Best Tax-Friendly Countries to Set up Your Adult Company in 2025
Find the best countries to establish your adult company in 2025. Optimize taxes and benefits with these top global destinations.
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The adult industry isn’t just growing—it’s exploding. With projections pushing past $700 billion by 2034, it’s one of the most profitable (yet controversial) industries in the world. But while the money is there, the business side isn’t as straightforward as people think. Taxes, banking, and regulations? That’s where things get tricky.
Governments love to tax the adult industry aggressively, banks treat it like a liability, and payment processors are quick to throw the “high-risk” label around.
The right jurisdiction means lower taxes, easier access to banking, and less regulatory drama. In this guide, we’ll break down the best tax-friendly countries to set up your adult company in 2025, so you can keep more of your profits and avoid legal headaches.
Why Choosing the Right Country for Tax Matters in the Adult Industry
There’s no sugarcoating it—the adult industry is a very profitable industry and fast-moving industry, while also being scrutinized more often and restricted faster than almost any other sector. Governments love the revenue but aren’t always eager to support the businesses generating it.
And that’s exactly why where you set up shop matters—a lot.
Here’s what you should be looking at before deciding where to register your adult business:
Legal Compliance & Regulations
The adult industry operates under a microscope in many regions.
Some countries have stringent laws that can stifle your operations, while others offer a more lenient framework. The best jurisdictions for adult businesses are the ones with clear, predictable, and business-friendly regulations—not places where you’re constantly worried about a sudden policy change shutting you down.
Incorporate your company hassle-free with expert guidance and maximize tax benefits from day one.
Tax Optimization
Let's face it, nobody enjoys paying more taxes than necessary. Certain countries provide corporate tax benefits that can significantly reduce your overall expenses. By establishing your business in a tax-friendly jurisdiction, you can retain more of your hard-earned revenue.
Banking & Payment Processing
Finding reliable banking solutions can be a nightmare for high-risk businesses like those in the adult sector. The right jurisdiction can offer better access to merchant accounts and payment processors, ensuring your transactions run smoothly.
Need to make sure your transactions don’t get blocked? We’ve covered it in detail in our article about securing your high-risk payment processing. And for a better understanding of why your business is classified as high-risk in the first place, our guide on high-risk merchant accounts breaks it down.
Best Tax-Friendly Countries to Set up Your Adult Business in 2025
If you're running an adult business, the last thing you need is a government that treats your company like an unwanted guest or a tax authority that thinks 50% of your profit belongs to them.
Finding the right country isn’t just about tax savings (though that’s a big one)—it’s about making sure you can operate without constant banking headaches, payment processor rejections, or surprise legal obstacles.
We’ve done the research, crunched the numbers, and spoken to industry experts to break down the best tax-friendly jurisdictions for adult businesses in 2025. Whether you’re looking for low taxes, banking stability, or strong privacy protections, here’s where you should be incorporating.
Malta
Malta might be a tiny island in the Mediterranean, but when it comes to business-friendly tax policies, it punches well above its weight. Its strategic position in the Mediterranean, coupled with a favorable tax regime, makes it an attractive destination for entrepreneurs in the adult industry—and for good reason.
Tax benefits
At first glance, Malta's standard corporate tax rate of 35% might raise an eyebrow. But here’s where it gets interesting: Malta operates a tax refund system that effectively reduces the tax burden for many businesses.
If your company is owned by non-residents, you can claim up to 6/7 of the tax paid back, which brings your effective tax rate down to just 5%. That’s lower than some of the so-called “tax havens.”
Malta also actively encourages investment through various tax incentives like :
- Seed Investment Scheme: Investors can get a 35% tax credit (up to €250,000) for funding eligible startups.
- Business Start and Innovation Grants: Financial aid for businesses that show “innovation.”
Basically, if you structure your company correctly and take advantage of refunds and incentives, you’ll be paying way less tax than you initially thought. If maximizing tax efficiency sounds like your kind of business strategy, check out our guide on how to select the best tax structure for your adult business to see how to legally reduce your tax burden.
