Category: Business Support

Located in Eastern Europe, Bulgaria is offering the key managers of global US and European companies a great base for the outsourcing of their businesses. Once concentrated in countries like India and also having China and Vietnam in their shortlist, today the European and the North American companies are looking towards a country which has less social and cultural differences. Bulgaria is such a country for them – it has stable economy, a well-developed educational system forming specialists in computer sciences, electronics and engineering, physics and mathematics, etc. The excellent education has placed Bulgaria into the fifth place in the world when it goes to sciences which make it today a tempting zone for outsourcing of businesses because of the high mental potential of the young specialists. An interesting fact to mention is that Bulgaria ranks second in the IQ tests made by MENSA and the SAT test results. In the IT sphere, the country is among the top ten destinations when it goes to certified IT professionals.

Which are the global companies that have already outsourced their business in Bulgaria? Several major companies have established their branches in the Bulgarian capital Sofia in the last few years. Among these outsourcing pioneers are the German software company SAP, which has focused some of its major Java software development in Sofia. Another giant company that has outsourced part of its business activities is IBM, which was soon followed by HP, Oracle, Cisco Systems, Ericsson, Siemens, etc. and many more companies which joined the group after Bulgaria entered the European Union in January 2007.

One of the main questions that the outsourcing companies often face is connected to the potential of the Bulgarian professionals and their ability to develop and further educate themselves. These young people have several main qualities – they speak good English, they are technically aware and they know how to program well. The Bulgarian programmers have proven their ability to understand and work perfectly with the software code and to observe the deadlines of the different projects. This turns Bulgaria and its capital Sofia into a tempting offshore destination, which has potential and all the preconditions for remaining such country for a very long time.

LowTax.net

The Nordic countries – consisting of Denmark, Finland, Iceland, Norway and Sweden, and the associated territories the Faroe Islands, Greenland and Åland – on September 11 signed tax information exchange agreements (TIEAs) with Aruba and the Netherlands Antilles. The new agreements are 'part of a campaign led by the Nordic Council of Ministers to encourage greater efforts to prevent international tax evasion', according to Norden.

Norden states that 'the TIEAs will provide the tax authorities with access to all information about citizens who try to avoid paying tax on income and capital investments and who have undeclared assets in their home countries. The information covered includes details of the real ownership of companies, i.e. throughout the entire ownership chain, details of the founders, trustees and beneficiaries of trusts, and information held by banks and financial institutions'.

The TIEAs were signed at ceremonies at the Danish (Aruba) and Finnish (Netherlands Antilles) embassies in Paris. Similar deals have already been struck with the Isle of Man, Jersey and Guernsey, the Cayman Islands, Bermuda, and the British Virgin Islands.

Denmark has recently signed agreements with Anguilla, Antigua and Barbuda, Gibraltar, St Kitts and Nevis, St Vincent and the Grenadines, and the Turks and Caicos Islands. Other Nordic countries are scheduled to sign agreements with these states soon. The Faroe Islands also signed a treaty with San Marino on September 11. Negotiations continue with many other states.

The agreements mean that both Aruba and the Netherlands Antilles have satisfied the 12 TIEA quota defined at the G20 summit on April 2, placing them on the OECD’s white list of territories that have substantially implemented the agreement standard. Aruba, to date, has signed 12 agreements, whilst Netherlands Antilles has now concluded 15 agreements.

Bloomberg, April 28th 2009, Commentary by Matthew Lynn.

London’s status as a global financial hub has taken a beating in the past year. The British have nationalized half the country’s banking system. The non- domicile tax system that allowed foreigners to shelter much of their wealth from the authorities has been hit by hefty charges. And tough new rules on pay are being proposed. And now? The top rate of income tax has just been increased to 50 percent from 40 percent. The phrase “last straw” doesn’t even begin to capture how many of London’s bankers, private-equity partners and hedge-fund managers will be feeling. They may have put up with drizzly weather, creaky transport systems and a national mood that makes financiers about as popular as Bernard Madoff at a retirees’ wealth-management convention. Yet it is hard to see how a city can remain as a finance center when it has the fourth-highest tax rate in the developed world. Only Denmark, Sweden and the Netherlands have a higher top rate, according to accounting firm KPMG LLP. Bear in mind that London draws in talent from around the world. It is inconceivable that lots of clever young people primarily interested in making money are going to move to one of the highest tax regimes in the world. Bankers will be checking their atlases more than ever. As it happens, they won’t be short of choices. Europe has lots of places that could host a financial hub: some old, some new. Geneva, Monaco, Bulgaria or Macedonia, to name just a few. All of them have a better shot than London in the next 20 years of building a friendly environment for Europe’s bankers. They don’t even need to be established. Forty years ago, Hong Kong was little more than an island in the South China Sea. Twenty years ago, Dubai was just a strip of sand with a port attached. If the demand is there, the infrastructure will follow. Here’s a rough guide, based on the following criteria: — Low taxes; — Decent infrastructure; — Reasonable divorce laws (no point in sheltering your bonus from the taxman only to see it clobbered by your spouse); — Lots of good-looking women, or men; — An airport, schools and a good golf club; — Low risk of anti-banker backlash next time the financial system implodes. Monaco: Always a safe choice. You can’t beat the principality for taxes — there aren’t any on personal income. The place is crowded and expensive, though. The women are too busy tanning themselves to pay any attention to you, and anyway, if you aren’t a Russian billionaire, you can forget it. Yachts are mandatory. As for the backlash risk, you are dangerously close to France, and the people there keep railing against tax havens. They might one day choose to do something about the small one carved out of their own country. Geneva: There’s a reason that banks have been setting themselves up on the shores of Lake Geneva for hundreds of years: There is nowhere safer for the wealthy. The taxes can be low, but they are also complicated: The Swiss top rate is actually 40 percent, but can be a lot less if you aren’t Swiss. The quality of life is good, but expensive: The “recessionista” look hasn’t made it to Geneva yet and probably never will. And there is zero chance of a backlash against bankers: The Swiss won’t rely on the chocolate industry to keep their economy afloat. Bulgaria: Things have changed a bit since Todor Zhivkov led the People’s Republic of Bulgaria as one of the most loyal of the Soviet satellite states. Now with a top tax rate of just 10 percent, the country has one of the most pro-business fiscal regimes anywhere in the world. Since 2007, it has been a member of the European Union, so you shouldn’t need to worry too much about political stability. There is plenty of Black Sea coastline to work on your tan, even if it can’t quite match the Hamptons for sophistication. There are 127 airports with paved runways, according to the CIA World Factbook, so you should be able to park your jet. Yet it’s only two decades since Bulgaria was a hard-line Marxist state, so don’t count on surviving if there’s another revolution. Macedonia: A small landlocked country that was once part of communist Yugoslavia, Macedonia is probably not the first place you would think of relocating your hedge fund. It’s not a member of the EU yet, it has a slight tendency toward civil war, and it gets involved in lengthy disputes with the Greeks, so you might be at risk during a financial meltdown. There are only 10 airports with paved runways, according to the CIA Factbook, so maybe trade in the jet for a chopper. Gross domestic product per capita is only $9,000, so your support staff will be cheap, and the top tax rate is just 10 percent. Plus you can always slip away to a Greek island for the weekend. Then there are always old-style havens such as Andorra, Jersey or the Isle of Man for those wishing to relocate. Who knows, maybe in a few years, all London’s finance moguls will be sunning themselves by the Black Sea or Lake Geneva and reading about yet another attack from the U.K. prime minister or the French president on tax refugees. Once all the banks have moved away, perhaps it will become clear to governments that taxes are causing new businesses and talent to go elsewhere.