There are many grant programs that are available for IT companies in the UK. Some of the most popular include:

  • Innovate UK grants are provided by the government to support high-tech research and development.
  • SMEs Go Global grants are provided by the government to support SMEs in expanding their export activities.
  • Digital Enterprise Capital Fund grants are provided by a private foundation to support SMEs in the information technology sector.

Ultimately, the decision to register an IT business in the UK should be made on a case-by-case basis.

Ireland. The government considers the IT industry to be one of the key drivers of the country's economic growth. In 2022, the jurisdiction's IT sector contributed 21% of the country's GDP and 40% of exports. As part of the strategy to attract investment in the IT industry, the government is implementing the following measures:

  • Creating a favorable tax climate for IT companies. Ireland has one of the lowest corporate tax rates in Europe (12.5%). Companies that locate their European headquarters in Ireland enjoy a number of tax incentives.
  • Improved infrastructure and availability of highly skilled labor. The government is actively investing in the infrastructure needed for the IT industry to thrive. The country has a policy of attracting and training a highly educated IT workforce.

These measures are already bearing fruit. Ireland is becoming increasingly attractive for IT startups - in 2022, the country attracted a record €22.5 million of investment in the IT sector.

Setting up an IT company in Ireland will open up access to the EU single market. That is, Irish firms can freely trade and offer services in any EU country. Ireland also has a number of free trade agreements with other nations including the US, Canada and Japan.

The English system of law used in Ireland is recognized as one of the most stable in the world. This makes Irish companies in all sectors more attractive to investors and partners from other countries. The Irish government has the following objectives:

  • Increasing the volume of investment in the IT sector to 50 billion euros by 2030.
  • Creating 200,000 new jobs in the IT sector by 2030.
  • Making Ireland the leading IT development center in Europe.

Malta. Among the top jurisdictions where to open a company for IT, you can include Malta. But, it has a number of features that make it more suitable for large investors. Why do we emphasize that it is the choice for large investors?

One of the main reasons is the high corporate tax rate (35%). In addition to tax levies, once registered, IT companies in Malta have to pay a number of other mandatory fees such as annual registration renewal fees and reporting fees. These costs can be significant for smaller companies.

Opening an account in Malta is a painstaking process as banks are required to conduct thorough due diligence on all corporate clients, their ultimate beneficiaries as well as legal agents. Verification involves gathering information from various sources including government registers, tax authorities and financial institutions. Strict compliance measures in Malta are aimed at preventing the banking system from being used for money laundering.

Thus, for smaller IT companies looking for a more accessible jurisdiction, there are alternatives to Malta. As we have already mentioned, these include Armenia, Georgia or Madeira. These countries offer lower tax rates and company maintenance costs.

Popular jurisdictions for IT business in Asia

Where to open an IT company in Asia? Another popular request among investors (both start-ups and large investors). In recent years, the Asian region has made significant progress in the field of aiti. Singapore and the UAE are leaders in the IT industry not only in Asia, but globally.

Singapore is known as one of the leading centers of IT innovation in the Asian continent and globally. Establishing an IT company in Singapore will open access to a number of advantages, the main ones being a developed IT infrastructure, a qualified talent pool and various incentives for IT investors.

Singapore's pecuniary is acknowledged as one of the most variegated in the globe. Across the preceding scarce years, the nation's informatics domain has burgeoned and matured swiftly. Informatics fledglings in Singapore are captivated by such facets of the jurisdiction:

  • Favorable position. Singapore is located in the center of the Asia-Pacific region, which provides access to a huge market.
  • Developed infrastructure. The city has one of the most advanced infrastructures in the world. This includes a high-speed Internet network, reliable electricity, and an advanced logistics system.
  • Skilled workforce. The jurisdiction is home to a large number of highly skilled information technology professionals.

In 2022, Singapore was ranked No. 1 in the Global Startup Ecosystem Report. This ranking is based on such indicators as the number of startups, the amount of investment in startups, the level of infrastructure development and support from the government. Singapore's legal system is based on English common law. The city's strong legal system is one of the factors contributing to its economic success. It provides a stable and predictable business environment, which is particularly attractive to investors interested in relocating an IT company to another country.

