Top 7 Countries With the Lowest Corporate Tax Rates in 2025

Corporate tax rates significantly influence business decisions, especially for companies seeking to optimise profits or expand internationally. Choosing a jurisdiction with a favourable tax regime can reduce costs, improve cash flow, and support long-term growth.

This article highlights the top 7 countries with the lowest corporate income tax rates in 2025, offering insights into their tax structures and benefits for businesses.

Now, let’s take a closer look at the 7 countries offering low corporate tax rates and the benefits they provide.

Hong Kong is a global financial hub with a business-friendly environment and low taxes. With a corporate tax rate of 16.5%, which is much lower than the global average of 23.51%, Hong Kong is an attractive destination for businesses around the world.* *

In addition, companies with offshore tax status enjoy a 0% tax rate on foreign-sourced income, provided they meet specific criteria set by the Hong Kong Inland Revenue Department.

Beyond its tax advantages, Hong Kong has a skilled workforce and serves as an important gateway to Asian markets, including Mainland China. These factors contribute to its high ranking on our list.

Hong Kong Key Tax Information

Hong Kong’s Tax Incentives for Businesses

• R&D Deductions: Claim up to 300% deduction on the first HKD 2 million spent on R&D and 200% on the rest.
• Asset Depreciation: Tax relief on investments in buildings, machinery, and equipment.
• Loss Carry-Forward: Use business losses to offset future profits with no time limit.
• Charitable Donations: Deduct up to 35% of corporate profits for approved donations.
• Interest Deductions: Tax relief on certain loans, especially for intra-group financing.*

Ireland is a key location for businesses because of its low 12.5% corporate tax rate and ties to the European Union.* Companies based in Ireland can reach the EU single market easily, making it a great choice for businesses looking to expand their reach.

The country encourages growth through tax incentives like R&D tax credits, the Knowledge Development Box for lower taxes on IP profits, and relief for start-ups during their early years.* * With these advantages, Ireland provides the tools businesses need to grow and compete globally.

Ireland Key Tax Information

Ireland’s Tax Incentives for Businesses

• R&D Tax Credits: Claim a 30% tax credit on eligible R&D expenses.
• Knowledge Development Box (KDB): Enjoy a 10% tax rate on profits from qualifying R&D activities, encouraging innovation. 
• Tax Relief for New Start-Up Companies: Up to five years of corporation tax relief, with full relief up to EUR 40,000 and partial relief between EUR 40,000 and EUR 60,000.
• Accelerated Capital Allowances (ACA): 100% tax deduction in the first year for energy-efficient equipment, gas vehicles, and employee-focused facilities like crèches and gyms.
• Capital Allowances: Deduction for capital expenditure, including 12.5% over 8 years for plant and machinery and 4% over 25 years for industrial buildings.

Singapore stands as a beacon of fiscal efficiency and business friendliness, not just in Asia but globally. While the statutory corporate tax rate is at 17%, the effective rates are potentially significantly lower.

For instance, the Development and Expansion Incentive offers pioneer companies exemptional tax rates for up to 15 years, along with various incentives for specified activities and industries like R&D, intellectual property management, and financial services.

Additionally, Singapore provides a wide array of tax treaties aimed at preventing double taxation and promoting favourable conditions for local taxes – not only for corporations but for individuals, too.

Singapore Key Tax Information

Singapore’s Tax Incentives for Businesses

• Tax Exemptions for New Start-Ups: Up to SGD 125,000 in tax exemptions over the first 3 years for qualifying new start-ups.
• Additional R&D Incentives: Enjoy tax deductions of up to 300% on the first SGD 400,000 staff costs and consumables, with 150% deductions for expenses exceeding that amount. These incentives encourage innovation and support business growth.
• CIT Rebate: 50% rebate on corporate tax payable, capped at SGD 40,000, to help businesses manage rising costs.
• CIT Rebate Cash Grant: SGD 2,000 cash grant for companies employing at least one local employee in 2023.*

The United Arab Emirates (UAE) is a leading destination for companies seeking favourable tax benefits and a strategic location. Businesses enjoy low corporate taxes—0% in free zones and 9% on the mainland.* * The UAE allows 100% foreign ownership, making it easy to set up without needing local partners.

Additionally, the UAE boasts excellent infrastructure and a prime location that connects companies to major markets in Asia, Europe, and Africa. These advantages make the UAE a great place for global business growth and success.

UAE Key Tax Information

UAE’s Tax Incentives for Businesses

• Free Zone Corporate Tax Benefits: Over 40 free zones with customised benefits—such as duty exemptions, streamlined licensing, and easy company setup—to accommodate various industries (e.g., logistics, media, technology).
• Small Business Relief: Businesses with a revenue of up to AED 3 million can elect not to be taxable, subject to meeting prescribed conditions​​.

Hungary has the lowest corporate tax rate in the European Union at just 9%.* The flat tax rate applies to all companies, providing simplicity and predictability. 

Hungary also offers incentives like development tax allowances and investment subsidies to support growth. These programs encourage innovation and investment in different regions. Additionally, Hungary has a skilled workforce and good infrastructure, making it a strong choice for international businesses that want an affordable base in Europe.

