Relocating your business: Andorra, Georgia, Panama, Portugal or Bahamas?
- 6 days ago
- 7 min read
Summary
Introduction
Relocating a company to a more favorable jurisdiction is never simply a matter of choosing the lowest tax rate. The decision impacts the very essence of the business , its employees, its contracts, and its relationship with the French tax authorities. Five destinations regularly appear in the projects we support: Andorra, Georgia, Panama, Portugal, and the Bahamas.
We recently compared relocation to Cyprus, Dubai, Malta, Mauritius, and Singapore . This article extends this analysis to a second group of jurisdictions, whose tax systems differ significantly from one another.
Each option addresses a specific need: proximity to Europe, deferred taxation, access to the single market, or zero tax on profits. The challenge lies in aligning this framework with your actual business activity and wealth management objectives, while always remaining mindful of French exit regulations.
Relocating the company, not just the manager
Many projects confuse two distinct transactions: the transfer of the manager's personal residence and the relocation of the operating structure. However, it is the location of the effective management and operations that determines where the company is actually taxed. A holding company registered abroad but managed from France remains, in the eyes of the tax authorities, a French resident.
The first step, therefore, is to map out what the company actually does: where its customers, teams, assets, and decision-making processes are located. This assessment determines the project's credibility and its resilience to scrutiny . A sound relocation relies on verifiable facts, not just a mailbox.
Three questions to ask yourself before comparing
Even before considering interest rates, three questions determine most cases. Is your business mobile or locally based ? Are your clients European, making access to the single market invaluable? And can you establish a real presence locally, with human and material resources commensurate with your revenue?
The answers immediately point to a family of jurisdictions. A digital services company that exports will not have the same priorities as an international trader or a holding company . This analytical framework structures the comparison of the five destinations below.
Andorra: a European gateway with moderate taxation
The principality is attractive first and foremost because of its proximity: just a few hours' drive from France and Spain, it allows businesses to maintain a foothold in Europe. Corporate tax is capped at 10% at the general rate , while the local VAT, the IGI, remains the lowest on the continent at 4.5%.
Andorra does not levy a wealth tax or inheritance tax, and dividends distributed to residents are not taxed. This framework is particularly suitable for executives who wish to remain geographically close to their markets while reducing their tax burden. The trade-off lies in strict residency and establishment requirements that must be meticulously followed.
For an operating structure, the principality has significantly professionalized its conventional network in recent years. We detail the conditions on our page dedicated to relocating a business to Andorra , where the issue of local substance plays a central role.
Georgia: Territoriality and the Estonian Model
Georgia combines two rarely found advantages: a notoriously simple administration and a corporate tax system inspired by the Estonian model . Specifically, tax is only due when profits are distributed, not when they are earned.
The Estonian model applied to reinvestment
As long as profits remain within the company and are used to finance its growth, they escape taxation. This deferred taxation mechanism clearly benefits companies in the investment phase, which can build up capital before any withdrawals. The tax rate only applies to profits actually withdrawn from the company.
For smaller businesses, Georgia also offers specific tax regimes with particularly lenient regulations regarding foreign-sourced income. Digital entrepreneurs find a flexible and inexpensive administrative environment there. Our team supports these projects through our business relocation page for Georgia .
Panama: Territorial taxation at the crossroads of the Americas
Panama applies a strictly territorial tax system : only income from Panamanian sources is taxed, at the standard rate of 25%. Profits generated abroad, on the other hand, are generally exempt from local taxation, making it a popular platform for international trade.
What territoriality changes for an operating company
For a company whose customers and suppliers are located outside the country, this rule transforms the tax equation. However, this only applies if the business activity is genuinely conducted from abroad , without any artificial connection to Panamanian territory. The distinction between local and foreign income then becomes the key point of concern.
Backed by the US dollar and boasting a leading logistics hub, Panama attracts traders and service providers focused on the Americas. We carefully examine each case, particularly the issue of substance, on the business relocation page for Panama , to avoid any reclassification.
Portugal: access to the European Union and real substance
Portugal plays a different role: that of a member state of the European Union , and is therefore fully integrated into the single market and tax directives. Its corporate tax rate is around 21% on the continent, a typical European level, but with targeted tax regimes.
