Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

A guide to business relocation in Europe 2012/13


Published on

Due to popular demand 'A guide to business relocation in Europe' has been updated and is now available as a key reference guide for companies looking to move all or some of their operations overseas for commercial reasons. Many companies from large multinationals to entrepreneurial businesses are choosing to relocate part or all of their operations to new territories. There are a number of reasons why commercially a group may consider relocating part of their operations, but it is also important to understand the tax consequences at the outset.

This guide outlines what type of activity is commonly relocated and the benefits of doing so and it profiles key locations within Europe which are popular destinations for business relocation. The reasons why some destinations are popular are explained and the key commercial and tax factors to be taken into account when deciding to relocate. This is a must read guide for those looking for an overseas move and those that are already operating abroad.

Published in: Business
  • D0WNL0AD FULL ▶ ▶ ▶ ▶ ◀ ◀ ◀ ◀
    Are you sure you want to  Yes  No
    Your message goes here

A guide to business relocation in Europe 2012/13

  1. 1. 2012/2013A guide to businessrelocation in Europe
  2. 2. Contents Introduction 01 Other territory profiles 60 Key country summary 02 – Austria 61 Relocation options 06 – Czech Republic 62 Grant Thornton contacts 19 – Denmark 63 Key country profiles 20 – Estonia 64 – Belgium 21 – Finland 65 – Cyprus 25 – France 66 – Hungary 29 – Germany 67 – Ireland 33 – Greece 68 – Luxembourg 37 – Italy 69 – Malta 41 – Latvia 70 – The Netherlands 45 – Lithuania 71 – Spain 49 – Poland 72 – Switzerland 52 – Portugal 73 – United Kingdom 56 – Russia 74 – Sweden 75 – Turkey 76About Grant ThorntonGrant Thornton is one of the worlds leading organisations of independent assurance, tax and advisory firms. These firms helpdynamic organisations unlock their potential for growth by providing meaningful, actionable advice through a broad range of services.Proactive teams, led by approachable partners in these firms, use insights, experience and instinct to understand complex issues forprivately owned, publicly listed and public sector clients and help them to find solutions. Over 31,000 Grant Thornton people, across100 countries, are focused on making a difference to clients, colleagues and the communities in which we live and work.
  3. 3. A guide to business relocation in EuropeIntroductionMany companies from large multinationals to Grant Thornton member firms around the Our guide outlines what type of activity isentrepreneurial businesses are choosing to world have significant experience in advising commonly relocated and the benefits of doing sorelocate part or all of their operations to new clients on how their businesses can benefit from and it profiles key locations within Europe whichterritories. There are a number of reasons relocation. The highest profile cases involve full are popular destinations for business relocation.why commercially a group may consider corporate migrations or inversions – the head We explain the reasons for their popularity andrelocating part of their operations, but it is office and holding company structure summarise key commercial and tax factors to bealso important to understand the tax transferring to a new jurisdiction. However the taken into account when relocating.consequences. options are numerous and the right answer may The key to successful business relocation is be much more simple, from setting up a regional early planning, working to achieve commercial hub to offshoring support services, or setting up objectives and careful execution. an offshore intellectual property (IP) We hope you will find this guide useful in management vehicle. assessing whether business relocation is right for As governments seek to attract successful, you. If you would like to discuss the next steps entrepreneurial businesses through the please contact your own Grant Thornton introduction of favourable tax and legal regimes adviser or one of the Grant Thornton contacts the level of business relocations is likely to listed on page 19. intensify in coming years. Nick Farr Jenny Batchelor International tax partner Tax director T +44 (0)20 7728 2691 T +44 (0)20 7728 2754 E E A guide to business relocation in Europe 1
  4. 4. Key country summary 10 key European jurisdictions 1 Belgium – the commercial benefits of being located at the heart of Europe, a good IP regime for patents and a very attractive financing system (with notional interest deductions) means it is often used, particularly as an IP holding company location. 2 Cyprus – widely used for investment into Russia and Central Europe owing to a strong treaty network, it is increasingly used for service 4 companies, including the financial services sector, attracted by a 10% 7 10 corporate tax rate, simple regime, and relatively low cost. 1 3 Hungary – a relatively new holding company location destination, its 5 location is ideal for accessing other Eastern European countries. It also 3 has a straight forward tax system, a low overall tax rate and a good IP 9 regime which can result in such income being taxed at 5%. 4 Ireland – Ireland is a popular location for holding and IP holding 8 companies, particularly with a wealth of skilled workers in the technology and pharmaceutical sectors. It also has a flexible tax system, low corporate tax rates of 12.5% for active trades, and a good IP regime. 6 22 A guide to business relocation in Europe
  5. 5. 5 Luxembourg – pre-eminent within the finance sector, it is a 8 Spain – not widely recognised as a holding company location but itscommon holding company location and is often used as a strong treaty network with Latin America means that it is a very goodtreasury/financing location. Advance agreements with the tax authorities holding company location to access these markets. Its attractive R&Dare possible whereby Luxembourg only taxes a small spread on credits and IP regime can also result in a low effective tax rate.financing flows. 9 Switzerland – with access to a sophisticated workforce, it is widely6 Malta – a relatively low cost of living combined with a good quality used as an entrepreneurial hub, especially in the food and drink,workforce make this a popular jurisdiction for service companies. If pharmaceutical and financial services sectors. Although expensive, withstructured correctly, corporate tax rates of less than 5% are achievable. a complex tax regime, overall corporate taxes can be low.7 The Netherlands – once widely regarded as the holding location of 10 UK – whilst the complexity of the tax regime is a deterrent for many,choice, its regime is perhaps not as competitive as a decade ago. With US multinationals in particular continue to use the UK as a holdingan excellent treaty network and a flexible tax system, it still remains company structure – this is driven by commercial factors, particularlypopular as a holding company location, and is widely used by service, relative ease of set-up, language factors and communication and logistics groups. A guide to business relocation in Europe 3
