Germany - Next global destination for your business

Germany’s economic freedom score is 73.7, making its economy the 14th freest in the 2023 Index. It is ranked 10th out of 44 countries in the Europe region, and its overall score is higher than the world and regional averages.

Germany Economy

The economy of Germany is a highly developed social market economy. It has the largest national economy in Europe, the fourth-largest by nominal GDP in the world (almost tied with Japan), and fifth by GDP (PPP).

Foreign Direct Investments

It is considered an attractive country for foreign direct investment. According to data from national Trade and Investment Agency Germany’s federal states registered 1,806 FDI projects in 2021 a 7% rise compared previous year. 

Opportunity Mapping

It is one of the leading European markets for e-commerce cross-border trade, and their already established delivery infrastructure is another huge benefit to retailers looking to reach the country’s 58 million online shoppers.

India in Germany

The total bilateral trade between the two countries stood at US$24.8 billion during the financial year (FY) 2021–22, while it was valued at US$21.76 billion in FY 2020–21. In February 2022, Robert Bosch announced its plans to invest a total of US$260 million in India over a five-year period towards the localization of advanced automotive technologies and in building digital platforms like the mobility marketplace and the mobility cloud platform.

Corporate Structure

Germany is most attractive location for business in the European Union. Company formation can be significantly cheap. From office overheads to the cost of living, it is notoriously cheaper than the majority of its European counterparts.

Mini (GmbH)

It can be incorporated with capital of as little as €1 or any amount up to the €25,000 required for GmbH. . 1/4 of a mini-GmbH’s annual profit has to be contributed to its capital reserves until they reach €25,000, at which point it can become GmbH.

Limited Liability Corporation (GmbH)

The minimum share capital required is €25,000 but this can be made up of contributions in kind. At least €12,500 must be contributed when incorporating the GmbH. The company only requires one director and one shareholder.

Stock Corporation (AG)

The minimum share capital is €50,000 and the company may have a minimum of one shareholder. This type of company is subject to heavy regulation as a listed company. AG’s have a “two-tiered board” structure, consisting of a supervisory and a management board.

Foreign Entities in Germany

To register a foreign company in Germany with a VAT registration, you will need to complete a tax form and submit it to the Finanzamt (finance office). The Finanzamt will then issue your tax number. As a result of choosing this basic option and applying for a VAT number in Germany, companies are also able to carry out transactions that are taxable in Germany, to export products and to import products.

Taxation System

Taxes are levied by the federal government, federal states and municipalities. Tax administration is shared between two taxation authorities: the Federal Central Tax Office and the approximately 650 regional tax offices.

Corporate Tax

Germany levy tax rate at 15% and is then subject to a surcharge of 5.5%. This results in a total tax rate of 15.825%. It taxes its corporate residents on their worldwide income. However, most double tax treaties (DTTs) exempt income attributable to a foreign permanent establishment (PE).

Dividend Tax

The taxation of portfolio dividends was enforced and it stipulates that all shareholders owning less than 10% dividends in a company are subject to a corporate income tax of 15.825% including solidarity charge. 

VAT

Proceeds of sales and services effected in Germany are subject to VAT under the common system of the European Union at the standard rate of 19% (7% on certain items, such as food and books). The taxpayer generally is entitled to deduct the VAT charged on inputs from that payable on outputs.

Taxation of Non Resident entities

The controlled foreign companies regulations (CFC rules) apply ·to a foreign company established in Germany receiving passive income. German subsidiaries of foreign companies are subject to 25% withholding tax on dividends. However, if a double taxation agreement is enforced between Germany and another country, the dividend tax may be reimbursed. Foreign companies that have a permanent establishment in Germany are also subject to the municipal trade tax that ranges between 7% and 17.2% depending where the permanent establishment is located.

Foreign entity options

Germany is having the largest economy in Europe. Moreover, it has a social market economy, meaning it embraces the spirit of free enterprise but at the same time imposes controls and other measures to establish fair competition within the country.

Branch Office

It is an establishment that will be connected to the parent company and it does not have assets or accounting system of its own. The foreign investors are only required to register with the local trade office and the commercial register for setting up a branch. 