IFICI and the Madeira business center: two distinct levers
Since 2025, the former non-habitual resident tax regime has been replaced by the more restrictive IFICI (French Real Estate Investment Trust), which reserves a 20% rate for high-value-added professionals and exempts a large portion of foreign income. The Madeira International Business Centre, for its part, offers a reduced rate of 5% to eligible companies until the end of 2027.
These two schemes address distinct needs and each requires the creation of tangible assets : jobs, offices, and actual business activity. We detail the eligibility requirements on the page about relocating a business to Portugal , emphasizing the job creation requirements.
Bahamas: Zero corporate tax, but substance required
The Bahamas remains one of the few jurisdictions without corporate or personal income tax. This absence of direct taxation appeals to mobile assets and asset-holding structures , provided one is willing to accept a genuine geographical distance.
Since 2024, however, the archipelago has transposed Pillar 2 of the OECD by introducing a minimum tax of 15% reserved for multinational groups with a turnover exceeding €750 million. SMEs and individual assets are not affected, but this development serves as a reminder that even financial centers considered neutral are moving closer to global standards.
The economic substance requirements are now formalized and monitored there. To assess whether your business can be established there safely, we direct you to the page on relocating your business to the Bahamas .
“We thought that simple registration would suffice; the preliminary audit showed that real resources were needed on site. By defining the substance from the outset, our transfer passed our bank’s review without a hitch,” testifies a manager of a trading company supported in 2025 .
The comparison in a table
The table below summarizes the tax rules for each destination. It does not replace a personalized analysis , as the displayed rate reveals nothing about the taxable base or the associated substantive obligations.
Jurisdiction | Corporate tax | Tax base | Key point |
Andorra | 10% | Global | European proximity, IGI 4.5% |
Georgia | 15% to distribution | Profits distributed | Deferred taxation, simplicity |
Panama | 25% | Territorial | Foreign income exempt from tax |
Portugal | 21% (5% in Madeira) | Global, targeted regimes | Access to the single market |
Bahamas | 0% (15% large groups) | Nothing outside of pillar 2 | No direct tax |
Substance, transfer pricing and exit tax: the common ground
Regardless of the destination, three requirements consistently apply. The first is substance: human resources, premises, and decision-making must be genuinely present on the ground . Without it, the administration may dismiss the scheme on the grounds of abuse of rights.
Transfer pricing and tax treaties: avoiding double taxation
As soon as a company maintains ties with France, the prices charged between related entities must comply with the arm's length principle. Double taxation treaties and the automatic exchange of information, via the CRS standard, govern these transactions. Sustainable tax optimization is built on respecting these rules, never against them.
The final step is the French exit tax, which may apply to unrealized capital gains upon relocation. Anticipating this mechanism, as well as the rules governing controlled foreign companies, avoids unpleasant surprises at the outset . This is the key to a smooth and sustainable relocation.
Conclusion
Andorra, Georgia, Panama, Portugal, and the Bahamas do not offer the same thing: proximity to Europe, deferred taxation, territoriality, access to the single market, or near-total tax neutrality. The right choice depends primarily on your business activity and your profile as a manager , not solely on the advertised tax rate.
Before making any decisions, it is wise to compare your project with the rules regarding substance, transfer pricing, and exit tax. You can evaluate your relocation project with Coreway Consulting .
Frequently Asked Questions
Is the lowest tax rate enough to choose a jurisdiction?
No. A zero rate is only valuable if the tax base, substantive obligations, and access to agreements are aligned with your business activity. A well-suited 10% rate location is often preferable to an unsuitable 0% rate location.
Should one also transfer their personal residence?
Not always, but the location of effective management is just as important as that of the company. Managing a foreign entity from France exposes one to reclassification as a French tax resident.
What is meant by economic substance?
This refers to the company's actual resources on the ground: premises, qualified staff, locally made decisions, and actual operations. Most of these jurisdictions now formally monitor these resources.
Are the Bahamas still an attractive option despite the minimum tax?
Yes, this applies to SMEs and individual assets, which remain outside the scope of the 15% minimum tax. This only targets groups with a turnover exceeding 750 million euros.
Is Georgia suitable for digital activities?
Often, yes. Its distribution tax and its simplified status on foreign income make it a flexible framework for export-oriented digital entrepreneurs.
How do I know which destination is right for me?
Based on your business activity, your markets, and your ability to establish a tangible presence, a personalized study allows for an objective comparison of the five jurisdictions according to your specific situation.
