The term of traffic arbitrage
Traffic arbitrage (or advertising traffic arbitrage) is a type of Internet marketing activity that involves buying and reselling Internet traffic for profit.
Arbitrageurs purchase traffic on one platform (for example, through contextual advertising, social media, or other advertising channels) and redirect it to other resources where they can maximize its value.
When opening a traffic arbitrage company in Ukraine, entrepreneurs may face a number of restrictions and inconveniences, including high tax rates, complex bureaucracy and regulation, as well as possible tax audits, especially considering the fact that this activity may have quite high cash turnover.
At the same time, foreign jurisdictions, especially those that offer tax incentives and a more favorable online business environment, may present a more attractive alternative.
- Lower tax rates: Many foreign countries provide incentives for online businesses and innovative companies, which can significantly reduce the tax burden. In Ukraine, however, the tax system is more complex and requires additional efforts to comply.
- Favorable legal environment: Foreign jurisdictions can provide more flexible legal frameworks for businesses, which in turn provides greater protection for the interests of entrepreneurs.
- Lack of bureaucracy: Registering and doing business in Ukraine may be accompanied by bureaucratic procedures, which may increase time and financial costs. Foreign jurisdictions, especially in countries with developed digital economies, usually provide simplified procedures for online activities.
- Fewer tax audits: Ukraine is subject to regular tax audits, and recently online activities have become a major crosshairs of tax officials, which becomes an additional risk factor and inconvenience for businesses. Foreign jurisdictions can offer a more predictable and stable environment for doing business.
- Ability to operate online: In many countries, foreign entrepreneurs can conduct business entirely online, which simplifies the process and reduces the operational costs of maintaining offices, employees, etc.
- Global nature of activity: If it is necessary to conduct business on a global scale, registration of a company abroad will provide more convenient conditions for interaction with international counterparties and clients.
- Diversity of currency transactions: Doing business abroad allows you to work with different currencies, which opens up opportunities for foreign exchange gains when converting proceeds into more stable or favorable currencies. Also, utilizing currency differences can significantly increase the margins of operations as there is an opportunity to buy traffic at a lower price and sell it in higher value countries.
- European address: Many advertisers prefer to work with companies that have a European address due to high standards and reliability. In addition to status, having an EU address simplifies identification processes on global online advertising platforms, which is important for closing deals and participating in programmatic traffic arbitrage networks.
Where is the best place to set up a company for traffic arbitrage?
Choosing where to establish a company in the field of traffic arbitrage depends on many factors, including tax policies, legal infrastructure, availability of online platforms and other business factors. Considering these factors, our experts recommend considering several countries that are the most favorable for running a traffic arbitrage business: England, Cyprus and Estonia.
The UK is a developed country with low levels of corruption and predictable legislation. The tax burden here will be from 19%, but there are incentives for small businesses. An English company can operate worldwide, which is convenient for arbitrageurs working with different geo. Registration of an arbitration company in the UK certainly increases the confidence in the business from partners and clients. The incorporation procedure is one of the simplest in the world and not costly.
Cyprus provides favorable conditions for registration of a company in the field of traffic arbitrage, combining tax advantages (12.5%, - profit tax), convenience of doing business (no requirements for permanent location on the island, ease of changing the structure of the company), access to international markets and to highly qualified specialists in the field of marketing and information technology. Also due to its extensive network of double tax treaties, Cyprus can be an effective tool to minimize the overall tax burden. A company can be set up remotely.
Estonia is a country with a developed IT infrastructure, which is a plus for arbitrageurs who use online tools. The highly developed digital infrastructure of this country greatly facilitates online business and provides access to electronic services. Income tax in Estonia is 0% if you do not withdraw money from the company, otherwise it is 20%. Company registration is quite simple and does not require personal presence.
Overall, choosing a country to incorporate a traffic arbitrage company depends on your priorities, preferences and business model. Each of these countries offers unique advantages and of course there are minor disadvantages, and it is important to thoroughly research all aspects before making a decision. We also recommend taking into account possible changes in legislation and tax policies that may affect the business in the future. Therefore, seek the assistance of specialized lawyers before selecting countries for company registration.
Legal support of arbitration business abroad
Our company specializes in providing comprehensive turnkey support of arbitration business. We provide a full cycle of services, starting from company registration and ending with support of key aspects of your business. The package solution includes the following services:
- Providing advice on the choice of jurisdiction.
- Full support of the company registration process in the chosen country.
- Preparation of necessary documents and carrying out all necessary procedures.
Opening an account:
- Assistance in selecting a bank/payment system for opening a corporate account.
- Providing advice on requirements and procedures for account opening.
- Supporting the account opening process.
- Advice and preparation of documents for obtaining VAT.
- Supporting the process of obtaining VAT in accordance with the legislation of the country of registration.
- Bookkeeping in accordance with local standards and requirements.
- Preparation and submission of annual reporting to tax authorities.
- Audit of financial statements if necessary.
- Ensuring compliance with tax legislation.
- Advice on legal issues related to arbitration business.
- Drafting and auditing of contracts providing legal protection of your business.
We strive to provide our clients with everything necessary for successful arbitration business, providing professional and reliable support at every stage. Please contact us!