The administration has implemented discriminative fiscal tariffs for information technology enterprises in Singapore:

  • Comparatively low corporate income tax (CIT) rate of 17%. However, there are exemptions for new IT companies (detailed below).
  • For firms that generate profits from the use of IP, the CIT rate is reduced to 10%.
  • No taxes on imports of equipment and software for use in the course of IT companies' operations.

Supplementary levies for informatics enterprises in Singapore - advantages for nascent undertakings under the Origination Tax Dispensation Stratagem (OTDS) initiative. This stratagem confers nascent undertakings with CIT dispensation on the initial SGD 100,000 (approximately US$72,931) of leviable earnings for the inaugural 3 annual cycles of functioning and 50% on the ensuing SGD 100,000 of earnings.

To be eligible for STES, a startup must meet the following criteria:

  • Be registered in Singapore as a limited liability company (LTD) or limited liability partnership (LLP).
  • Have an annual revenue of less than S$10 million.
  • Engage in activities that meet the STES criteria, namely ICT companies developing software, mobile applications, telecommunication technologies, etc.; biotechnology companies developing medical drugs, diagnostic tools, etc.; industrial companies developing new products and technologies; social enterprises addressing social issues.

In addition to the above programs, the government has launched Startup SG Founder, which provides a number of incentives to investors:

  • Capital Gains Tax Discount: Investors investing in startups registered in Singapore can receive a 75% discount on capital gains taxes.
  • Tuition reimbursement: investors who undergo the Startup SG Founder program can receive tuition reimbursement of up to S$5,000.
  • Startup search support: investors are provided with services to find startups that meet their investment criteria.

Crucial! In Singapore, the administration possesses a conscientious methodology to scrutinizing and assessing enterprises in relation to ledger-keeping. Ledger-keeping is a pivotal facet of operating an enterprise. Appropriate ledger-keeping can assist you in managing your monetary matters, formulating judicious determinations, and adhering to statutes. If you are inclined to enrolling an Informatics Technology corporation in Singapore, this juncture (alongside additional rudimentary prerequisites) ought not to be disregarded.

UAE is recognized as another favorable country for IT business relocation. The UAE, located at the crossroads of major trade routes, is one of the largest business centers for building business connections. The Emirates is recognized as a competitive IT market for a number of reasons:

  • High demand for IT services.
  • Low taxes.
  • Access to specialized personnel.
  • Ability to serve clients all over the world.

Consequent to these elements, the UAE has metamorphosed into the domicile of several paramount Information Technology enterprises, comprising Amazon Web Services, IBM, and Microsoft. Rivalry within the Information Technology marketplace is elevated, yet this begets avenues for ingenuity. Information Technology enterprises in the UAE that can effectively contend in this milieu will have the capacity to attain remarkable triumph.

The UAE has many modern offices that meet international standards, a number of top-notch tech institutions that provide support to startups. For example, Dubai has the Dubai Technology Entrepreneur Center (DTEC), which provides startups with office space, funding, technical training and other resources.

The comprehensive support of incubators attracts overseas investors to register IT companies in the UAE. Incubators provide startups with the resources they need for their development. There are several incubators in the UAE, the most famous being Dubai Future Accelerators, In5 and Dubai Silicon Oasis.

The main tax incentive for IT startups in the UAE is the absence of income tax requirements for IT firms whose annual profits do NOT exceed UAE Dirham 375,000 or $102,097. In addition, setting up an IT company in the UAE gives access to tax benefits:

  • Enrollment of an Information Technology corporation in the United Arab Emirates Liberated Zone absolves its proprietors from Corporate Income Tax for 50 cycles.
  • Nary duty on revenue (procured within the UAE) of proprietors and staff of Information Technology enterprises.
  • Information Technology corporations are absolved from remitting Value Added Tax on transactions of their commodities/services.

Another jurisdiction that has earned a legitimate place in the top best countries for IT companies is Hong Kong.

Hong Kong is attractive for IT business relocation as it has one of the freest economies in the world, providing a favorable environment for entrepreneurship. Xiangyang has a progressive taxation system that allows firms to save on taxes.

The city is located in the center of the Asia-Pacific region, which provides access to vast markets. The jurisdiction is home to a large number of skilled IT professionals. In addition, Hong Kong has an advanced infrastructure, including high-speed internet, which provides a comfortable environment for IT startups. As a result of these factors, Hong Kong has become home to many large IT corporations, including Alibaba, Tencent and Meituan.

