How to choose a jurisdiction for a gambling company in 2019: opinion of Viacheslav Ustimenko

How to choose a jurisdiction for a gambling company in 2019: opinion of Viacheslav Ustimenko

How to make a right choice of a country for registering a gambling company? The head of LAWBOOT legal firm Viacheslav Ustimenko, an expert in legal consulting for global IT, fintech, and gambling companies, highlighted the issue in his report for Kyiv iGaming Affiliate Conference.

Read further in the article about five jurisdictions most beneficial for registering a company in the opinion of Viacheslav Ustimenko.

About current situation with registration of companies

In January of 2018, a crisis started in Latvia, where many Ukrainian entrepreneurs held accounts. As a result, 24,000 accounts of entrepreneurs were frozen.

“Many Ukrainian companies are now registered as Scottish or British partnerships. As far as I know, only Latvian banks continue working with them. If you want to be the 24,001th entrepreneur whose account is blocked at some point, keep the way you are going. If not, LP and LLP are not a juridical solution anymore. If you want to have a normal bank account, change LP in favor of Hong Kong,” Viacheslav states.

Overall, Viacheslav outlined five countries that offer most beneficial conditions for registering a gambling company: Hong Kong, Cyprus, Bulgaria, Switzerland, and the USA.

Registering a gambling company in Hong Kong

Hong Kong is an advantageous jurisdiction primarily because the authorities there offer privileged zero taxation. The second reason is that there are no hidden taxes.

However, one should take into account that in order not to pay taxes in Hong Kong, a company should hold an account outside the country, for example, in Switzerland, Bulgaria, Hungary, Cyprus, or Georgia.

Registration cost: from $2500.
Registration time: on average 3-4 weeks.

In general, the tax system in Hong Kong can compete even with offshore areas providing big opportunities for financing and international trading.

Registering a gambling company in Cyprus

There are many advantages of registering a company in Cyprus, for example, political stability and lack of foreign exchange regulation. Besides, Cyprus is not on the list of the Ukrainian offshore areas.

On June 14 of 2018, the Central Bank of Cyprus forbade such foreign companies as Shell to open accounts in case they have at least one of the following characteristics:

  • a company does not have an office in the country of incorporation (even if it has a legal/postal address);
  • a company does not have independent economic value.

Registration cost: from $2100.
Registration time: on average 3 weeks.

Cyprus has one of the lowest corporate tax rates in the EU (12.5%), but one should take into account that a company will not be able to open an account in Cyprus without having a physical office there.

Registering a gambling company in Bulgaria

To open a company in Bulgaria, one should meet the following requirements:

  • a company should have at least one director, it can be either a natural person or a legal entity;
  • at least one shareholder;
  • the legal address of the company should be registered in the Bulgarian jurisdiction;
  • obligatory payment of no less than 70% of the registered capital, the total sum of which is 50,000 BGN for a joint venture company and 5,000 BGN for a limited liability company.

Registration cost: from $300.
Registration time: on average 1-3 weeks.

Any foreigner can open a firm in Bulgaria even without a permanent residency. The exclusion is an individual entrepreneur that cannot become a legal entity.

Registering a gambling company in Switzerland

Swiss legislation classifies just two business legal structures for companies registered in the country:

  • limited liability company;
  • public company.

There are no requirements to the citizenship of founders, but one of the directors should be a citizen of Switzerland.

Registration cost: from $8000.
Registration time: on average 3-4 weeks.

Overall Switzerland has a rather attractive taxation system, favorable legislation (even for non-residents), stable political and economic situation.

Registering a gambling company in the USA

Launching a business in the USA does not differ from other countries. However, when registering a company, one should take into account that this country has a two-level taxation system, which includes federal taxes and state taxes.

Registration cost: from $800.
Registration time: from 1 month.

The USA has favorable conditions to develop a business, although every state has its own taxation rules, levies, and laws of business registration.

To take into account all peculiarities and not to make a mistake with the registration, one should primarily consult lawyers.

Interview with Viacheslav Ustimenko ►►►

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