  6. 6. These 10 key European jurisdictions are widely used for holding companies and IP holding companies. The choice of location is very much driven bythe commercial requirements of the business. Whilst it can be possible to relocate without a strong commercial driver, the best results are typically wherecommercial needs, tax and legal benefits go hand in hand. The table below summarises principal tax factors for the 10 key European jurisdictions. Belgium Cyprus Hungary Ireland Luxembourg Malta Netherlands Spain Switzerland UKEU member yes yes yes yes yes yes yes yes no yesTax ratesHeadline corporation 33.99% 10% 10-19% 12.5% 28.8% 35% 20-25% 30% 12-25% 24%tax rateIncome taxes up to 50% up to 35% up to 27% up to 41% 40.56% up to 35% up to 52% up to 56% up to 42% up to 50%Standard VAT rate 21% 17% 27% 23% 15% 18% 21% 21% 8% 20%Holding company regimeDividend exemption yes yes yes no – but credit yes yes yes yes yes yes(subject to conditions)Capital gain exemption yes yes yes yes yes yes yes yes yes yes(subject to conditions)CFC rules no no yes no no no no yes no yesOther incentives notional interest profit from – – tax rulings can effective tax rate – no debt:equity effective tax – deduction trading in be negotiated of 0-10% can be restrictions as rate of 7-12% ‘titles’ is to optimise obtained (subject from March 2012 for holding exempt effective tax to exemptions) (but limitation companies rate on interest deduction)Transfer pricing rules yes yes yes limited limited no yes yes yes yesCapital/stamp duty on no yes – only on no – unless yes – only on no – however yes – only on no no yes – on initial yes – onlyshares initial they are transfer of 0.5% annual transfer of shares share issuance on transfer issuance of shares in shares (1%) net wealth tax (2%) unless > (1%) and an of shares shares (0.6%) companies on non- 90% of business annual capital (0.5%) holding qualifying is derived from tax on equity Hungarian assets outside Malta value (0.001%- real estate 0.01%)Number of double tax 90+ 46+ 65+ 65+ 60+ 55+ 110+ 80+ 100+ 120+treaties4 A guide to business relocation in Europe
  7. 7. Belgium Cyprus Hungary Ireland Luxembourg Malta Netherlands Spain Switzerland UK IP regime IP tax rate 6.8% 10% 5-9% 12.5% (2.5% 5.76% 0-10% 5% / 25% 15-30% 9-11% 24% (effective) (2% effective) (5% effective) effective) (effective) (effective) IP regime yes – applies yes – applies yes – applies yes – applies yes – applies yes – applies yes – applies to yes – applies yes – applies yes – applies to patents to most to patents, to most to most to registered IP of a technical to registered to all to all post owned and intangibles patent rights, intangibles registered patents (0%), nature (5%) and intangibles intangibles 2002 developed trademarks intangibles active IP (5%), to goodwill and intangibles by company and copyright passive IP trademarks income (10%) (25%) Capital gains on IP qualifying 80% exemption on capital gain 80% exemption capital gain on capital gain capital gain capital gain capital gain on gains exemption registered IP on disposal on capital gain disposal taxed on disposal of on IP disposal on IP disposal disposal taxed taxed at IP on capital gain held for at taxed at 30% on disposal at 5% qualifying assets at a rate of taxed at at 24% but can rate on disposal least a year but can be effectively 15%-30% 9-25% be deferred of 6.8% deferred taxed at 5% IP amortisation yes yes yes yes yes yes yes yes yes yes deduction Domestic witholding tax (WHT) rates WHT on dividends 25/21% 0% 0/16% 0/ 20% 15% 0% 15% 0% (for 35% 0% 0% for ETVEs) cooperatives WHT on interest 21% 0% 0% 0/20% 0% 0% 0% 21% 0% 20% WHT on royalties 15% 5-10% 0% 0/20% 0% 0% 0% 24.75% 0% 20%General notes: Key:1. Information used in this table was collated in July 2012 WHT = withholding tax2. Withholding tax rates may be reduced when payments made within the EU or under relevant treaties CFC = controlled foreign company3. Further details are included in the relevant key country profiles from page 20 ETVE = Spanish holding company A guide to business relocation in Europe 5
  8. 8. Relocation options Full migration Use of IP holding companies and regionalWhat is business relocation? This type of relocation has been highlighted by hubs some high profile migrations and can be either a Increasing use is being made of IP holdingWhilst most people instantly think of full relocation of headquarters or holding company regimes by many international groups. Suchcorporate migrations for business relocations, or both. A migration of the holding company companies are responsible for the ongoingthere are a number of much simpler options typically involves an inversion, whereby a new development, protection and exploitation of IPwhich can also achieve excellent efficiencies holding company is set up above the existing or development of regional business.and cost savings. group holding structure. However, it can Given the need for IP protection and the Determining the right structure and location sometimes be achieved by migrating the significant income it can generate, groups arefor a business requires assessing numerous management and control of a holding company considering the best place to locate these assetscompeting factors and will be individual to to a different jurisdiction. to maximise protection and minimise taxes.each group, but some common examples are: Whilst the benefits can be significant, for Whilst such assets are physically easy to example, achieving a reduction in the overall relocate, this type of restructuring often has a effective tax rate or moving to a country with a high cost of relocation. simpler tax and legal framework, there can be issues in terms of exit costs and there needs to be a strong appetite for change to make this relocation work.6 A guide to business relocation in Europe
  9. 9. Offshoring Changing the risk modelThere can be significant cost savings through Where it is not appropriate to physicallyoffshoring. In its simplest form offshoring could relocate certain functions, then an alternativebe the relocation of a support function overseas. may be to operate through a commissionaire,Increasingly, this has been extended to more franchising or licence model. Under such anvalue-add functions including research and arrangement, the risks borne by the localdevelopment (R&D) centres and treasury distribution or manufacturing entity may becompanies. For the former, such centres may be substantially reduced. This in turn can limit thelocated where there is a wealth of technical staff profits attributable to these entities, withand favourable R&D tax regimes. increased profits being generated by the entrepreneur company. This involves limited physical disruption to the business. A guide to business relocation in Europe 7
  10. 10. • economic downturn: pressure on businesses • competitive advantage: as more corporateHow can relocation add value? to reduce costs is immense as they continue groups take advantage of the opportunities to respond to the global recession. There arising from relocation, it is important toThere are significant potential benefits to can be significant operational, administrative remain ahead of the game in terms ofrelocating abroad – access to markets, simplified and tax savings arising from centralising maximising value by reducing costs, therebycompliance and tax savings are cited as key functions and relocating them offshore to an keeping a competitive advantagereasons. The popularity of business relocations appropriate location • tax incentivisation: tax is increasingly usedis driven by a series of global economic factors, • increased compliance burdens: other as a lever by various governments to attractcreating ‘a perfect storm’ in business regimes, particularly in the G20 economies, inward investment, resulting in low tax ratesrestructuring: are introducing complex compliance and some very generous tax incentives,• globalisation: the disparity in growth rates systems to control behaviour and particularly around IP management and between emerging markets and mature discourage loss of tax revenue offshore. This other high-value functions. Significant tax economies is accelerating the pace of is creating a huge compliance burden for savings can be obtained by relocating globalisation, as companies seek to access groups and arguably is accelerating the activity and assets into these jurisdictions. capital, goods or markets in different migration of businesses away from those regions of the world. There is also a jurisdictions growing pool of internationally mobile employees willing to relocate for these opportunities8 A guide to business relocation in Europe