Subsidiary Company

It is usually considered a limited liability company (GmbH) and it must have its own share capital, management, and accounting system. It is allowed to conduct business operations in name of parent company. It is required to register with the local commercial register and the trade office. 

Joint Venture

JVs can be used in every sector of the German economy. However, they are mainly used for projects which require special measures. Cross-border JVs are relatively common. Foreign parties often form EU or domestic entities to hold their interests for tax reasons. 

Germany Business

Germany has the world's fourth-largest economy and is the powerhouse in the European economy, being featured as the largest in the European Union. The country is a major hub for business in Europe. Both the service and the manufacturing industries are extremely buoyant in Germany, a country respected world-over for its automotive and engineering sectors. German culture standards and values are central to doing good business. 

UAE - Next global destination for your business

The UAE is the Middle East's third largest economy, and one of the wealthiest countries in the region on a per capita basis. Other than its abundant oil & natural gas reserves, UAE has been attracting great Tech and Trade investments.

UAE Economy

The economy of the United Arab Emirates( UAE) is the 4th largest in the Middle East, with a gross domestic product (GDP) of US$498 billion (AED 1.83 trillion) in 2023. An expanding manufacturing base, and a thriving services sector are helping the country to diversify its economy.

Foreign Direct Investments

The UAE was ranked 1st in the West Asia region since it received 47.1% of the total FDI inflows to region, amounting USD 48.3 billion. The UAE also was ranked 1st in the MENA region as it accounted for 32.4% of the total FDI inflows to region, amounting USD 70.2 billion.

Opportunity Mapping

Business opportunities are not just open to the citizens of the United Arab Emirates but also to foreign investors as well. There are opportunities in various sectors such as Manufacturing, E-commerce, Consulting, Book keeping, Accounting, Automotive, Retail business.

India in UAE

India-UAE trade rose to $85 billion in 2022. Furthermore, the UAE was India’s third largest trading partner and second-largest export destination in FY2022-23. Conversely, India was the UAE’s second largest trading partner. The UAE is the fourth largest investor in India, Its cumulative FDI inflows between April 2000 and September 2022 stood at around $15.2 billion. Indian companies having base in UAE are TCS, Wipro, Reliance, Bank of Baroda.

Corporate Structure

UAE is an attractive destination for businesses worldwide with multiple Free Zone establishments. We here, introduce you to Jafza.

Free Zone Establishment (FZE)

An FZE is a single shareholder limited liability company that can be incorporated by an individual or non individual shareholder (company). There is no foreign ownership restriction, and companies are governed by independent Free Zone Authority.

Free Zone Company (FZCo)

An FZCo is a multiple shareholder limited liability company that can be incorporated by an individual or non individual shareholder (company). There is no foreign ownership restriction, and companies are governed by independent Free Zone Authority.

Public Listed Company

The Jafza PLC allows for the set up of a company that is essentially a Limited Liability Company meaning that the liabilities of the company. It can have 2 or more shareholders. A PLC must list shares on a stock exchange in accordance with market laws and may allow public to subscribe.

Foreign Entities in UAE

Foreign companies licensed to work in the state based on the provisions may not start their business in the state unless they are registered in the Foreign Companies Register in the Ministry of Economy. The offices and branches of the foreign companies shall be the headquarters of its business and its business shall be subject to the provisions of the law. The foreign companies, its offices, and branches shall have an independent budget, independent profit /loss accounts, and shall have an auditor.

Taxation System

The United Arab Emirates is a federation of seven Emirates, with autonomous federal and local governments. The UAE has historically been a low-tax jurisdiction.

Corporate Tax

The corporate tax rate is at 9% of the net profit made by the businesses. In order to extend support to small businesses and start-ups, the corporate tax rate will be '0' % if the net profit is up to AED 3,75,000 .

Dividend Tax

The proposed regime of corporate tax in the UAE will exempt all types of domestic dividends earned from UAE companies. This will include dividends paid by a Free Zone Person who benefits from the 0% CT regime. Dividends paid by foreign companies are also exempt from taxation. 

VAT

The general VAT rate is 5% and applies to most goods and services, with some goods and services subject to a 0% rate or an exemption from VAT. The 0% VAT rate applies to goods and services exported outside the VAT-implementing Gulf Cooperation Council (GCC) member states, International transportation, the supply of crude oil/natural gas.

