The world’s growth momentum shall increase as per IMF. However, to leverage its advantages, it is better to set up your IT Company in a tax haven like Georgia.
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The International Monetary Fund (IMF) has forecasted a positive global
growth outlook for the year 2018 to 3.9 percent, marginally better than the
upward swing witnessed in 2017 of 3.7%. This is mainly in consonance with
the expected recovery of the world economy after the recession witnessed
during the latter part of the last decade and its continuation thereafter.
The positive growth forecast has been fuelled by the recent U.S tax rate cuts
from 35% to 21% and a marginally better performance posted by some of the
important world economies like China, Europe, India, Russia, Japan and
others. However, does this mean good news for your IT business?
Notwithstanding the positive sentiments expressed by the IMF and other
agencies like the World Bank, some imponderables have the potential to halt
the growth momentum at best or turn the cycle back at worst. These relate to
the rise in crude prices, the ongoing crisis in the Middle East and the firming
up of inflation. The latter can act as a dampener for businesses like that of
yours as input costs and tax rates would increase.
How higher input costs impact your IT business?
Due to a possible firming up of inflation in major economies as a result of an
increase in crude oil prices, governments will be forced to undertake
unpopular measures to shore up revenues like increasing taxes and borrowing
costs. These will have adverse fallout on your input costs related to the buying
or leasing of computers, software, office space, hiring manpower and logistics,
Is expanding into other markets or territories a way out?
Diversifying your portfolio and expanding your business to other markets are
always good news but at the same time are fraught with risks as well. The
risks could be in the form of increased competition, a backlash from the
existing players, fluid market conditions, tough regulations, and an
unfavourable business environment. Moreover, given the more protectionist
policies adopted by countries like the US, Australia and members of the
European Union, to move into these territories would be expensive and risky.
The impact of higher taxes
If your IT business is in any of the above countries or you want to expand to
these countries, then you have to take into account the existence of high
corporate and individual taxes there. In fact, the recent tax cuts in the US
notwithstanding, the cost of setting up a business in the country can be huge.
The higher taxes can take the zing out of your profits and make your products
costly than that of your competitors. Thus, reaching out to new but choosy
customers in these territories can be bad news.
The beacon of hope
When countries like the US, European Union, Australia and many others have
a higher rate of taxes, going there could be a costly proposition. The best way
in such a situation is to either set up an offshore account in a tax haven like
Georgia or set up a company there to leverage its lower or no tax rates
(especially in a virtual zone,) and connect with customers in the markets
Staying ahead of competition means leveraging the advantages offered by the
global business environment. However, to make this a reality it is better to
take the help of reputed consultants who can facilitate IT company set up in
Please read the full content : http://www.kaukapital.com/2018/02/08/move-
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