Hi!
I am aware businesses can choose where they are registered, based on tax benefits, local laws etc, but I was wondering what the benefit of this is for the country, especially if that business is not going to generate nay income in that country and therefore they cannot tax their income.
Thanks
I would see it that it might still create indirect income for the government even if it isn't via corporation tax.
It might be that it creates employment opportunities. If people are working for the company in that country, then whether its via income tax and those employees purchasing things they need locally, all that generates revenue into the economy. Even just having people flying in and out of that country for work will create some money for the government.
It might be that suppliers have to support the business in that jurisdiction, and that therefore it keeps other people in employment. And so then there is potentially a secondary level of revenue generates via their corporation tax, employees, suppliers etc.
Many governments have restrictions on what can/can't be registered in a country though for these reasons. They want to make sure there is an advantage to them and that they will generally financially benefit from such arrangements.
