How to choose a jurisdiction for an IT company in 2026

Nikita Veremeev

10.12.2025 | 6 min read

Updated: 10.12.2025

Over the past three years the COREDO team has been seeing the same scenario more and more often: an IT company with annual revenue of 10–30 million spends up to 9–12 months changing jurisdiction, and two years later is forced to start the process again due to changes in tax regulation and AML requirements.

The overly simple question “in which country to open a company?” becomes risky in 2026.

Choosing a jurisdiction for an IT company in 2026

When I hold a strategic session with IT business founders, we always start not with the country but with the criteria. Jurisdiction is a derivative of the business model, client geography, investment plans and the level of product regulation (fintech, AI, SaaS, marketplace, etc.).

Due diligence of jurisdictions

The first filter is due diligence of jurisdictions. At COREDO we analyze a country across several dimensions.

1. Reputation and stability of the legal system
   For IT businesses it is important not only corporate law but also how courts and regulators treat digital models, crypto elements, remote teams and data handling. A country may offer attractive tax incentives for IT companies, but if it has weak judicial protection or unpredictable law enforcement, this immediately reduces the jurisdiction’s investment attractiveness for IT businesses.
2. Tax burden and optimization
   We always calculate not the nominal, but the effective tax rate: corporate tax + dividend taxes + social contributions + local levies. It’s important not only the rate, but also the ability to use international tax planning, double taxation avoidance treaties and the presence of a sustainable regime not tied to temporary incentives.
3. Corporate reporting and audit requirements
   For clients focused on funds, reporting requirements for IT companies in the EU and transparency to investors are very important. At COREDO we see a trend: investors expect clear, comparable reporting in accordance with international standards and a transparent ownership structure, including holdings and sub-holdings.
4. legal risks of changing jurisdiction
   Changing the country of incorporation is often accompanied by exit tax triggers, contract renegotiations, changes in tax residency and risks of substance-related claims. We now build risk management for changing jurisdiction into the structure from the start: we look at how painlessly it will be possible in the future to move IP, create a separate holding or trust.
5. impact of sanctions and geopolitics
   For businesses from the CIS and some Asian countries, the impact of sanctions and geopolitics on jurisdiction choice is a critical factor. Some countries are formally open, but their banks practically do not work with certain regions. The COREDO team always includes an analysis of sanctions risks in due diligence, even if the company does not operate in sensitive goods or services.

Tax regulation and incentives for IT companies in Europe and Asia

The next layer is tax regulation for IT companies in 2026 and a comparison of tax rates for IT companies in Europe and Asia. In practice we most often discuss Cyprus, Ireland, Lithuania, Poland and Singapore.

1. Cyprus
   For IT structures Cyprus remains interesting as a platform for IP holdings and in terms of double taxation avoidance agreements. Registration features of companies in Cyprus include flexible corporate law, clear substance requirements (office, director, staff) and access to European infrastructure with a moderate tax burden.
2. Ireland
   Registering an IT company in Europe through Ireland is often justified when focusing on large B2B clients and entering English-speaking markets. The features of company registration in Ireland are important for structures with a strong IP base and R&D. Ireland offers a developed ecosystem, R&D support programs and clear corporate reporting requirements for IT companies in the EU.
3. Lithuania and Poland
   These countries strengthen their positions through fintech licensing and startup support. Company registration features in Lithuania and Poland include a focus on regulatory predictability, access to fintech infrastructure and European grant programs. For some COREDO clients, Lithuanian and Polish structures become a base for fintech licenses and AML/KYC-intensive businesses.
4. Singapore
   Registering an IT company in Asia is often associated with Singapore. For startups and scalable products, the features of registering startups in Singapore include a low entry threshold, a fast process via ACRA and BizFile+, a supportive tax environment and R&D support programs. Regulators actively work with fintech and AI, and the country offers a developed banking infrastructure for IT businesses and access to Asian markets.
5. Tax residency and reporting
   In the EU, not only rates are critical, but also the criteria and definition of tax residency. In COREDO practice we regularly explain to clients that the physical location of management, place of management and location of mind and management can affect where a company is considered a resident. This is directly related to corporate reporting and audit and affects the effective tax rate.