  11. 11. What activities can be relocated?A group’s typical supply chain has three key aspects and examples of functions and ways to relocate these are set out below: Functions Examples Ways to relocate Back office • Offshoring Support Customer support support • Treasury companies • Centralisation Research & Manufacturing Business • Changes to risk model development & sales • Research centres of excellence Executive • IP holding companies Value-add IP management decision making • Migration of holding company A guide to business relocation in Europe 9
  12. 12. Support functions Treasury companies: Business functions Offshoring: Treasury companies have widely been used in Centralisation:Relocation of routine functions such as support group structures to manage and pool the cash Typically the location of volume-addingservices is common and is often relatively facilities for the group to maximise the return on functions is driven by commercial factors suchstraightforward. Typically the moves are driven surplus cash and minimise the expense on as the location of suppliers, customers and aby operational savings with and low costs. An overall group debt. Careful consideration skilled workforce. However there may still beexample of this is Malta, a popular offshoring should be given to the preferred location which opportunities to centralise these in a regionallocation. will be driven by commercial factors, but also hub and while such structures will be by the favourable tax treatment on the interest. commercially driven, tax savings can be WHT costs should be understood when significant. choosing a location as these can give rise to significant tax leakage on interest flows if not Change to the risk model: managed properly. Where it is not commercially viable to relocate volume-adding functions, these can be restructured using a different model such as franchising and licencing.10 A guide to business relocation in Europe
  13. 13. When considering the best structure for an R&D centre of excellence, it is important to understand whether the centre will undertake research on its own behalf, effectively owning the associated IP, or whether it will perform contract R&D Such a group restructure could involve a Research centres of excellence: on behalf of the IP owner. This is key tofully-fledged sales company becoming a limited The tax benefits of establishing a global R&D deciding where the IP should be located.risk distributor, transferring key risks (such as centre can be extensive given the various grants With planning, it may be possible for astock obsolescence risks, bad debts and foreign and tax incentives available in different contract R&D company to qualify for R&Dexchange) to another company. Alternatively, it jurisdictions. It is important to ensure these tax credits in one country, and the IP ownercould operate as a sales commission agent, not incentives are taken into consideration when to benefit from a favourable tax rate on theactually entering into sales contracts, rather undertaking cost-benefit analysis on the choice income generated from the IP in a secondreceiving a commission for soliciting sales on of location. jurisdiction.behalf of the principal. This can be an effective way of transferring Low effectiveprofit-generation from the sales or IP holding tax on IP incomemanufacturing entity to the principal with company and gains egminimal physical disruption to the business as Belgium orfew staff need to relocate. Hungary Recharge for services Enhanced R&D R&D expenditure company and/or credits eg Ireland or UK A guide to business relocation in Europe 11
  14. 14. Value-add functions Migration of holding company: Migration has a very significant impact on the IP holding companies: This typically entails setting up a new holding business, with the key decision-makers eitherBy locating the IP and the associated active company above the existing group holding relocating offshore or regularly travelling to themanagement in one company, its value may be company and is known as an inversion. overseas location.maximised. The income generated from such There are a number of reasons why a It can also impact the shareholders as someactivity will be either royalties, or if the IP company may migrate, including: jurisdictions have high WHT rates on paymentholding company is included in the supply • commercial opportunities to re-focus the of dividends to non-resident shareholders. Ifchain, through the mark-up on the pricing of business on a new territory or region, more treaty protection is not available, complexgoods or services. closely aligned with customers, suppliers structures such as dividend access schemes, may The profits attributed to IP can be very and/or workforce be required to manage WHT costs to thesignificant, and there are some very favourable • opportunities to exit from a complex legal/ ultimate shareholders.regimes – for example Ireland allows a tax compliance and reporting regime of the There needs to be an appetite for change atdeduction for amortisation of IP transferred existing country of residence, and adopt a board level and a good commercial reason forfrom group companies, based on the market more straightforward regime in a territory restructures of this nature and an awareness ofvalue (rather than book value). such as Hungary or Malta the potential negative media exposure. • potential to side-step tax anti-avoidance provisions in the previous parent jurisdiction, which can limit flexibility • ability to generate profits in the medium- term in a favourable location.12 A guide to business relocation in Europe
  15. 15. An inversionThe key steps to an inversion are as follows:Existing structure Set up a new overall holding company in a Transfer subsidiary companies under the new favourable jurisdiction by way of share for share holding company exchange by the existing shareholders Holding New holding New holding company company company Overseas Overseas Holding Holding Overseas Overseas company 1 company 2 company company company 1 company 2 Overseas Overseas company 1 company 2 A guide to business relocation in Europe 13
  16. 16. Where is the optimal 2 Holding 3 Technology 4 Shared 5location? company centre Services Commissionaire Processing ServicesThere is no right answer as to Management R&D Services Administration Services Serviceswhere a group should locate its Marketingdifferent functions. It depends on a Servicesmyriad of business factors but theclassic supply chain modelhighlights the options available. Purchases materials Sells goods 1 Central SUPPLIERS CUSTOMERS entrepreneur Processing Distribution & Services Logistics Services Deliver Delivers Legal title materials goods Physical flow 6 Toll 5 Distribution Services Manufacturer Centre14 A guide to business relocation in Europe
