Relocating your business: Portugal, Andorra, Georgia, Panama or Bahamas?
- 11 hours ago
- 7 min read
Summary
Introduction
Relocating a company's headquarters to a more favorable jurisdiction appeals to many executives, but the process is rarely a simple administrative formality. Between Portugal, Andorra, Georgia, Panama, and the Bahamas, the differences in corporate taxation are considerable, and each regime operates according to its own logic. Furthermore, it's crucial to distinguish between the stated tax rate and the actual tax burden after the company's assets have been dealt with.
We recently discussed the rise of the global minimum tax and its effects on relocation strategies. This article extends the discussion to the corporate perspective, comparing five destinations from the standpoint of corporate tax rather than solely based on personal residence.
A credible business relocation rests on three pillars: an attractive tax rate, genuine economic substance, and compliance with French and European anti-abuse rules. This comprehensive analytical framework is what we methodically apply to each country.
Relocating a company is not the same as moving a mailbox.
Relocating a company's registered office is not enough to shift the tax burden. The French tax authorities, like most of their European counterparts, focus on the place of effective management, that is, where strategic decisions are actually made. A shell company without a director or any activity on the premises remains subject to reclassification in France .
The concept of a permanent establishment completes this framework. As soon as a foreign company maintains premises, staff, or a complete business cycle in France, a portion of its profits remains taxable there. Relocation, therefore, only protects what has actually been transferred , never what continues to be operated from the country of origin.
Economic substance: the true arbiter
Offices, employees, local bank accounts, contracts signed on-site: substance is demonstrated by facts, not by an address. Serious jurisdictions increasingly require this, and a structure lacking operational reality weakens the project instead of optimizing it.
Portugal: an IRC of 19% that is decreasing year after year
Portugal is not pursuing a zero-interest rate strategy, but rather a credible European framework with a planned reduction. Corporate income tax (IRC) has been reduced to 19% in 2026 from 20% the previous year, on a trajectory intended to bring it down to 17% in 2028 .
Small and medium-sized enterprises benefit from a reduced tax rate of 15% on the first €50,000 of taxable profit, with the remainder taxed at the standard rate. Municipal and state surcharges are also levied on high profits, making the choice dependent on the actual level of profit generated.
Madeira and access to the single market
The autonomous region of Madeira applies significantly lower corporate income tax rates than the mainland, around 13%, and even lower for micro-enterprises. This advantage, combined with membership in the European Union, appeals to companies seeking both substance and access to the single market . We outline these conditions on the page dedicated to relocating businesses to Portugal .
Andorra: Corporate tax capped at 10%
The principality applies a corporate tax, the Impost de Societats, at a flat rate of 10%, one of the lowest in Europe. The country combines this moderate tax burden with the absence of a wealth tax and a valued regulatory stability , all within easy reach of France.
Andorra is not a member of the European Union, but has signed agreements that bring it closer to international transparency standards. For a consulting, management, or asset holding company, the framework offers a level of simplicity and clarity rarely matched in the region.
A physical presence is always required.
An attractive tax rate never eliminates the need for a tangible presence: an office, local management, and active business operations. Both Andorran and French authorities scrutinize the reality behind the structure, and a purely passive company is insufficient to secure the tax regime. We detail these requirements on the page about relocating a business to Andorra .
Georgia: the Estonian model, 0% on profits reinvested
Georgia has adopted the Estonian model of corporate taxation: the 15% tax is levied on profits only upon distribution. As long as profits are reinvested in the company, the effective rate remains 0%, which directly promotes self-financed growth .
The country also offers specific statuses, such as the Virtual Zone reserved for exporting IT companies, which reduces the taxation of IT services to 0% along with a reduced withholding tax on dividends. However, these schemes require that the business activity be physically located in Georgia.
A substance that is increasingly controlled
Since 2026, the Georgian government has been tightening its controls on the economic viability of companies benefiting from these statuses. Local developers, offices, and consistent invoicing are now essential to maintain the advantage; otherwise, the scheme can be retroactively revoked . The page on relocating a business to Georgia details these criteria.
Panama: a territorial tax of 25%
Panama applies a 25% corporate tax, but only on income from Panamanian sources. Profits generated outside the country are generally exempt from local taxation, making it a popular base for companies with strictly international operations .