Taxation of Non Resident entities

In certain Emirates, branches of foreign banks are governed by special banking tax decrees, under which they are taxed at 20% of their adjusted taxable income. Under UAE CT Law, branch of a non-resident person could be regarded as a Permanent Establishment in the UAE and the income attributable to such branch could be subject to UAE CT. Additionally, the UAE does not have a branch profits tax. Repatriation of profits between branches and their head offices are also not subject to withholding tax (WHT) or other forms of repatriation tax in the United Arab Emirates.

Foreign entity options

Investors conduct thorough due diligence to make sure the firm structure they choose best serves their commercial goals and assist them in bringing their concept to life.

Branch Office

Branch of a company is a legal entity of the parent company which is 100% owned by the parent company and operate under the same name and conduct the business activities. It also does business under the parents company name. A branch must employ an Emirati national as a ‘ Service Agent’.

Subsidiary Company

Subsidiary is a legally autonomous company that operates under the rules of the UAE and the Emirate in which it is based. Even though it is treated as a separate entity, the foreign corporation will operate as a shareholder and hence have decision-making authority over it. It may benefit from additional protection as a result of the UAE's double tax treaties.

Joint Venture

A joint venture is similar to a partnership in that it is formed by at least two UAE-nationals. In this case, only one of the partners’ names can be used in the company name. A JV is commonly formed either contractually or through the formation of a limited liability company under Federal Law No. 2 of 2015 (the Commercial Companies Law). 

UAE Business

UAE delivers efficiency, access to growth markets, security and a forward-looking ecosystem for accelerated growth. Dubai brings people, process and technology seamlessly together to create an agile foundation for every industry. Oil and gas are one of the UAE’s main industries. After all, it was what transformed the country into the economic powerhouse it is today. However, other sectors are ripe for growth, too. For example, renewable energy is huge as the country looks to break its dependence on fossil fuels. 

Switzerland - Next global destination for your business

Switzerland’s multilingual and multicultural population can present business strategy, these elements make Switzerland a good potential test market to determine the viability of products for export and make Switzerland a hub for international business activities.

Switzerland Economy

Switzerland’s economic freedom score is 83.8, making its economy the 2nd freest in the 2023 Index. Its score is about the same as last year. Switzerland is ranked 1st out of 44 countries in the Europe region, and its overall score is higher than the world and regional averages.

Foreign Direct Investments

Foreign direct investment, net inflows (% of GDP) in Switzerland was reported at 3.4304% in 2022, according to the World Bank. Switzerland Foreign Direct Investment (FDI) increased by USD 13.9 billion in Mar 2023, compared to the previous quarter.

Opportunity Mapping

Switzerland serves as a test market for new high-tech and consumer products and is strategically placed as a gateway to EU markets. It is one of the world’s top countries for R&D, with further potential for partnerships in areas like medtech, nanotech, cleantech, and renewable energy.

India in Switzerland

India is one of Switzerland's principal partners in Asia. Regular high-level meetings and visits have strengthened relations between the two countries. Switzerland and India have signed numerous bilateral agreements covering a range of areas (trade, development cooperation, education and vocational training, visas, migration, air traffic, investment, finance, taxation and scientific and technological cooperation).

Indian companies having base in Switzerland are TCS, Infosys, Wipro & Mahindra Satyam.

Corporate Structure

Switzerland is a global leader in innovation and home to some of the largest multi-national companies in the world. It is also ranked one of the best places to live. 

Limited Partnership

The limited partnership is a partnership which contracts at least one natural person as an indefinitely liable partner (general partner) and at least one natural person, legal entity or commercial company as a partner with limited liability (limited partner) and does not require minimum capital.

Swiss Corporation (AG)

The AG must be formed by at least three shareholders. The liability of the company is limited to its assets. The minimum amount for the share capital must be CHF 100,000, of which at least CHF 50,000 or 20% (for larger capital) must be fully paid in.

Limited Liability Company (GmbH)

GmbH is an independent legal entity that requires a minimum share capital of CHF 20,000. At least 1 of the managing directors must be a Swiss resident and the company must have at least 2 shareholders, which don’t have to be Swiss citizens. The founders have the right to perform the duties of the governing bodies.

