Setting up a shell company (i.e. an offshore company) to legally reduce the corporate tax burden is a common international tax planning strategy. By choosing a country or region with favorable tax rates and flexible regulations, a company can optimize its global tax structure. However, it is important to ensure that all operations comply with relevant laws and regulations to avoid tax evasion or other illegal activities. The following are some countries or regions that are often used to set up shell companies: 1. **Cayman Islands**: - No corporate income tax, capital gains tax and withholding tax. - Stable legal system and strong confidentiality. 2. **Bermuda**: - No corporate income tax, capital gains tax and value-added tax. - Developed financial services industry, suitable for insurance and reinsurance companies. 3. **British Virgin Islands (BVI)**: - No corporate income tax, capital gains tax and inheritance tax. - Low registration and maintenance fees. 4. **Singapore**: - Low corporate income tax and many tax incentives. - Sound legal system and good international reputation. 5. **Luxembourg**: - Favorable corporate tax rates, especially for multinationals. - Strong financial services and legal framework. 6. **Hong Kong**: - Low corporate income tax, only taxes profits from Hong Kong. - Open business environment and sound legal system. 7. **Ireland**: - Low corporate tax rate (12.5%), attracting many multinational companies to set up European headquarters. - Strong technology and pharmaceutical industry base. 8. **Netherlands**: - Favorable tax treaty network, which helps avoid double taxation. - Often serves as the regional headquarters of multinational companies. **Notes**: - **Compliance**: Before choosing to set up a shell company, be sure to consult professional tax advisors and legal experts to ensure that all operations comply with international and local laws and regulations. - **Transparency**: In recent years, countries have strengthened supervision of offshore companies, requiring greater transparency and information disclosure to combat tax evasion and money laundering. - **Economic substance requirements**: Some countries require offshore companies to have actual business operations in the local area to avoid being used purely as a tax planning tool. - **International cooperation**: Comply with international standards such as the Common Reporting Standard (CRS) and the Anti-Tax Avoidance Rules (BEPS) to ensure the legality and transparency of tax arrangements. Through careful and legal tax planning, companies can effectively optimize their tax burden, but they must operate within the legal framework to avoid potential legal risks and reputational damage.