This territorial logic is accompanied by the use of the US dollar as currency and a developed banking sector. For a holding company or service company operating outside the zone, the equation can prove favorable, provided it can be demonstrated that the activity is genuinely conducted from abroad .
Be careful about the real source of income
The distinction between Panamanian and foreign income hinges on specific factors: the location of services, clients, and management. A company that actually manages its operations from France risks being subject to dual scrutiny, both French and Panamanian, and loses the benefit of a poorly defined territorial identity . We address this issue through our page on relocating businesses to Panama .
Bahamas: zero tax, except for large corporations
The archipelago traditionally levies no corporate income tax, which explains its reputation as a zero-tax haven. Public revenue is based on VAT and customs duties, leaving businesses with no direct taxation on their profits.
However, the situation has changed for very large groups. With the introduction of a minimum additional tax of 15%, multinationals with a turnover exceeding €750 million are now taxed at this level, in accordance with Pillar 2 of the OECD . SMEs and smaller companies remain at 0%.
For a holding company or asset management firm below this threshold, the Bahamas remains a significant tax advantage, provided that the setup costs and expected resources are anticipated. The page on relocating a business to the Bahamas details the steps involved.
The comparison in a table
The table below summarizes the rationale for each destination. It does not replace a personalized analysis , as the taxable base and substance requirements are just as important as the displayed rate.
Jurisdiction | Corporate tax | Taxable base | Key point |
Portugal | 19% (15% SMEs) | Global | EU framework, rates falling |
Andorra | 10% | Global | European floor rate |
Georgia | 15% to distribution | Profit distributed | 0% if reinvested |
Panama | 25% | Panamanian source | Foreign income exempt from tax |
Bahamas | 0% (15% if in a group) | Local result | No direct tax below the threshold |
Substance, ATAD and exit tax: the essential elements not to be forgotten
Regardless of the country chosen, several European safeguards govern business relocation. Anti-abuse rules, particularly the controlled foreign company (CFTC) regime, allow for the reintegration into France of profits from an artificial subsidiary established in a low-tax country. Economic realities remain the determining factor .
Exit tax, agreements and transfer pricing
The transfer of assets or securities abroad can trigger taxation of unrealized capital gains, while transfers between related entities must comply with arm's length transfer pricing. A tax treaty between France and the host country governs these relationships and prevents double taxation, without ever eliminating the requirement of verifiable substance .
We thought that opening a company in Georgia would be enough to remove our revenues from the French market; without an office or team on the ground, the arrangement proved untenable. By establishing a real business and local management, the structure became robust enough to withstand scrutiny , testifies an executive who received support in 2026.
Conclusion
Portugal, Andorra, Georgia, Panama, and the Bahamas are outlining five very different strategies: a reduced European framework, a 10% floor rate, taxation only on distributions, territorial taxation, or zero taxation below the threshold. The right choice depends on the nature of the activity and the ability to establish a real presence there .
Before any transfer, it is wise to compare your project with applicable substantive rules, anti-abuse measures, and conventions. You can explore relocating your business with Coreway Consulting .
Frequently Asked Questions
Is it enough to transfer the head office to relocate taxation?
No. What matters is the place of effective management and the actual economic substance. A company without a manager, office, or activity on-site remains liable to reclassification in France, regardless of the country of registration.
Which country offers the lowest corporate tax?
Among these five destinations, the Bahamas have 0% below the threshold for large groups, and Georgia has 0% on reinvested profits. Andorra's territorial tax rate is capped at 10%, followed by Portugal at 19% and then Panama at 25%.
How does the Estonian-Georgian model work?
The 15% corporate tax is only due when profits are distributed. As long as they are reinvested in the company, the effective rate remains 0%, which supports self-financing and growth.
Does Panama's territorial taxation truly exempt foreign income?
Yes, in principle: only income from Panamanian sources is taxed at 25%. However, this is contingent on the activity actually being conducted outside of Panama, based on verifiable criteria such as location of management, clients, and services provided.
Are the Bahamas still a zero-tax territory?
For SMEs and small businesses, yes: corporate income tax remains zero. Only multinationals with a turnover exceeding €750 million now face a minimum 15% tax under Pillar 2.
What are the risks if the substance is insufficient?
The company can be reclassified in France, its profits reinstated through anti-abuse rules, and local advantages challenged. A credible presence, with offices, staff, and effective management, remains the only lasting protection.