Foreign Entities in Switzerland

Foreign businesses are also allowed to have branch offices in Switzerland, offices that have to be registered with the Commercial Registry of the canton in which they are located and they need to have an appointed Swiss-resident representative. To open a bank account in Switzerland, a non-resident company would need to get in touch with a Swiss bank and request an application form, which is the same as going into a bank and asking to open an account for a resident one. 

Taxation System

According to the Global Competitiveness Index, investors’ property rights are strongly protected and investment incentives are barely distorted by taxation.

Corporate Tax

Switzerland levies a direct federal CIT at a flat rate of 8.5% on profit after tax. CIT is deductible for tax purposes and reduces the applicable tax base (i.e. taxable income) to 7.83%. As a general rule, companies in Switzerland pay a total corporate tax rate of somewhere between 11.9% and 21.0%.

Dividend Tax

A 35% withholding tax is levied on dividends paid by a Swiss corporation. Resident individuals, and legal entities, can get full refunds. Foreign shareholders that receive dividend from a Swiss company may be able to get a partial refund if their home country is part of tax treaty network.

VAT

The Swiss VAT system is in accordance with some EU VAT rules, despite Switzerland not being an EU member state. VAT is usually 7.7% on most commercial exchanges of goods and services. There’s a lower VAT rate of 3.7% applied to the hotel and lodging industry.

Taxation of Non Resident entities

Non-resident companies may be subject to Swiss CIT if they (alternatively) have a PE in Switzerland, own real estate property in Switzerland, are partners of a Swiss business, have loan receivables secured by a mortgage on Swiss real estate property, or deal with or act as a broker of Swiss real estate property. Non-resident companies are taxed on their income generated in Switzerland. Several double taxation agreements (DTA) ensure that individuals and legal entities who earn income in two countries are not taxed twice. At present, over 100 such DTAs are in force.

Foreign Entity Options

Switzerland is the best location for innovation. It offers stable political, economic and financial framework conditions combined with the highest standard of life. 

Branch Office

The branch office is a satellite of the foreign parent company with no legal and separate identity. The parent company will be accounted liable for the branch office’s liabilities. The Swiss branch office must be registered with the Swiss Commercial Register and requires at least 1 Swiss resident in the management board, it must also have a registered office. 

Subsidiary Company

The Swiss subsidiary can be regarded as an independent company with a majority of shareholders and management board in the parent company. A subsidiary is usually registered as a Swiss limited liability company. Opening a subsidiary in Switzerland does not require any business permits, only registration with the Commercial Register.

Joint Venture

Swiss law does not distinguish between foreign and domestic JV parties as such, and therefore offers a liberal framework for structuring a JV. A foreign investor is in principle free to set up a cross-border JV with a Swiss partner. The liability of each JV party is limited to its amount of subscribed share capital in the JV company.

Switzerland Business

Switzerland is the most competitive business center in the world. There are numerous good reasons to locate a business in Switzerland: innovation and technology, a liberal economic system, political stability, close links with foreign markets, excellent education and healthcare systems, an outstanding infrastructure, a high standard of living, and a competitive tax system. It is a highly industrialized technology location with leading research facilities and access to highly qualified specialists.

France -Next Global destination for your business 

France is a business-friendly country, with one of the largest markets in Europe, and access to the European single market. Its capital, Paris, is an important financial center in the region and the European leader in venture capital.

France Economy

The economy of France is a highly developed social market economy with notable state participation in strategic sectors. It is the world's seventh-largest economy by nominal GDP and the tenth-largest economy by PPP. constituting around 4% of world GDP.

Foreign Direct Investments

France attracts bulk FDI amongst its European counterparts, being 13th largest recipient of FDI in the world as per UNCTAD. Luxembourg, Switzerland, Netherlands and the United Kingdom are the main investors in France and represent more than 50% of the stock of FDI.

Opportunity Mapping

France is an economically refined nation with a large, diverse, and sophisticated consumer base. There are opportunities for exporters with innovative products in various sectors, including aerospace, consulting business, food products, pharmaceuticals, renewable energy technologies.

India in France

The economic ties between India and France have flourished, paving the way for enhanced cooperation and mutual prosperity. Trade relations have witnessed steady growth, with bilateral trade reaching an impressive $13.4 Bn in 2022-23, marking a significant 7.72% increase from the previous year.

