Choosing a country for business expansion involves more than comparing corporate tax rates. A company may benefit from tax relief on research and development, deductions for business investments, or a system that allows profits to remain in the business until they are distributed. The value of these benefits depends on the company’s activities, ownership and eligibility.
In 2026, several countries will offer tax provisions designed to support investment, innovation and business growth. Here are 10 jurisdictions worth considering, along with the specific tax advantages that may make them suitable for different business models.
Explore Vorx Consultancy’s services to discuss your international business setup requirements.
1. Latvia: Tax Advantages for Reinvested Profits
Latvia’s corporate tax is usually applied to profits once they’ve been distributed. The standard rate of corporate income tax is 20% on the grossed up taxable base which is equivalent to 25% on the net distributed dividend. This means that you can retain your earnings to invest into your business, buy equipment and employ new staff without paying any corporate income tax. However, there may be some situations where you would incur tax. This may be due to non-business expenses or profits that are seen as distributed.
Suitable For: Companies that plan to reinvest earnings into business development instead of distributing all profits to shareholders each year.
Key Tax Benefit: Tax on retained profits is generally deferred until distribution, helping businesses keep funds available for growth.
2. Lithuania: Tax Relief for Startups and Innovation
Lithuania offers several tax benefits to eligible businesses. They offer an exemption from corporate income tax in the first and second year of activity for qualifying small businesses. If your business carries out qualifying research and experimental development, you can claim three times the deduction on your qualifying R&D costs. You may also be eligible to pay a reduced rate of corporate income tax (7%) on qualifying profits from the commercialisation of inventions from your R&D activity. There are conditions to qualify for these benefits.
Suitable For: Eligible startups, technology businesses and companies investing in product development.
Key Tax Benefit: Qualifying businesses may reduce taxable income through R&D deductions or access startup tax relief.
Explore Vorx Consultancy’s services to discuss your international business setup requirements.
3. Czech Republic: Additional Deductions for Research and Development
The Czech Republic offers a specific deduction for qualifying research and development costs. Your company will be able to claim qualifying costs as a normal business expense. In addition to this, you may be able to claim an extra deduction if your company meets the R&D allowance criteria. This can help reduce your taxable profits. You’ll be able to claim costs for research staff, materials and some operating costs if they relate directly to your R&D activity. Keeping good records for your projects will be important.
Suitable For: Manufacturers, engineering companies and businesses developing new products, processes or technologies.
Key Tax Benefit: The additional deduction can reduce the taxable profit associated with qualifying innovation expenditure.
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Businesses comparing international tax systems can also explore the countries with the lowest corporate tax rates in 2026 to understand how corporate tax rates differ across jurisdictions.
4. New Zealand: A Tax Credit for Eligible R&D
New Zealand offers a 15% Research and Development Tax Incentive (RDTI) to businesses with eligible R&D expenditure. Companies can claim credits on qualifying employee costs, materials, services and depreciation related to eligible R&D activities. The standard minimum expenditure is NZ$50,000 per year, and the usual maximum is NZ$120 million in eligible expenditure, unless approval is granted to exceed that limit.
Suitable For: Companies undertaking qualifying scientific or technological development.
Key Tax Benefit: The 15% credit can help offset eligible R&D costs and support continued investment in innovation.
Explore Vorx Consultancy’s services to discuss your international business setup requirements.
5. Netherlands: Tax Support for Qualifying Innovation Profits
The Netherlands offers an innovation box which can reduce your effective tax liability on qualifying profits from your eligible innovation activity. Usually you’ll need to meet the R&D criteria. This includes meeting the criteria for the Dutch WBSO R&D tax credit. Larger businesses may have additional requirements such as patents or qualifying proof of innovation. This means this benefit is more relevant to businesses developing and commercialising intellectual property.
Suitable For: Businesses that develop technology, intellectual property or other qualifying innovations.
Key Tax Benefit: Qualifying innovation profits may receive favourable tax treatment under the innovation box rather than being taxed entirely under the ordinary regime.
