Global tax changes and the new role of jurisdictions
2025 has marked a pivotal year for international business. The introduction of the global minimum corporate tax (Pillar Two, 15%), new requirements for ownership structure transparency, and significant tightening of banking compliance have led many companies to reassess their strategies. According to the Cyprus Registrar of Companies, the number of applications for company redomiciliation increased by 31% in 2024, and in the UAE, BVI, and Belize, the volume of new registrations reached historic highs.
These changes affect not only traditional offshore jurisdictions. Increasingly, companies from the UK, Germany, Poland, and Scandinavian countries are exploring options to relocate their headquarters or holding companies to new regions. The reason is the need to comply with international standards, maintain access to banking tools, and protect against sudden changes in tax policies.
Why companies choose new jurisdictions
Legarithm believes that in the face of ongoing changes in tax and regulatory policies, choosing a jurisdiction for a company has become a strategic decision. During redomiciliation or relocation, it is essential to carefully evaluate not only the tax advantages but also other key factors, such as the stability of the banking system, the presence of genuine economic requirements for the business structure (economic substance), and access to international markets. While jurisdictions like Cyprus and the UAE remain popular for their tax advantages, companies should also consider the stability of the legal system and the transparency of regulations.
In the UAE, businesses are drawn to the transparent tax system, the ability to hold full foreign ownership, modern banking infrastructure, and flexible regulations. Over the past two years, the UAE has emerged as a key hub for the relocation of European and Asian fintech, IT, and investment companies.
Cyprus remains a leader as a platform for holding structures and international groups, especially in the IT, gambling, and e-commerce sectors. However, from 2024, companies must demonstrate economic activity, such as having a local office, staff, real contracts, and financial flows.
How the redomiciliation process has changed
Traditional redomiciliation in 2025 is no longer a simple formality. It has become a multi-step process requiring a comprehensive analysis of tax, legal, and banking aspects, as well as an assessment of the consequences for the corporate group and its shareholders. Legal advisors specializing in international structures highlight the following key challenges:
· A sharp increase in due diligence checks from both regulators and banks;
· Costs for audits, tax structuring, and updating corporate documentation have risen by an average of 30-40% compared to 2022;
· The requirement to prove the actual location of the company’s main operations (economic substance) rather than just the legal address.
One of the key elements of success is a clear understanding of international tax treaties (BEPS, MLI), local legislation, and banking policies in the new jurisdiction. Without proper preparation, a company could face account freezes, license revocation, double taxation risks, or the inability to pay dividends.
Main risks and approaches to minimizing them
Legal migration in 2025 has become much more complex due to the increasing role of transparency and compliance procedures. Companies must:
· Ensure real presence in the country of registration (office, staff, bank account, business operations);
· Prepare extended document packages for banks and government authorities;
· Plan interaction with all counterparties and partners in advance to avoid disruptions during the transition;
· Monitor changes in international tax standards and agreements.
Even the most popular destinations, such as Cyprus and the UAE, are constantly updating their business transparency and tax residency requirements, which requires flexibility and strategic planning from companies.
Trends for 2025
In 2025, the choice of jurisdiction for a business will largely depend not only on tax advantages. Businesses increasingly value the stability of legislation, the availability of banking services, and the transparency of regulation. The predictability of the financial environment and the ability to adapt to new international standards are becoming important criteria. Specifically, the focus is on tax transparency, compliance with financial regulations, and adherence to anti-money laundering (AML) and counter-terrorism financing (CFT) standards. Additionally, jurisdictions offering support for technological and innovative sectors are becoming more popular, particularly due to favorable conditions for startups and research and development companies. Other important factors include the simplicity of regulation, access to international markets, and opportunities for flexible structural management, allowing businesses to scale seamlessly on a global level.
