Where to incorporate an international startup?

Unless you're expecting an instant huge success I'd worry less about the tax issues, and figure out which country is

1. The cheapest starting out.
2. The lowest costs for bookkeeping.
3. The simplest rules for reporting.

The time and cost spent on those three will be way larger than your tax (in most western countries).

You can always reincorporate into something more efficient later on, when taxes are a bigger concern. Labour tax (or the like), which commonly is your largest tax share starting out, is likely going to have to be payed in the country of residence anyway.

Things I would think about are:

• Which location is the most tax effective?
• Which location has better legal protection?

I expect UK and Canada would be quite similar in these respects so I would also look at who will be doing the financials. It might be most convenient to locate in their locality.

You might also like to consider where you expect your customers to come from and what currency they will pay in.

Even you are not planning to seek for funding right now.

Offshore company is a good choice for your case.

Normally, you should take care about the followings:

1. Registration Fee
2. Account & audit requirements
3. Tax requirements
4. Bank Account & Money flow
5. Expected market
6. Requirement of company secretary

For the BVI, there are no requirement on bookkeeping, audit account and no tax levied on business outside BVI. You are only required to pay annual fee to maintain the company.

In addition, you company account can be open in country/ city with no exchange control (i.e. HK...).

Actually the key to this question is whether you are seeking funding or not?

If you are expecting to raise seed, A or B rounds you better consider where you think your investors will come from.

Generally USA investors like Deleware, Asian investors like BVI, Caymen...

Then you can make a local subsidiary in Canada or the UK.

If you would be looking for an investor at some point of your company existence try to think which country has better potential to secure funding from VC's or banks. Consider taxes, regulations and interest rates in that country.