Indian companies having base in France are Infosys, Wipro, Bharat Forge, Muragappa, United Phosphorus, Crompton Greaves (Avantha Group), Titagarh, Air Works, Biological E, Transasia and Axis Aerospace.

Corporate Structure

Entrepreneurs must be aware of the laws, rules, and regulations of France in order to successfully incorporate and operate a business there. It also give investors the option to choose the corporate structure that best suits their needs.

Limited Liability Company (EURL)

This can be considered as a special category of limited liability company as the EURL has only one shareholder. Its operating rules are very similar to those of the SARL. At the time of the company's constitution, at least 20% of cash contributions must be made available. 

Private Limited Company (SARL)

SARL is the most common form of company in France. This type of business can only be incorporated by at least two shareholders, and they can be natural or legal persons. This structure is usually recommended for small and medium-sized companies which are set up in France.

Public Limited Company (SA)

The SA is composed of at least two shareholders (and 7 if it is listed on the stock exchange) with a minimum share capital of 37 000 €. It is headed by a President and a Chief Executive Officer (who may be one and the same person) and by a Board of Directors composed of at least three people.

Foreign Entities in France

Certain formalities are imposed on different companies depending upon the type of business entity such as in the case of joint stock companies, at least 50% of the share capital must be deposited upon formation, the private company can have one or two directors, however, the minimum number is one and the public company must have a board of directors comprised of 3 to 18 members. French companies are also required to appoint auditors who will verify their accounts.

Taxation System

French investors benefit from a wide network of tax treaties with 122 nations, which helps them manage their businesses successfully and prevents double taxation on their income.

Corporate Tax

Large enterprises (annual turnover of EUR 250 million or more) are assessed to corporate tax at the unified standard rate of 25%. SMEs (turnover below EUR 10 million) are subject to a reduced corporate tax rate of 15% on profits up to EUR 42,500 and at standard rate on the excess over EUR 42,500.

Dividend Tax

Dividends paid to Investor are taxed at the rate of 21% on the gross amount of dividend received by Investors. The 12.8% withholding tax rate applies to foreign individuals in France, while the 28% tax rate applies to legal entities and private recipients.

VAT

The standard VAT rate in France is 20%. It applies to most goods and services. The two reduced VAT rates are 10% and 5.5%. The super-reduced rate is 2.1%. France also has some zero-rated goods, the sale of which must still be reported on your VAT return, even though no VAT is charged.

Taxation of Non Resident entities

Non-residents in France are only taxed on their French-sourced income. Non-resident taxes are typically collected by withholding at the source. These withholding taxes are applied at progressive rates of 0%, 12%, and 20%, depending on the total amount of taxable income. A non-resident company is subject to CIT in France on income attributable to French business activity or to a French PE, as well as on income from real estate located in France. Non-resident companies are not taxable in France regarding capital gains derived from the disposal of French assets unless these are part of a PE.

Foreign entity Options

The French economy remains diversified and relatively resilient. Entrepreneurship is made possible by institutional characteristics including robust property rights protection and a generally effective regulatory environment. 

Branch Office

A branch is an office through which a foreign company engages in business in France. The branch has no independent legal personality although for tax and foreign financial relations purposes it is treated Independent. Foreign company is directly and fully responsible for all liabilities and undertakings of its French branch office.

Subsidiary Company

The subsidiary company is a separate legal entity created under and governed by French law. It is an independent entity from the foreign parent company shareholder and, in principle, shareholders have no liability for the debts or undertakings of the subsidiary, the recourse of the subsidiary's creditors or co-contracting parties being limited to the assets of the subsidiary.

Joint Venture

There are 2 types of JV's, First is Corporate JV which can take the legal form of a group or of a commercial company with or without limitation of liability. Second is Contractual JV, this must comply with the general rules of contract law. It has no separate corporate personality from the parties to it.

France Business

France is the second largest EU economy. Three sectors dominate its employment: health & social care, wholesale & retail trade and manufacturing. Some leading global companies have their headquarters in France. France has a stable business climate that attracts investors from around the world. The French government devotes significant resources to attracting foreign investment through policy incentives, marketing, overseas trade promotion offices, and investor support mechanisms.