  17. 17. 1 The central entrepreneur is the hub of the structure and therefore 4 Shared services are often relocated to overseas jurisdictions. Callits location will be key. As it will often also hold the group’s intangibles, centres for example are usually located in low cost environments withidentifying a good IP tax regime can significantly improve the group’s popular locations in Europe including Malta and Cyprus.effective tax rate. Popular jurisdictions include Ireland and Switzerland – the group can 5 Operations in high tax jurisdictions which cannot be moved – forbenefit from excellent commercial regimes, access to a sophisticated example sales and distribution, which are driven by customer location, canlabour force and with careful structuring, effective tax rates of 12.5% be structured as a commissionaire or a limited risk distributor. This will(Ireland) and 9-11% (Switzerland). limit the risk and therefore the level of profits associated with the function.2 The choice of holding company location is determined by 6 Toll or contract manufacturing is ideally located where there is ashareholder considerations as well as company law. Popular locations low cost base – East European states and increasingly North Africa areare Luxembourg, Switzerland, Belgium, Ireland and increasingly Hungary. widely used.3 A technology centre will be responsible for R&D, and therefore itslocation will be influenced by a generous R&D tax regime in the form ofenhanced tax relief and repayments as well as access to appropriatestaff. France has an excellent R&D regime, as does the UK. A guide to business relocation in Europe 15
  18. 18. What is the impact of relocation? Operational issues substance in them with appropriate levels of Customers, suppliers and markets local management with the relevant expertiseIt is important to understand the potential Depending on the type of business, the to manage the assets. Failure to introduceimpact any relocation has on the operational, location of suppliers and/or customers will be sufficient substance is likely to give rise to taxlegal and tax affairs of the business. These are key to the decision on location. Proximity to concerns as set out further below.generally manageable but careful planning is these key stakeholders is often a critical factornecessary to ensure groups are aware of all the in driving relocations. Peoplecosts of the relocation. Groups must consider how any relocated Substance function will be staffed. This may involve Whenever activity is being relocated, there will relocating staff or recruiting locally. For need to be real ‘substance’ in the chosen existing staff, account must be taken of their location. The exact level of substance depends desire to move, in addition to their ability to on the functions undertaken and the assets and move in terms of work permits (where such the jurisdiction they are to be relocated to. locations are outside of the EU). If existing While this may be obvious for volume-adding staff do not want to move, there will need to be functions such as manufacturing, holding and a suitable workforce available locally. Both IP holding companies will need to have real options will have associated costs.16 A guide to business relocation in Europe
  19. 19. Reputation Legal Issues Contract renegotiationSome businesses are sensitive to market Employment law When moving business operations overseas, itperception. Any restructuring which could It is important to recognise when moving staff may be necessary to renegotiate contracts withresult in headline news in the media of a move to an overseas location, or indeed hiring new current suppliers and customers. Theto a new jurisdiction could detrimentally staff, that the employment laws in different appropriate law governing these contracts willimpact the profitability of those businesses. jurisdictions are unlikely to be the same. Even need to be considered and, where different,While high profile movers have paved the way, within the EU, there can be working hour existing contracts will need to be agreed withwhen reviewing the strategy of the business all restrictions, and employees may have more customers and suppliers.key players in the business, from CEO to rights in one country compared to another. Incorporate affairs need to understand the addition, works councils in certain member Company lawimplications of a move and need to be clear of states can be powerful bodies influencing Company law factors must be taken intotheir stance. business decisions. consideration when setting up a new entity including the different reporting requirements. The full migration of listed entities will give rise to numerous legal and listing requirements. A guide to business relocation in Europe 17
  20. 20. Tax issues As a result, the level of profits which can be If moving within the EU there is also the Residency and CFC rules generated in a territory is typically driven by argument that such charges are discriminatory Many tax authorities levy tax not just on the level of substance in that territory – both in and contrary to EU law and in particular the companies incorporated in the territory in terms of assets held, functions performed, and Freedom of Establishment and Free Movement question, but also where companies are risks borne. Careful supply chain planning is of Capital. managed there. It is therefore important that therefore essential to maximise the benefit companies have an appropriate level of from the chosen structure. Indirect taxes substance and management locally, otherwise Thought needs to be given where any additional tax costs could arise under the tax Exit charges restructuring alters the flow of goods, services residence and CFC rules. As part of any restructuring, the exit charges in or other payments. For example royalty, moving a function or asset out of a jurisdiction interest and dividend flows need to be Transfer pricing need to be included in relocation costs. For modelled to ensure that the resultant structure Increasing numbers of jurisdictions have most countries, there will, prima facie, be a tax is not tax inefficient by virtue of non- introduced transfer pricing rules to ensure that charge on exit. However, with planning it is recoverable WHT. Where there is a physical intra-group pricing (of goods, services, interest often possible to minimise the charge arising movement of goods or services, indirect tax and royalties) is deemed to take place at arm’s on exit or defer such charge. cost leakage (particularly sales taxes and duties) length. The aim is to ensure that profits are not will need to be built into the cost of the artificially diverted to another territory restructuring. through manipulation of prices.18 A guide to business relocation in Europe
  21. 21. Grant Thornton contactsAustria Finland Italy Poland TurkeyWerner Leiter Tanya Lappalainen Alessandro Dragonetti Dariusz Bednarski Beşir AcarT +43 126 262 414 T +358 9 5123 3333 T +39 02 7600 8751 T +48 61 62 51 314 T +90 312 219 1650E E E E E besir.acar@gtturkey.comBelgium France Latvia Portugal United KingdomGeorges Keymeulen Jérôme Bogaert Kristīne Vanaga-Mihailova Joaquim Mendes Nick FarrT +32 02 469 01 00 T +33 (0)1 56 21 03 03 T +371 6721 7569 T +351 21 413 46 30 T +44 (0)20 7728 2691E E E E E Germany Lithuania RussiaGeorge Karavis Paul Forst Arūnas Šidlauskas Alexander SidorenkoT +357 22600000 T +49 211 95 24 121 T +370 5 212 7856 T +7 495 258 99 90E E E E Republic Greece Luxembourg SpainGabriela Magsumová Sotiris Gioussios Jean-Michel Hamelle Albert GiraltT +42 0296 15 2255 T +30 2 10 72 80 501 T +352 24 69 94 T +34 93 206 39 00E E E E Hungary Malta SwedenJorgen Nielsen Ilona Szarka Austin Demajo Monica SöderlundT +45 33 454 212 T +36 1455 2000 T +356 21 320 134 T +46 8 563 070 74E E E E Ireland The Netherlands SwitzerlandKristjan Järve Frank Walsh Jacob Mook Reto WittwerT +372 626 4500 T +353 (0)1 6805 607 T +31 (0)182 53 19 22 T +41 43 960 71 04E E E E A guide to business relocation in Europe 19
  22. 22. Key country profilesThis section provides an overview ofthe commercial and legal benefits ofthe jurisdiction, the holdingcompany and IP holding regimes, aswell as expatriate costs and planningopportunities for the 10 key holdingcompany locations.20 A guide to business relocation in Europe