Hungary Key Tax Information

Hungary’s Tax Incentives for Businesses

• Development Tax Allowance: Tax relief of up to 80% of the corporate tax base for qualifying investments over a 13-year period, with eligibility starting at HUF 3 billion (or lower for SMEs and specific regions). Applicable to sectors like R&D, environmental protection, and job creation.
• Foreign Tax Credit: Offers relief for income taxes paid abroad, up to 90% of the foreign tax or the Hungarian tax payable on the income. This ensures businesses avoid double taxation and simplifies cross-border operations.
• Tax Credits on Investments: Provides CIT relief for energy-saving projects, covering up to 45% of eligible costs (up to EUR 15 million), with higher benefits for SMEs. Applicable to upgrades, renewals, and other projects that improve energy efficiency.*

Estonia offers a 22% corporate tax rate applied only to distributed profits, allowing businesses to reinvest earnings tax-free.* Ranked #1 in Tax Competitiveness by the OECD for 11 years, its deferred tax system is ideal for startups and SMEs focused on growth.*

The e-residency programme further simplifies doing business in Estonia. Companies can manage all tax and payroll activities online via the e-MTA portal, eliminating the need for physical paperwork. Even payroll registration is unnecessary until your company pays dividends or salaries, making it easier for new businesses to get started.

Estonia Key Tax Information

Estonia’s Tax Incentives for Businesses

• E-Residency Programme: Start and manage an Estonian company from anywhere, with full access to Estonia’s digital infrastructure.
• Deferred Tax System: Supports small business growth by taxing profits only when distributed.
• 100% Online Tax Management: Manage all corporate, payroll, or sales taxes through the user-friendly e-MTA portal.
• R&D Grants: Financial support for innovative projects, especially in technology and digital sectors.

While Switzerland doesn’t offer the lowest taxes globally, its strong incentives and a stable business environment make it attractive for companies seeking innovation, stability, and access to European markets.

The country offers a mix of federal, cantonal, and municipal taxes, resulting in corporate tax rates that range from 11.9% to 21%.* Businesses benefit from incentives like R&D super deductions and patent box regime, making Switzerland a good location for global expansion.

Switzerland Key Tax Information

 Switzerland’s Tax Incentives for Businesses

• Patent Box: Offered at the cantonal level, this program provides a tax break of 10% to 90% on eligible income generated from patents and similar rights. Note that this does not affect federal taxable income.
• R&D Super Deductions: Tax deductions up to 150% for R&D expenses in certain cantons.*

Listing the countries with the lowest corporate tax rates is simple—but relying on tax savings alone can be a short-sighted approach. Many low-tax jurisdictions come with strict banking regulations, reputational risks, and limited trade agreements, making it difficult for businesses to operate efficiently.

That’s why, instead of focusing solely on tax rates, we’ve considered a broader set of factors to identify business-friendly jurisdictions that balance tax efficiency with long-term stability:

✅ Sustainable Tax Policies – Competitive corporate tax rates that are structured, transparent, and compliant with global standards. Hong Kong and Singapore, in particular, are great examples of this.
✅ Ease of Incorporation – Straightforward company registration, digital services, and minimal bureaucratic hurdles.
✅ Banking & Trade Accessibility – Strong financial infrastructure, international payment options, and trade agreements that enable seamless global operations.
✅ Regulatory Stability – A predictable legal framework that reduces risks related to sudden policy shifts or increased scrutiny.
✅ Reputation & Compliance – Jurisdictions that offer tax advantages without being classified as offshore tax havens, ensuring businesses maintain credibility with financial institutions and investors.

By prioritising these factors, we highlight locations that provide not just tax benefits, but also a secure and efficient environment for sustainable business growth.

If low corporate tax rates were the sole consideration, the following jurisdictions would top the list:

However, these locations come with significant drawbacks:

• Banking and Compliance Challenges – Strict regulations make it difficult to open business bank accounts and access financial services.
• Reputational Risks – Many financial institutions and investors avoid businesses registered in known offshore tax havens.
• Limited Market and Trade Access – These jurisdictions often lack strong trade agreements, making international expansion harder.

For sustainable growth, a business-friendly environment matters just as much as tax rates.

When choosing a jurisdiction for your business, corporation tax is just one factor to consider. A successful decision involves evaluating various elements that impact your business’s success and long-term stability.

Here are some additional tips to consider:

• Ease of Doing Business: Look for jurisdictions with streamlined business registration processes, digital services, and efficient bureaucracy. Hong Kong and Singapore stand out for their fast incorporation and business-friendly policies, reducing administrative burdens and setup delays.
• Tax Treaties: Ensure the country has a strong network of double tax treaties to minimise withholding taxes on international transactions. Without such treaties, businesses may face higher taxes on dividends, interest, and royalties, increasing costs and lowering profits. It can also lead to complex tax compliance and disputes over tax obligations across different countries.
• Economic and Political Stability: A stable regulatory and political environment ensures predictable tax policies and lower financial risks. Frequent law changes or political uncertainty can disrupt long-term business planning.
• Labour Costs and Talent Pool: Consider the availability of skilled workers, competitive wages, and training opportunities to meet your business’s needs. Labour shortages or high employment costs can slow expansion and increase operational expenses.
• Infrastructure and Location: Evaluate proximity to key markets, access to trade routes, and quality of infrastructure to support operations. Poor infrastructure and weak trade links can lead to higher costs and supply chain issues.
• Regulatory Environment: Review compliance obligations, industry-specific regulations, and how they align with your business goals. Excessive bureaucracy or unclear regulations can create unnecessary roadblocks for businesses.
• Additional Incentives: Check for grants, tax holidays, and subsidies tailored to innovation, R&D, or investments in specific regions. Without such incentives, businesses may face higher operational costs and miss opportunities for expansion and investment.

Selecting a country for business incorporation is about more than just finding the lowest corporate tax rate. While tax efficiency is important, factors like banking access, regulatory stability, and ease of doing business play a crucial role in long-term success.

If you’re considering expanding your business internationally, Statrys provides an all-in-one solution to simplify the process. From company incorporation in Hong Kong and Singapore to multi-currency business accounts and cross-border payment solutions, we help businesses establish a solid foundation while staying compliant with local regulations.

Ready to take your business global? Get in touch with Statrys today and start building your international presence.