Withholding tax
Here’s a huge win for businesses operating internationally— Under the right circumstances, Malta does not impose withholding taxes on dividends, interest, or royalties paid to non-residents. That means if you’re routing profits overseas, you won’t have to worry about extra deductions eating into your dividend distributions, for example.
VAT & Other Considerations
- Standard VAT Rate: 18% (one of the higher ones in Europe, but exemptions apply)
- 5% VAT on ebooks, health-related products, and certain entertainment services
- Strong GDPR compliance, which is crucial for platforms handling customer data
If you’re after a low effective tax rate and a jurisdiction that understands digital businesses, Malta is an excellent choice. Just keep in mind: Malta does have strict regulatory compliance requirements, meaning you’ll need proper legal structuring and accounting to benefit from its tax advantages.
Cyprus
Cyprus has quietly become one of the best tax-friendly destinations for businesses, and if you’re running an adult company, you might want to pay attention. Between low corporate taxes, no withholding tax, and a business-friendly environment, Cyprus is a serious contender if you want to keep more of your hard-earned profits.
Tax benefits
Cyprus offers one of the most attractive tax regimes in the European Union, with a corporate tax rate of just 12.5%—among the lowest in the region. The country also provides zero tax on dividends received from abroad, subject to specific conditions, and imposes no withholding tax on dividends paid to non-residents.
Furthermore, it has favorable IP tax regime—if you’re in the content side of the adult industry, certain intellectual property revenues can qualify for an even lower effective tax rate.
Cyprus also boasts an extensive network of double taxation treaties with over 50 countries, including major economies such as Russia, China, the United States, and the United Kingdom. These agreements are designed to eliminate double taxation and streamline international business operations, making Cyprus an excellent choice for global enterprises.
💡 Fun Fact: The Cyprus government actively encourages foreign business investment, making it one of the easiest places in Europe to incorporate a company.
Withholding tax
Cyprus does not impose withholding tax on dividends and interest paid to non-residents. However, royalties earned on rights used within Cyprus are subject to a 10% withholding tax, unless reduced or exempt under a tax treaty. For royalties related to rights used outside of Cyprus, there is no withholding tax.
VAT in Cyprus
The standard VAT rate is 19%, but certain products/services qualify for reduced rates of 9%, 5%, 3%, as well as 0%. If you're offering subscription-based services or selling digital products, understanding VAT obligations is crucial—especially if you’re targeting EU customers.
If you’re curious about the benefits of doing business in Cyprus and want to learn more, check out our article on doing business in Cyprus – it’s a great read!
The Netherlands
If you’re looking for a tax-efficient, business-friendly European country that doesn’t shy away from the word “adult,”, the Netherlands is a strong contender. While it may not have the lowest corporate tax rate on this list, it makes up for it with strong legal protections, international banking accessibility, and favorable tax treaties.
Corporate tax
The Dutch corporate tax system has two brackets:
- 19% on taxable profits up to €200,000
- 25.8% on anything above that
That second number might seem high, but here’s why it matters—the Netherlands has one of the best tax treaty networks out there. With nearly 100 treaties, it helps cut down or even eliminate double taxation on things like income, dividends, royalties, and interest. If your adult business has an international structure, that’s a pretty big deal.
If you've been wondering how to set up your business efficiently, our guide on understanding Dutch corporate structures explains everything.
VAT considerations
The standard VAT rate in the Netherlands is 21%, but some products and services qualify for a reduced 9% rate and 0% rate (mainly to intra-EU supplies). If your business involves selling digital content, it's important to stay compliant with EU VAT rules, especially if you have international customers.
Incorporate your company hassle-free with expert guidance and maximize tax benefits from day one.
Withholding tax
The Netherlands does not impose withholding tax on interest and royalties paid to non-residents. However:
- Dividends paid to non-residents are subject to a 15% withholding tax, unless reduced by a tax treaty.
- As of 2024, the Netherlands introduced a 25.8% withholding tax on payments to low-taxed / blacklisted jurisdictions, so make sure your business structure avoids problematic jurisdictions.