  23. 23. BelgiumBelgium key facts Belgium is recognised as a holding company Belgium is regarded as having a highInvestment climate location primarily due to commercial reasons. Its standard of living and, while it is expensive, it is• local currency Euro (€) high headline corporate tax rate does not lend not as expensive as some of its EU neighbours• stable economic and political environment itself easily to a favourable holding company relative to the standard of living.• skilled and semi skilled workforce, including location, although a participation exemption in Belgium does have a very favourable IP technical and professional personnel terms of dividends and capital gains and the regime, especially for patent income which is• rather strict labour laws. absence of any CFC rules offers enough tax taxed at a rate of 6.8% and can often be lower incentives for groups to headquarter here. depending on the level of deductions available.Quality of living It is one of the best locations for industry• good infrastructure especially transport and logistics as a prominent gateway to the• high standard of education including European market. A large part of Belgium’s international schooling available for expatriate success in international trade is due to its families excellent infrastructure which allows it to• excellent healthcare. leverage off its strategic location. Trade in intermediate goods, destined for final production in other countries, accounts for nearly 45% of gross domestic product. Belgium’s main industries include food, automotive, pharmaceuticals and logistics. A guide to business relocation in Europe 21
  24. 24. Holding company Anti avoidance legislationCorporate taxation Belgium has transfer pricing rules (based onThe effective headline rate of corporate tax in OECD principles) which require related party Belgium’s location andBelgium is 33.99%, one of the highest in the EU. transactions to be conducted at arm’s length. excellent IP regime result in it being an Notional interest deduction rules give In addition, there are interest deductibility attractive location for holding companies, including (bio)pharmaceuticalcompanies a deduction against profits for the restrictions on interest payable to ‘low tax’ and high tech groups.cost of equity (for tax year 2013 this is 3% of jurisdictions (ie <15% effective tax rate) andequity; 3.5% for smaller entities). It is therefore on intra-group loans to the extent that the totalpossible to benefit from significantly reduced amount of these intra-group loans exceedscorporate tax rates, with some relatively simple five times the net equity of the company.structuring. Belgium does not have any CFC (or equivalent) Examples include GlaxoSmithKline Biologicals, legislation. However, the availability of the ThromboGenics, UCB, GodivaStamp taxes and other capital duties capital gain exemption may be restricted if the Chocolatier and Anheuser-Busch InBev (Becks and Stella).There is no capital duty or stamp duty investee company is in a ‘low tax’ jurisdictionapplicable in Belgium. (as detailed above). It is possible for companies to obtainExemption from Belgian corporate tax advanced rulings from the tax authorities onA 95% dividend exemption is generally available the treatment of complex tax matters. Theseon dividends from shareholdings of at least 10% are not compulsory.(or €2.5 million) where they have been held (orare intended to be held) for at least one year. Capital gains on the disposal of shares areexempt (if shares were held for an uninterruptedperiod of one year) provided that the investeecompany is not resident in a country with aconsiderably more favourable tax regime thanBelgium (in practise this is taken as an effectivetax rate of less than 15%).22 A guide to business relocation in Europe
  25. 25. Withholding taxes (WHT) VAT IP rulesThe domestic rate of WHT applied on The standard rate of VAT is 21%. A reduced The IP regime includes patents that are owneddividends is 21% (as of 1 January 2012) when rate of 12% applies for medicines, margarine, and that have been fully or partly developed bycertain conditions are met. There is no WHT on tubes, TV cable or social housing, whilst a the company.dividends paid to residents of EU countries reduced rate of 6% is available for all types of Under the regime, there is an 80% patent(where holding requirements are met) or renovation work as well as basic necessities such income deduction on qualifying gross patentcountries with which Belgium has a double tax as food, non-alcoholic beverages, transport and income resulting in an effective tax rate of 6.8%agreement (for shareholdings of at least 10% or pharmaceuticals. Some goods are exempt from before other deductions. In addition,€2.5 million) and there are significantly reduced VAT including newspapers and magazines. amortisation is deductible over the usefulrates in many of the double tax agreements. economic life and this deduction, coupled with The domestic rate of WHT applied on Double tax agreements the notional interest deduction, can result in aninterest to non residents is 21%. An exemption Belgium has more than 90 agreements in effect. effective tax rate of available for interest payable to beneficiaries Income and gains on IP outside the regimeof EU countries (where holding requirements Foreign shareholders (including acquired patents and knowhow andare met) and reduced rates of WHT apply on There is no Belgian tax payable by foreign brands) are subject to tax at the normal headlineinterest to beneficiaries of most treaty countries. shareholders on the disposal of shares in a rate of tax of 33.99%. The domestic rate of WHT applied on Belgian company.royalty payments to non residents is 15%. As R&D ruleswith dividends and interest, an exemption is IP regime Tax incentives are available for R&D relatedavailable for payments to EU countries (where Legal activity in the form of either an enhancedholding requirements are met) and reduced rates Belgium offers a high level of legal protection investment deduction of 15.5% (for tax yearof WHT apply on royalties to most treaty and recognition, broadly following EU law, for 2013) on environmental investments forcountries. patents, trademarks, copyrights and industrial research and development, or a tax credit of design and models. 15.5% of the value of qualifying expenditure (for tax year 2013). It is also possible for companies to retain 75% of researchers payroll tax in respect of qualifying activities. A guide to business relocation in Europe 23
  26. 26. Expatriate issues Corporate set upIncome tax CostIndividuals are taxed on all remuneration Company set up costs start at around €3,000 Locating some operational(including benefits in kind) for duties performed and take around one month. activity in a Belgium holding companyin Belgium, on a progressive scale of income tax can significantly reduce the group’s effectivebetween 25% and 50% depending on level of Corporate entity tax rate, as interest costs and also a notionalincome. Local taxes are also payable. The most common type of corporate entity is interest deduction is available and dividends There are relatively generous deductions an NV/SA but an often used alternative is the received are 95% exempt.available including child care, mortgage less formal BVBA/SPRL.payments and related insurance premiums. The minimum share capital for these entitiesTax credits are also available for pension are currently €61,500 (NV/SA) and €18,600contributions and life insurance premiums. (BVBA/SPRL). For an NV/SA there is a requirementSocial security contributions for at least two shareholders and at leastEmployee social security contributions are three directors although there are nopayable at 13.07%. These are deductible for specific residence requirements (the directorincome tax purposes. requirement is reduced to two if there are only two shareholders).Expatriate rulesExpatriates are subject to Belgian tax on theportion of income attributable to working inBelgium. In addition, they can receive tax freepayments to cover expenses such as housing,cost of living, relocation expenses, settlingexpenses, tax equalisation and a schoolingallowance.24 A guide to business relocation in Europe