Substance requirements and compliance with international standards

From 2026 regulators take an even stricter approach to formal structures. Substance requirements (requirements for economic presence) are becoming not just a recommendation but a mandatory condition for access to tax benefits and international banks.

1. What is substance and why is it needed
   Substance requirements for IT companies – это не только офис и местный директор. Это реальное управление из юрисдикции, локальная команда, расходы, которые подтверждают экономическую суть. Практика COREDO подтверждает: банки и налоговые службы больше всего обращают внимание именно на соответствие деятельности заявленной модели, а не на красивую схему.
2. Substance implementation practice
   In some cases the COREDO team helps build a full-fledged R&D‑office in Europe, in others to create a management center in Asia while leaving the operational unit in another country. The main point is that the substance corresponds to the actual picture of the business and does not look like a formal shell.
3. AML/KYC procedures and international standards
   AML services for IT companies in 2026 are becoming not only a matter of licensing but also a matter of access to banking and payment systems. AML/KYC procedures must be embedded into the product: verification processes, transaction monitoring, reporting. For COREDO clients obtaining fintech licenses and AML/KYC‑dependent permits, we build a full compliance framework taking into account international AML standards and the requirements of specific regulators.
4. Digital compliance and cybersecurity
   For IT players, digital compliance and cybersecurity are becoming a separate criterion for choosing a jurisdiction. Regulators increasingly assess how the company protects data, what security protocols it applies, and how well processes comply with international data security standards.

Registering an IT Company in Europe and Asia: Process and Features

Once the criteria are clear, we move on to practice: registration of a legal entity in the EU or Asia. Here it is important to combine corporate law, requirements for participants and subsequent access to banking infrastructure.

1. Main legal forms
   In most cases COREDO uses analogues of a private limited company: s.r.o., limited, GmbH‑types. For the IT business, limited liability, a clear share structure, the ability to attract investors and option programs are important.
2. Founding documents and composition of participants
   Requirements for the share of foreign participation, the presence of a local director, and requirements for authorized capital are important. In some countries there are separate rules for registering offshore and non-resident companies, but by 2026 low-tax jurisdictions almost always require enhanced substance.
3. Registration procedure in the EU and Asia
   In practice the COREDO team structures the process so that in parallel they proceed with: preparation of founding documents, KYC on beneficiaries, bank selection and formation of a legal opinion when registering an IT company abroad. In the EU we pay special attention to corporate law for IT companies: articles of association, corporate agreements, option programs, protection of minority shareholders.
4. opening a bank account for an IT company
   This is one of the most difficult stages. The legal aspects of opening an account with international banks include verification of the structure, beneficiaries, business model, AML risks. Our experience at COREDO shows: having a well-thought-out compliance package, documented business logic, AML/KYC policies and a clear source of funds critically increases the chances of successful account opening.
5. The role of legal opinion and legal support for IT business
   For many transactions and dealing with international banks a legal opinion is required: confirmation of company status, compliance of activities with legislation, tax residency. The solution developed by COREDO usually includes a bundle: legal opinion + tax opinion + a funds flow scheme understandable to the bank and investors.

Registration of startups and fintech companies

A special layer of requirements applies to startups and fintech players.