Considering the Netherlands for your business? Check out our blog post on why should you register a company in the Netherlands to see if it’s a good fit.
Switzerland
When it comes to setting up an adult business, Switzerland might not be the first country that comes to mind. However, its reputation for political stability, robust legal frameworks, and a competitive tax environment makes it a compelling option.
Corporate tax rates
Unlike many countries that have a single flat corporate tax, Switzerland lets its cantons (regions) set their own tax rates, which means where you incorporate really matters.
Here’s how Swiss corporate taxes work:
- Federal corporate tax is 8.5%, but since it’s deductible, the effective rate is around 7.83% on pre-tax profits.
- Cantonal and municipal taxes vary—meaning your total tax rate can range between 11.9% and 20.5%. Some cantons, like Zug and Lucerne, offer lower rates to attract businesses. Others, like Geneva, are on the higher side.
VAT in Switzerland
The standard VAT rate is 7.7%, much lower than in most EU countries. If you’re selling digital services or subscriptions, this could be a plus. There are also reduced rates (3.7% and 2.5%) for certain goods and services, but they don’t really apply to most adult businesses.
Withholding tax
Switzerland does have a withholding tax, but whether it affects you depends on how you structure your business.
- Dividends: The standard withholding tax rate on dividends is 35%. However, relief is often available through tax treaties or the Swiss-EU agreement, potentially reducing the rate to 0% for qualifying related companies. Usually, you can get this relief through a refund process or, in certain cases, through a simplified notification procedure.
- Interest: No withholding tax on most interest payments, except in rare cases (like bonds or bond-like loans).
- Royalties: No withholding tax on royalties, making Switzerland an excellent option for companies monetizing intellectual property (like licensing content or trademarks).
Looking for a stable, privacy-focused place with potential tax advantages for your adult business? Switzerland might just be the perfect fit. But knowing where (and how) to set up your business properly is key. This guide explains how to navigate Switzerland’s company registration process, ensuring that your business is structured for success from day one.
Poland
Poland might not be the first place that comes to mind when you think about tax-efficient business setups, but if you’re running a small to mid-sized adult business, it can be an excellent option worth considering.
Corporate tax
Poland’s corporate tax structure is pretty straightforward:
- 9% CIT (corporate income tax) for small businesses – If your annual sales revenue (including VAT) stays below €2 million, you qualify for this lower rate.
- 19% standard CIT for everyone else
This means if you're just starting out or running a lean operation, Poland offers one of the lowest tax rates in Europe. However, if your company scales beyond the €2 million mark, you’ll be taxed at the standard 19% rate, which is still not terrible by European standards.
Withholding tax
Something worth mentioning about withholding tax: If you’re a non-resident pulling dividends from your Polish company, expect to pay a 19% withholding tax (WHT). Interest and royalties are taxed even higher at 20%.
However, if your home country has a double tax treaty (DTT) with Poland, your rate could be significantly reduced or even eliminated. Always check your tax treaty status before making financial moves.
VAT in Poland
Poland’s standard VAT rate is 23%, which is on the higher side for Europe. If your business involves selling digital content or subscription-based services, you’ll need to account for this when pricing your products. Some goods/services qualify for reduced rates of 8% and 5%, but most adult businesses will be dealing with the full 23%.
Romania
Romania has been a favorite for entrepreneurs looking for low taxes and affordable operations, but the tax reforms in 2025 have definitely changed the game. If you’re considering setting up your adult business there, you’ll need to keep an eye on the changing tax landscape.
Corporate tax
Romania has kept things simple with a flat 16% corporate income tax rate. It’s not the lowest in Europe, but it’s still lower than in many Western European countries. This applies to Romanian companies, foreign entities operating in Romania, and any business deemed a tax resident due to its management location.
So, if you’re running an adult content platform or a service-based business, this flat rate keeps things predictable.
Incorporate your company hassle-free with expert guidance and maximize tax benefits from day one.
Micro-enterprise tax
Romania has historically been a micro-business haven, offering some of the lowest tax rates in the EU. But now, the government is tightening the criteria, meaning fewer businesses will qualify for the micro-enterprise regime.