  27. 27. CyprusCyprus key facts Cyprus’ location lends itself well to international The quality of life in Cyprus is very goodInvestment climate trade, as it is central to three different continents and the cost of living is low compared with• local currency Euro (€) and close to trade routes between Europe and many Western European countries.• robust legal system with strong English Law Asia. Good transport links (sea and air) and an Cyprus has new legislation which provides influence excellent telecommunications system further certain tax incentives with regards to IP.• highly qualified and multilingual labour force. compliments the potential for international trade. It also has the lowest headline rate ofQuality of living corporation tax in the EU at 10%. Its generous• relaxed pace of life exemptions can sometimes result in a nil effective• great weather tax rate making it a very attractive jurisdiction• good telecommunications infrastructure for holding companies from a tax perspective.• high standard of education Cyprus is very widely used for investment• low crime, unemployment and homelessness. into Russia and Eastern Europe due to the favourable treaty provisions. The services sector accounts for three quarters of the country’s GDP with the main sectors being tourism, transport and communications, real estate and banking. A guide to business relocation in Europe 25
  28. 28. Holding company Exemption from Cypriot corporation taxCorporate taxation A full dividend exemption is available providedThe standard rate of corporation tax in Cyprus that the company paying the dividend does notis 10%, although certain passive income (ie derive more than 50% of its income from Cyprus is widely used for investmentinterest) is subject to the special defence investment activities or it is not subject to tax at into Russia and Eastern Europe owing to very favourable treaty provisions.contribution at a rate of 15%. a significantly lower rate than in Cyprus (in No tax deduction is available on the interest practice this is interpreted as a tax rate of lesscosts of financing subsidiaries unless the than 5%). If the exemption does not apply, thecompany is treated as a finance vehicle within dividends are subject to the special defencethe group. contribution, at a rate of 20% (from 1 January 2012 for two years).Stamp taxes and other capital duties Capital gains arising on the disposal ofCapital duty of €103 plus 0.6% on the nominal shares are only taxable if the company holdsamount of the authorised share capital exists. immovable property that is situated in CyprusSubsequent increases of the authorised share (at a rate of 20%).capital are subject to a capital duty of 0.6%26 A guide to business relocation in Europe
  29. 29. Anti avoidance legislation Withholding taxes (WHT) IP regimeCyprus does not have detailed transfer pricing Cyprus does not impose WHT on interest or Legalrules, although transactions between connected dividends payable to non residents. Cyprus offers legal protection and recognition,parties should be on an arm’s length basis. The domestic rate of WHT on royalty broadly based on EU law, for patents, Cyprus does not have any CFC (or payments to non residents for the use of intellectual property and trademarks.equivalent) legislation. However, the availability royalties in Cyprus is 10% (other than filmof the dividend exemption may be restricted if royalties on which a 5% WHT applies). An IP rulesthe paying company is in a lower tax regime (ie exemption is available for royalties payable to IP amortisation is tax deductible over five years.less than 5% tax rate) or if the foreign company EU countries (where certain requirements are 80% of any income generated from thepaying the dividend relates to more than 50% to met) and reduced rates of WHT apply on exploitation of the IP is exempt from taxation.investing activities. royalties to certain treaty countries. 80% of any profit generated from the disposal It is possible for companies to obtain of IP is exempt from taxation.advanced rulings from the Cypriot tax Double tax agreementsauthorities on the treatment of complex tax Cyprus has more than 46 agreements in effect, R&D rulesissues. These can usually be obtained in less although it does provide a credit system for Although there is no specific R&D tax regime athan three weeks, but are not compulsory. foreign tax suffered even where no treaty is in tax deduction is available for revenue scientific place. expenditure and capital expenditure may beVAT amortised over six years.The standard rate of VAT in Cyprus is 17%. Foreign shareholdersA reduced rate of 8% is applied to transport, There is no Cypriot tax for foreign shareholdersaccommodation and restaurants, while a 5% on the disposal of shares in a Cypriot company.rate applies to pharmaceuticals, bottled non-alcoholic drinks, sweets and entry fees tocultural events. A guide to business relocation in Europe 27
  30. 30. Expatriate issues Corporate set upIncome tax CostIndividuals are taxed on all remuneration Company set up costs start at around €2,500 Cyprus has one of the lowest(including benefits in kind) for duties performed and can take up to two weeks. corporate tax rate in the EU and its taxin Cyprus, on a progressive scale from 0% to regime is relatively simple. There are new IP35%. Corporate entity rules that make it attractive for both holding and IP holding companies. Various personal expenses are allowed as a The most common type of corporate entity is adeduction for tax purposes including life private limited liability company, for whichinsurance premiums, social insurance there is no minimum share capital requirements.contributions, approved provident fund A Cypriot company can be established withcontributions, approved medical scheme only one shareholder and one director but acontributions, professional subscriptions and company secretary, who is not a sole director,approved charitable donations. must also be appointed.Social security contributionsEmployee social security contributions arepayable at 6.8%.Expatriate rulesExpatriates are entitled to an income taxexemption for the lower of 20% of emolumentsand €8,550 per annum for the first three yearsof employment in Cyprus. Expatriates earningover €100,000 per annum are entitled to a 50%exemption for a period of up to five years(applicable from 2012.)28 A guide to business relocation in Europe
  31. 31. HungaryHungary key facts Hungary is recognised as a holding company The private sector accounts for more thanInvestment climate location primarily due to its relatively low wage 80% of Hungary’s GDP and foreign ownership• local currency HUF (Hungarian Forint) cost and attractive tax regime. Its low headline in Hungarian films is widespread.• EU member corporate tax rate of 10/19% lends itself easily Hungary has a relatively low cost of living• high percentage of skilled/semi-skilled labour, to a favourable holding company location, as and one of the biggest constraints in growth is including technical personnel. does a low income tax rate, a participation its economic climate, having turned to the EU exemption in terms of dividends, and an for support loans on a number of occasions,Quality of living attractive IP regime, where capital gains on IP although this has significantly improved over• excellent civil liberties are exempt and income taxed at 5%/9.5%. the last few years.• very clean living As a land-locked state bordering a number• relatively low cost of living. of Eastern European countries, including Romania, Ukraine, Slovakia, Croatia and Serbia it is well located to access these countries. Hungary has some natural resources and the arable land is widely used for viticulture, producing wine that is enjoyed globally. It is also a significant exporter, with its main manufactured exports including electric and electronic equipment, foodstuffs and chemicals. A guide to business relocation in Europe 29