The enterprise enrollment process herein transpires merely in a handful of days, and levies are comparably diminutive. The corporate fiscal imposition scale fluctuates betwixt 8.25% to 16.5%, nevertheless, enterprises abstaining from operations within Hong Kong may receive dispensation from remitting corporate fiscal assessments for a span of up to 5 years.

The Hong Kong Science and Technology Park (HKSTP) provides a wide range of opportunities for business people looking to establish an IT company in Hong Kong. HKSTP offers world-class infrastructure including laboratories, offices and data centers, as well as incubation and venture funding programs for IT startups.

HKSTP provides IT corporations and startups with a wide range of counsel and succor, including assistance with company incorporation, licensing and certification. The Science and Technology Park has an extensive international network to help IT firms enter the global market. This includes participation in exhibitions and conferences, cooperation with other innovation centers around the world.

Where else can it be profitable to start an IT company?

In addition to the countries described above, the United States, Canada and Australia attract investors in IT. It should be noted that in 2022, the United States attracted about 200 billion dollars of foreign direct investment in the IT sector. Canada and Australia attracted about $50 billion and $30 billion, respectively. Many experts predict that investment in the IT sector in these countries will continue to grow in the coming years.

United States. The United States is the undisputed leader in information technology. They are ranked No. 1 in the IT industry competitiveness ranking, which is published annually by the Economist Intelligence Unit. In this ranking, the U.S. receives high marks on all key indicators, including:

  • Industry size and growth: The US IT industry is the largest in the world, with an annual turnover of over 2.3 trillion USD. The US is home to many of the world's largest IT corporations, including Apple, Microsoft, Amazon, Google, Facebook.
  • Innovation: The U.S. is the world leader in I.T. research and development.
  • Human resources: The United States has the highest level of trained IT professionals in the world.

New York, Washington, Delaware are noted in the ratings as the best states for registering IT companies in the USA. But, the tax burden on IT-business in the USA is quite high. The federal corporate tax rate is 21%, and some states have additional income taxes.

The high tax burden can be a serious obstacle to establishing IT companies in the US. However, for large IT firms that have sufficient financial resources, the US is still an attractive place for IT companies to relocate to.

Canada. Setting up an IT company in Canada can open up unlimited opportunities for scaling. The country's technology sector accounted for 11% of Canada's GDP in 2022 and created 1.8 million jobs. The country's existing technology companies are global leaders in areas such as software, AI, cybersecurity, and quantum computing.

Canadian technology companies export their products and services globally. In 2022, Canada's high-tech exports totaled $200 billion. Investors choose to incorporate an IT company in Canada for several reasons:

  • Canada has a robust economy with low inflation.
  • The minimal corporate impost duty proportion in the realm is 15%, which is inferior to in most disparate territories. Nevertheless, impost abatements are executed on a gradational gradation. That is, the proportion can be as towering as 33%.
  • The country has high-speed Internet, a developed telecommunications network and a large pool of qualified personnel.
  • The government has introduced a number of programs to support foreign investors, such as a startup visa program.

Toronto and Vancouver are the top two provinces for IT startups in Canada. Both cities have strong technology clusters. Toronto is home to major technology companies such as Google, Amazon, Microsoft and IBM. The city is also home to several leading universities that produce skilled technology professionals.

Vancouver is the second largest city in Canada and is known for its culture of innovation. The city is home to many startups and tech companies working in AI, machine learning and blockchain.

Financial aid

Non-financial support

  • Start-up Visa Program: an immigration program for foreign entrepreneurs who want to establish or join an innovative start-up in Canada. The Start-up Visa allows start-up founders to obtain permanent residency in Canada.
  • Startup Grants: a program that provides grants to early-stage startups. Grants can be used to fund R&D, product development or marketing.
  • Investment Funds: The government and private investors provide funding to startups through various investment funds.
  • Business incubators and gas pedals that provide startups with support in marketing, sales, management and other aspects of running a business.
  • A startup community that provides support and experience sharing.

Australia. Long-term business success can be ensured by registering an IT company in Australia for several reasons:

  • Australia is located at the center of the Asia Pacific region, which is one of the fastest growing Aichi markets in the world. The location gives access to a global customer base.
  • Australia has a strong economy with a high quality of life and a growing IT services market. In 2022, the Australian IT services market grew by 10.2% to reach A$108 billion (US$68,553,000).
  • Australia has DTA agreements with more than 60 countries.
  • The country has a huge pool of skilled I.T. professionals.