Here’s what changed:
- Revenue threshold cut in half—to qualify as a micro-enterprise, your annual revenue must be below €250,000 (and it's expected to drop further to €100,000 in 2026).
- 1% tax rate—if you have at least one employee.
- 3% tax rate—if you have no employees.
If you exceed the revenue cap, you’ll automatically switch to the 16% CIT rate. This means you must track your revenue carefully if you want to keep the micro-enterprise benefits.
VAT in Romania
Romania’s standard VAT rate is 19%, which is in line with much of the EU. Certain services and products qualify for lower rates of 9% and 5%, but most adult businesses will be dealing with the full 19%.
Overall, Romania is still a solid low-tax option, especially if your business falls under the new micro-enterprise rules. FirmEU can assist you with making this determination.
Ireland
Ireland has built a global reputation as a tax-friendly hub, and for good reason. With its famous 12.5% corporate tax rate, a strong tech and digital economy, and one of the easiest setups for international businesses, Ireland is a serious contender for anyone looking to incorporate—including those in the adult industry.
Corporate Tax
Ireland's corporate tax rate of 12.5% applies to most active trading businesses, making it one of the lowest in Europe.
However, due to global tax reforms, companies with revenues over €750 million will be subject to a minimum 15% tax rate under the OECD’s Global Minimum Tax initiative. But let’s be honest—if your adult business is making €750 million+, you probably won't be worried about an extra 2.5% tax.
For everyone else, the 12.5% rate remains intact.
Non-trading income
It's important to note that passive income, like dividends from companies based outside Ireland, interest, rents, and royalties, is usually taxed at a higher rate of 25%. That said, some dividend income—especially from foreign trades—can still qualify for the lower 12.5% rate.
VAT in Ireland
Ireland’s standard VAT rate is 23%, which is on the higher side in Europe. If your business is selling digital subscriptions, content, or e-commerce products, you’ll need to factor this into your pricing for EU customers.
Bulgaria
When it comes to low corporate tax rates, Bulgaria often flies under the radar. But with a flat 10% corporate income tax (CIT), it's a great spot for entrepreneurs, including those in the adult industry.
But before you rush to incorporate, there are a few important details you need to know.
Corporate tax
Unlike countries with complex tax brackets, Bulgaria keeps it simple—a flat 10% corporate income tax on all profits.
- No progressive tax rates. No hidden complications. Just a flat 10%.
- Applies to all businesses operating in Bulgaria, local or foreign-owned.
However, starting in 2024, Bulgaria introduced a global minimum tax of 15% for large multinational businesses (those making over €750 million per year). But if that doesn’t apply to you, you’re still looking at that flat 10% rate.
Withholding Tax
Withholding tax in Bulgaria is lower than in many EU countries:
- Dividends to non-residents are taxed at 5%. However, if you’re a tax resident of an EU/EEA member state, those dividends are exempt from withholding tax.
- Interest, royalties, and service fees paid to non-residents are taxed at 10%.
For businesses with international investors, this is a big advantage compared to countries that hit you with 15-30% withholding taxes on dividend distributions.
VAT in Bulgaria
If your business involves selling digital content or subscriptions, Bulgaria’s standard VAT rate of 20% will apply. Some services, like tourism, qualify for a lower 9% rate, but don’t expect any discounts for the adult industry.
Final words
If you’ve made it this far, you’re clearly serious about setting up your adult business the smart way—where you keep more of your profits. We’ve covered some of the best tax-friendly countries for the adult industry, breaking down their corporate tax rates, incentives, and overall business climate. The truth is, the best country to set up a business for tax isn’t a one-size-fits-all decision.
And it depends on what you need—lower taxes, strong privacy laws, or easy access to global banking.
At FirmEU, we specialize in helping adult businesses find the best jurisdictions for incorporation, banking, and tax optimization. Whether you need help incorporating, finding a bank that won’t ghost you, or securing reliable high-risk payment solutions, we’re here to make sure your business is legally compliant and financially optimized.
Ready to make the smartest move for your business? Let’s build your future on the right foundation.
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