  32. 32. Holding company Anti avoidance legislationCorporate taxation Hungary has transfer pricing rules whichThe effective headline rate of corporate tax in require related party transactions to beHungary is 19% where taxable profits exceed conducted at arm’s length. All related party Hungary’s low corporate tax rate andHUF 500 million (€1.7million), otherwise taxed transactions over HUF 50 million (€170,000) favourable IP regime makes it an attractive location for holding 10%. must be documented for transfer pricing purposes and advance pricing agreements areStamp taxes and other capital duties available.There is no capital duty or stamp duty In addition, there are thin capitalisationapplicable on the transfer of shares in Hungary rules and where the debt:equity ratio exceedsunless the shares being sold hold Hungarian 1:3 the interest exceeding this ratio will bereal estate. disallowed. Hungary has CFC legislation, and a foreignExemption from Hungarian corporation tax company is considered to be a CFC if there is a VATA full dividend exemption is available on Hungarian individual holding shares for the The standard rate of VAT is 27%. A reduceddividends received by a Hungarian company majority of the days in a tax year or the majority rate of 5% applies to medicine, aides for blindunless received from a CFC. of the foreign company’s income derives from people and books, newspapers and music scores, Capital gains on the disposal of shares are Hungary and it is taxed at a rate less than 10%. supply of live music in restaurants and supply ofexempt (if at least 30% of shares are held for Foreign companies incorporated in the EU or in heating services. A reduced rate of 18% appliesan uninterrupted period of one year and the an OECD or treaty country are not considered to some basic foods, accomodation and outdooracquisition of shares is notified to the to be a CFC if they have real economic presence concerts.Hungarian tax authorities) provided that the in that country.investee company is not considered to be a It is possible for companies to obtainCFC (see below). advanced rulings from the tax authorities on the treatment of complex tax matters. These are not compulsory but are binding.30 A guide to business relocation in Europe
  33. 33. Withholding taxes (WHT) Double tax agreements IP rulesThere is no WHT on dividends paid to Hungary has more than 65 agreements in effect. The IP regime includes patents, patent rights,corporates, although dividends to individuals trade marks and copyrights.are subject to 16% WHT. This may be reduced Foreign shareholders Under the regime, 50% of the royaltywhere paid to individuals resident in countries There is no Hungarian tax payable by foreign income relating to qualifying IP assets isthat have a double tax agreement with Hungary. shareholders on the disposal of shares in a deductible from the tax base resulting in an There is no WHT on interest paid to Hungarian company. There is a 19% capital gain effective tax rate of 5% for profits less thancorporates, although interest paid to individuals tax on the sale of shares in Hungarian real estate HUF 500 million (€1.7million) and 9.5%are subject to WHT at 16%. Reduced rates of companies if the foreign shareholder is resident thereafter. The deduction cannot exceed 50% ofWHT apply on interest paid to individual in a non-treaty country or the treaty gives the accounting profit. In addition, amortisationresidents of most treaty countries. taxing rights to Hungary. is deductible over the useful economic life, There is no WHT applied on royalty resulting in a low effective tax rate.payments to corporates, although royalties to IP regime From 2012, there is an exemption fromindividuals are subject to WHT at a rate of 16%. Legal capital gains on the disposal, on notified IP.Reduced rates of WHT apply on royalties to Hungary offers a good level of legal protection This is where IP has been held for at least oneindividual residents of most treaty countries. and recognition, broadly following EU law, for year and the tax authorities were notified of the patents, trademarks, copyrights and industrial acquisition within 60 days of obtaining the IP. design and models. R&D rules There are no specific R&D tax incentives. A guide to business relocation in Europe 31
  34. 34. Expatriate issues Corporate set upIncome tax CostIndividuals are taxed on all remuneration Company set up costs start at around HUF Whilst Hungary does not have a specific(including benefits in kind) for duties performed 500,000 (€1,730) and take around one month. R&D tax regime, its low effective rate inat a rate of 16%. For income exceeding HUF respect of IP of 5%/9.5% means that it is2.4 million (€8,000) there is a tax base Corporate entity often considered for a group IP company.supplement which results in an effective rate of The most common type of corporate entity is a20.32%. Kft, a limited liability company but other alternatives are a Zrt, private company limitedSocial security contributions by shares, and a Nyrt, a public company limitedEmployers’ social security contributions are by shares.payable at 27%. Employees pay 8.5% health The minimum share capital for a Kft isand unemployment contribution and 10% currently HUF 500,000 (€1,730).pension contribution capped at c. €27,500 There are no requirements or limits on the(HUF 7.9 million). number of shareholders or local management.Expatriate rulesExpatriates are subject to Hungarian tax on theportion of income attributable to working inHungary.32 A guide to business relocation in Europe
  35. 35. IrelandIreland key facts As a member of the EU, with a young and highly One of the key draws as an IP holdingInvestment climate educated workforce, Ireland has a wider draw as a company location is the potential effective rate of• local currency Euro (€) holding company location than just its tax regime. tax on IP related income of 2.5% (after deduction• relatively stable political environment Ireland’s low tax rate, dividend exemption, of tax depreciation) – which is one of the lowest• respected regulatory regime. limited transfer pricing and lack of CFC rules in Europe. Ireland’s R&D tax regime works well means that it is an attractive holding company for groups moving to Ireland and also offersQuality of living location. In addition, there have been a number advantages for groups already located in Ireland.• advanced IT and telecommunications of high profile companies relocate their infrastructure headquarters to Ireland in the past few years.• improvements being made to transport Key sectors in which Ireland has built up a infrastructure concentration of expertise are manufacturing,• high standard of education pharmaceuticals, medical devices, technology,• english speaking with access to multilingual software and financial services. skills Ireland is very attractive for groups looking• large population of foreign nationals. for tax efficient financing structures, such as interest free loans via intermediary locations including Luxembourg or the Netherlands. The cost of living in Ireland was relatively high in the past but has reduced over the last few years with recent incentives for foreign executives. A guide to business relocation in Europe 33