6. Canada: Tax Credits for Scientific Research and Development
Canada offers tax deductions and investment tax credits for eligible research and development through the Scientific Research and Experimental Development (SR&ED) programme. If your business meets the criteria, from tax years beginning after 15th December 2024, you may be able to claim an increased investment tax credit of 35%. This can be claimed on qualifying expenses up to the maximum limit. Other claimants may be eligible to claim the standard rate of 15%. There are detailed criteria for qualifying work, expenses and documentation.
Suitable For: Canadian businesses carrying out qualifying scientific research or experimental development.
Key Tax Benefit: Eligible companies may recover a portion of qualifying R&D expenditure through investment tax credits.
Explore Vorx Consultancy’s services to discuss your international business setup requirements.
7. United Kingdom: Tax Relief for Qualifying R&D Projects
The UK offers tax relief for qualifying R&D through the Research and Development Expenditure Credit (RDEC) scheme. Additionally there is an Enhanced R&D Intensive Support scheme for qualifying loss making R&D intensive SMEs. To qualify your business will need to meet the criteria for the work and costs. This can include qualifying if you’re trying to make an advancement in science/technology by overcoming uncertainty. A product development wouldn’t qualify unless there was a qualifying scientific/technological uncertainty. Your company will need to meet HMRC requirements to claim and provide the correct information.
Suitable For: Companies investing in qualifying scientific or technological projects.
Key Tax Benefit: Eligible R&D expenditure may qualify for tax relief or credit, helping reduce the financial cost of innovation.
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Before choosing a country for international expansion, Indian entrepreneurs should understand the best business structures for expanding abroad and how each option aligns with their ownership, operational and tax requirements.
8. Switzerland: Tax Planning Across Cantons
Switzerland has a federal tax system with cantonal and community taxes. Each canton will have its own legislation meaning that the overall tax liability could vary depending on where you set up and operate. This means it’s wise to consider the location. However, just because you’re getting a lower tax liability in a canton doesn’t mean you won’t have other costs.
Suitable For: Businesses considering a long-term Swiss presence and able to compare locations based on their actual operational needs.
Key Tax Benefit: Cantonal differences allow companies to evaluate the overall tax impact of different locations within Switzerland.
Explore Vorx Consultancy’s services to discuss your international business setup requirements.
9. Poland: A Reduced Corporate Tax Rate for Eligible Small Businesses
Poland has a standard rate of corporate income tax. However, there is a reduced rate of 9% for eligible taxpayers. This is subject to conditions such as revenue caps and limitations on certain reorganisations or transactions. This can help reduce your tax liability if your business meets the criteria. It’s important to check that your company is eligible in the financial year. You should also consider your legal structure and revenue.
Suitable For: Eligible startups and smaller companies that meet Poland’s reduced-rate requirements.
Key Tax Benefit: Qualifying companies may pay corporate income tax at 9% rather than the standard 19% rate on eligible income.
10. Australia: Tax Support for Eligible Research and Development
Australia has a Research and Development Tax Incentive to help eligible companies reduce some of their costs on qualifying R&D. This is done through tax offsets. The amount you can claim will depend on various factors such as your company’s aggregated turnover. You will need to register qualifying activities and keep records showing that your work meets the criteria. Australia has announced changes to the scheme for 2028. However, the current scheme will still run until the changes become active.
Suitable For: Companies undertaking eligible R&D activities in Australia.
Key Tax Benefit: The R&D tax offset can reduce the after-tax cost of qualifying innovation activities.
How Vorx Consultancy Can Help With International Business Setup?
When considering which jurisdiction to choose, you need to consider what your business is doing, who owns it, what your banking requirements are, what your tax residency status is, what your reporting obligations are and where you’ll actually be operating.
Vorx Consultancy can help your business with setting up a company internationally, expanding and banking. We can also support tax and compliance issues in multiple jurisdictions. The right starting point is to assess your business model and expansion plans before deciding where to establish a company.
Looking to expand your business internationally? Connect with Vorx Consultancy for Expert Advice.
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Visit: www.vorxcon.com
Email: support@vorxcon.com
Final Thought
When thinking about setting up in a business friendly country in 2026, there are more things to consider than just the corporate tax rates. Tax credits, deductions, reinvestment rules and eligibility can all have an impact on how much your company pays. You should compare these benefits against your business’ needs, expansion plans and ongoing compliance requirements. Choosing the correct country will help you to grow sustainably and keep your tax liabilities manageable.