However, when assessing the pros and cons of setting up an IT company in Australia, special attention should be paid to the tax burden on business, which is quite high. The basic rate of corporate tax is 30%. In addition to corporate tax, IT companies in Australia are subject to other taxes such as:

  • VAT at the rate of 10%.
  • Personal income tax at rates from 0% to 45%.

Other factors making it difficult for small businesses to get started in Australia's IT sector:

  • High competition. The Australian IT sector is recognized as one of the most developed in the world, so small companies need to compete with the big players in the market.
  • High costs. IT product development and implementation can be expensive, which can be a barrier for small companies with limited budgets.

With this in mind, small IT firms typically look for alternatives to Australia in terms of the financial cost of launching and maintaining a business.

The main advantages of IT companies relocating abroad

  • Market expansion. IT firms that relocate to countries with developed economies and high levels of consumption gain access to new markets. This allows them to increase revenue and scale their business.
  • Levy amelioration. Certain nations proffer propitious toll systems to informatics enterprises. This may culminate in diminished toll expenditures and augmented gains.
  • Access to adept practitioners in the sector. Certain nations like the United States, United Kingdom, and Singapore boast a voluminous and proficient Information Technology labor marketplace. This may afford enterprises entry to the preeminent acumen, fostering heightened efficacy and ingenuity.
  • Increased prestige. Relocating a company to another country can increase its prestige in the eyes of clients and partners. This can be especially true for firms planning to expand into international markets. It can also be beneficial for attracting and retaining talented employees.
  • Asset protection. Registration in a jurisdiction with developed legislation can help protect the company's assets from the unfairness of partners or competitors. This may be particularly relevant for companies that operate in countries with unstable political situations.

The process of registering an IT company is quite laborious. It is recommended to engage specialists who will help you choose a jurisdiction, prepare the necessary documents and provide competent support in registering an IT company abroad at all stages of the process.

Launching an IT startup abroad: document requirements

The full list of documents that need to be prepared to register an IT company abroad depends on the jurisdiction. However, there are a number of common documents required in most cases:

  • Application for company registration. This application must specify the name of the company, the types of activities, the amount of the authorized capital and the company's address.
  • Memorandum of Association or Articles of Association. These documents define the structure of the company, its management bodies and decision-making procedure.
  • Documents of the founders. These may be passports and other documents confirming the identity of the founders.
  • Documents on the appointment of directors and officers of the company. These documents should contain information on passport details and residential addresses of directors and officers.
  • Business Plan.
  • Certificate of origin of capital.
  • Records concerning the existence of a bureau or delegate establishment of the corporation within the nation of amalgamation.

The timeframe for registering an IT company abroad may vary depending on the jurisdiction. On average, the process takes from 2 weeks. The best solution is to contact specialists who will help you prepare the necessary documents and go through the registration procedures.


The informatics domain is among the exceedingly evolving domains of the contemporary economy. The escalation of the informatics marketplace is propelled by sundry elements, encompassing perpetual informatization, escalating requisition for nebula computation and synthetic intellect, and ascending informatics disbursement in the civic sphere in the majority of nations.

Innovative technologies are emerging literally every day, and they are powerful tools that can be used by companies to scale internationally. It is important to use new technologies responsibly and take into account potential risks. If we talk about the progress in the development of the IT environment by country, Singapore and the UAE are recognized by many experts and investors as the best locations in the rating of countries for IT business relocation. They are located in strategically important regions, which makes them convenient for offering services to a wide range of clients around the world.

However, along with advantages, Singapore and the UAE have some disadvantages. For example, both countries have high living and maintenance costs for businesses. Britain and Madeira are alternative jurisdictions for registering IT companies. They offer a stable legal environment, progressive business climate and reasonable tax policies. Madeira is considered a budget solution for launching an IT startup.

Ultimately, choosing a jurisdiction to establish an IT company is an individual decision that should be made based on the specific needs of the business. If properly planned and implemented, it can bring significant benefits for your project. International law lawyers will help to optimize registration processes and choose the most suitable country for IT company relocation.

TK Deal professionals specialize in supporting IT companies and can offer comprehensive support in meeting all regulatory requirements in the jurisdiction of your choice, we also offer advice on how to legally formalize a start-up project in IT.