  36. 36. Holding company Anti avoidance legislationCorporate taxation Ireland has recently introduced limited transferThe standard rate of corporation tax in Ireland pricing rules which require related party trading Ireland is an attractiveis 12.5% for trading activities, including transactions to be conducted on an arm’s length holding company jurisdiction. Tax ondividends from trading companies. Passive basis. Interest on connected party loans is IP related income can be as low as 2.5%, and its R&D tax regime works well for groupsincome such as interest, rents and royalty outside these rules. There is also an exemption moving to Ireland.income (where it is not regarded as being for small and medium sized income) is taxable at 25%. Ireland does not have any CFC (or equivalent) legislation.Stamp taxes and other capital duties It is possible for companies to obtainThere is no stamp duty on the issuance of shares. advance opinions from the Irish tax authorities Ireland is favoured by high tech, pharmaceutical andHowever, there is stamp duty of 1% on the on the treatment of certain tax matters. They are manufacturing companies. Examplestransfer of shares but group relief is available. not compulsory and can be relatively cheap to include Apple, Oral B, Dell, Microsoft and Hewlett Packard. obtain.Exemptions from Irish corporate taxWhilst there is no dividend exemption, the VATcredit system operating in Ireland means that The standard rate of VAT is 23%. A reduceddividends received from a jurisdiction with a rate of 13.5% applies to fuel for power andhigher rate of corporate tax than is applied in heating, electricity and gas and a 9% rate appliesIreland are effectively exempt. Any unrelieved to hotel accomodation, hotel and restaurantforeign tax credits can be used to credit other meals, newspapers, admissions to cinemas andforeign dividends received. certain live theatrical and musical performances. Capital gains arising on the disposal ofshares in EU or relevant treaty countrycompanies are exempt where those sharesrepresent at least 5% of the shares in a tradingcompany and have been held for a period of12 months out of the previous two years.34 A guide to business relocation in Europe
  37. 37. Withholding taxes (WHT) IP regime Income arising from qualifying IP canThe domestic rate of WHT applied on Legal be offset by the amortisation or the electeddividends is 20%, although there is no WHT Ireland has a robust legal framework, based allowance (as above) and also finance costs ofapplied on dividends to EU or treaty countries. on EU legislation, for the protection of IP acquiring that IP. The deduction for interest and The domestic rate of WHT on annual including patents, copyrights, trademarks, amortisation is capped at a maximum of 80% ofinterest payable is 20%. An exemption is computer software and industrial designs and the trading income derived from that IP. Thisgenerally available on interest payable to EU models. can result in an effective tax rate of 2.5%.or treaty countries subject to certain conditions Capital gains arising on the disposal of IPbeing met. IP rules are subject to tax at the standard rate of 30% The domestic rate of WHT on patent The IP regime includes most intangible assets but deferral options may be available.royalty payments is 20%. An exemption is (including software and goodwill). To qualifygenerally available on patent royalties payable these assets must be used in active trade. R&D rulesto EU or treaty countries subject to certain Under the regime, IP amortisation is tax A 25% tax credit is available on qualifyingconditions being met. Patent royalty payments deductible in line with the accounting treatment. R&D expenditure (both capital and revenue) into non treaty countries can also be made free of Alternatively, an election can be made to spread addition to a deduction for the revenue expense.WHT, subject to certain conditions being met. the expenditure over a 15 year period in the The credit can be reclaimed as a cash refund, form of an allowance. Amortisation is based on although this is capped at the higher of payrollDouble tax agreements the market value of the asset, even when it is taxes paid in the year or corporation tax paid inIreland has more than 65 agreements in effect. acquired from a connected party. the last 10 years.Foreign shareholdersThere is no Irish tax payable for foreignshareholders on the disposal of shares in an Irishcompany unless the shares derive their valuefrom specified assets such as Irish land andminerals. A guide to business relocation in Europe 35
  38. 38. Expatriate issues Corporate set upIncome tax CostIndividuals are taxed on all remuneration Company set up costs start at circa €800 and Top planning tip: By transfering(including benefits in kind) for duties performed can take up to 10 days. existing group IP to an Irish companyin Ireland, on a two tier system of income tax the allowances on the IP in Ireland arerates starting at 20% up to €32,800 and 41% on Corporate entity calculated on the market value at the timeincome exceeding €32,800. The most common type of company is a limited of acquisition (even if transferred company, for which there are no minimum from a connected party).Social security contributions share capital requirements.Employee social security contributions are An Irish limited company can have apayable up to 4%. A universal social charge is minimum of one shareholder, although at leastalso payable on gross income from all sources. two directors (one being EEA resident) and aThe rates are 2% on the first €10,036, 4% on company secretary are required.the next €5,980 and 7% thereafter. A rate of10% applies to individuals who have incomefrom self employment income that exceeds€100,000 a year.Expatriate rulesTax free subsistence payments are possible forsecondments in certain circumstances and thereare incentives for high paid expatriates.36 A guide to business relocation in Europe
  39. 39. LuxembourgLuxembourg key facts Luxembourg has long since been a favoured Companies based in Luxembourg also haveInvestment climate holding company location. A member of the access to a highly qualified workforce, not just• local currency Euro (€) EU, it is a neutral country, which is very stable Luxembourgers, but those from France, Germany• stable economy politically and with a very high quality of living for and Belgium, as commuting is widespread.• very stable political environment with a pro- a reasonable cost. Luxembourg is renowned as a Luxembourg is known for financial and business government safe country, encouraging high calibre expatriates. logistics/transport companies, although more• access to a pool of highly skilled, Luxembourg’s government understands the recently it has attracted a number of high hardworking, multilingual employees. need for a close working relationship with technology companies. businesses and the resilient stable tax regimeQuality of living offers groups certainty about the tax system.• neutral country considered one of the safest Despite its high headline tax rate (ie 28.8% in Europe for businesses established in Luxembourg City• low crime in 2012), there are a number of deductions• very good infrastructure which can significantly reduce the effective tax• high standard of education. rate. In addition, its dividend exemption, exemption for capital gains and nil WHT on interest and royalties, together with its flexible company law which allows partial liquidations, mean that there are tax benefits of locating here. A guide to business relocation in Europe 37