1. Startups in Singapore and Europe
   The specifics of registering startups in Singapore include a low entry threshold, a fast process at ACRA and a flexible innovation support ecosystem. In Europe, a number of countries (for example, Ireland, Lithuania, Poland) offer innovative tax regimes for startups in 2026, grants and acceleration programs. The COREDO team often builds structures where a legal entity in the EU is combined with an R&D centre and R&D support programs.
2. Fintech licensing
   Fintech licenses and AML/KYC are a separate matter. Payment institutions, e-money, forex, crypto services require licensing and a detailed AML framework. Requirements of CySEC and other regulators are tightening by 2026: the role of internal control, reporting and an independent compliance officer is increasing.
3. The impact of international AML and KYC on fintech
   The impact of international AML on IT companies is especially noticeable in fintech. Banks and payment institutions expect the client to have documented onboarding, monitoring and reporting processes. In COREDO’s practice we often see that the maturity of the AML/KYC system determines whether a company gets access to partner banks and payment providers.
4. R&D support programs and cooperation with universities
   Many jurisdictions in 2026 link tax incentives and state accreditation of IT companies to participation in R&D support programs and to IT companies’ support of universities and educational programs. For international structures, COREDO builds cooperation with universities into the strategy as a tool both for incentives and for access to talent.

Risks and consequences of changing jurisdiction for IT companies

In 2026, more and more clients come to us already after a first jurisdiction change and want to make the second one “painless.” It is important to honestly name the risks here.

1. Tax and legal risks
   Legal risks of changing jurisdiction for IT companies include possible taxation when transferring IP, revaluation of assets, recognition as a controlled foreign company, and a change in tax residency status. Legal consequences of changing jurisdiction may also affect contracts: change of applicable law, the need to reissue or re-execute contracts, licenses and IP rights.
2. GDPR and international data protection
   When operating across borders, the influence of the GDPR on choosing a jurisdiction for an IT company becomes decisive. If the primary customer base is in the EU and data are processed outside the EU, it will be necessary to build a complex GDPR and international data protection framework by adopting standard contractual clauses, adapting the privacy policy and technical measures.
3. Corporate structures, trusts and funds
   For mature IT groups we often use corporate structures such as holdings, sub-holdings and the use of trusts and funds within the IT business structure. This allows separating operational risks and IP ownership, protecting assets and simplifying investor attraction. But when changing jurisdiction any structural changes require careful assessment from the standpoint of international law and taxation.

Choosing a jurisdiction for an IT company in 2026

To turn analysis into action, at COREDO we use a clear algorithm.

1. Algorithm for choosing the country of registration
   • Formalize the business model, client geography, and planned markets.
   • Determine licensing requirements (including which fintech licenses IT companies need to operate in the EU and Asia).
   • Establish criteria: tax burden, substance requirements, access to banks, data regulation, investment attractiveness.
   • Conduct due diligence on jurisdictions for IT companies in 2026 based on these criteria.
   • Model scaling of the IT business through international structures and scenarios for a possible change of jurisdiction.
2. Assessment of investment attractiveness and ROI of jurisdictions
   Investors care about reporting and transparency requirements, predictability of regulation, and clarity of corporate governance. The COREDO team often prepares comparative analyses: tax changes in 2026 and their impact on IT businesses, requirements for financial reporting and auditing in the EU, and the impact of ESG and sustainability on IT companies in a particular country.
3. Comprehensive legal and financial support
   Financial support and legal consulting become not a one-off project but an ongoing function. COREDO’s practice shows: companies that regularly review their structure, compliance, and tax burden cope more easily with regulatory changes and enter new markets faster.
4. Digital nomad visas and migration programs
   For distributed teams, digital nomad visas and migration programs for IT specialists are relevant. They affect founders’ personal tax residency and substance possibilities: sometimes it’s easier to carefully move part of the management to a country that offers clear rules for digital nomads and freelancers.
5. Optimization of insurance contributions and taxes
   In some structures, it is the insurance contributions and their optimization that significantly affect the effective tax rate. The COREDO team often designs models where part of the team is employed in jurisdictions with more flexible regimes, while maintaining compliance with local labor and social legislation.

Conclusion: what to rely on in 2026

By 2026 the question of how to choose a jurisdiction for an IT company is no longer about the «top‑10 countries with low taxes», but about building an international structure that takes into account: tax regulation of IT companies in 2026, substance requirements, international AML and compliance standards, GDPR and digital compliance, as well as long-term investment attractiveness.