I spoke with a colleague the other day whose business client owned a multi-national concern with warehouses, manufacturing plants and call centers throughout the world. During our discussion, my colleague told me that his client had located an operations unit in a small European country.
We discussed the possible reason for this particular location. Sure the location was a tax-friendly jurisdiction, but there are many other locations outside of Europe that are also tax friendly, and furthermore would cost much less to operate in. We both speculated that for any number of reasons, the businessperson needed access to Europe, whether for purposes of physical proximity or for purposes of political/business/economic access that a European location gave the business.
The decision of where to locate a business center is multi-faceted, and I don’t pretend to know this businessperson’s business situation, or what country might best suit his overall needs. But I would suggest (and in fact did suggest to my colleague) that this businessperson might consider what additional benefits a business location could provide to an entrepreneur by granting residency or citizenship.
In Cyprus, for example, an investment of €5 million into a Cypriot company could qualify an entrepreneur for citizenship in that country, together with all of the E.U. related benefits that such a citizenship could provide.
A number of nations will provide economic citizenship to applicants if the applicants are willing to invest in the country and create jobs. If an entrepreneur is looking to locate a business center overseas, he might do well to consider not just the tax ramifications, but what potential citizenship and/or residency benefits he may gain if he locates or creates a business in certain countries such as, in this instance, Cyprus. What better benefit could there be to obtain something valuable (an E.U. citizenship, in this case) for taking an action the entrepreneur already intends to take anyway (setting up and investing a considerable amount of money in a business).