The education sector is an important one for any country, and that is why most governments offer incentives in various forms to help business in this sector grow and flourish. An English language franchise business can in its infancy, and even after years, benefit from the incentives offered by the government. These incentives can be in the form of a tax cut, rebate, subsidy, funding assistance or preliminary support in establishing the business. Below are examples of how an English language business can receive help from governments in different countries.

1. China

Though the corporate tax rate in China is 25%, it can be reduced to 15% in case a business fulfills certain criteria. In China, incentives are not given in the form of grants, but tax benefits. Therefore, companies can benefit from many types of taxes levied such as value added tax, customs, and income tax. Companies located in the five Special Economic Zones (SEZ), and special sectors and regions receive the most benefits.[i] Additionally, the government of Xi’an city offered incentives, including measures for supporting small and medium-sized enterprises, and preferential policies for widening the channels of investment and financing for the Xi’an, the capital of Shaanxi Province in central China.[ii]

2. Australia

The Australian government, state and territory governments offer various kinds of assistance to new businesses, which vary according to location, industry, and the nature of the business activity. Austrade is the first point of contact for all investment enquiries made in Australia. Working in partnership with Australian state and territory governments, Austrade offers coordinated government assistance to attract and facilitate FDI into the country. Various programs by the government such as the SME Growth Program[iii], and other grants and funding assistance offered by the different governments help new businesses to flourish in a supportive environment.

The New South Wales government, for example, established StudyNSW to increase the number of international students studying in NSW and offers organisations contemplating investing in the NSW education sector a wide array of options, including joint ventures with NSW tertiary institutions for student exchange programs.[iv] For Canberra, an international education strategy has been launched by the government to support Canberra’s education industry, one of its most important industry sectors.[v]

3. France

In Europe, Paris attracts the maximum FDI projects in the EU.[vi] France has established an agency called ‘Invest in France’ to draw foreign investment. This has greatly helped the country to increase its FDI. The French Government also undertook various economic reforms that enhanced the French Economy and attracted more foreign investors in the country especially in Paris. Foreign investors had to face less interference than before and also get lots of investment incentives.

The French Government has implemented different measures to increase its foreign investment. These are implementation of a EUR 20 billion corporate tax credit programme, and the elimination of a corporate social solidarity tax to attract investors; the creation of a research tax credit and tax incentives for innovative new companies, and the creation of new labour laws which strengthen vocational training and add elements of flexibility to the French labour market.[vii]

4. Indonesia

Indonesia’s Ministry of Finance offers corporate income tax reduction of 10% to 100% for the first five to 15 years of business activity to businesses under certain conditions.[viii] The duration of tax reduction can be extended to 20 years if it promotes national interest. Other tax incentives offered by the Ministry of Finance include tax rebates for business operating in Special Economic Zones and the Integrated Economic Development Zone. Some of these tax incentives include exemption from VAT and LST, postponement of import duty, and exemption from excise.

5. Portugal

Usually, it takes only 46 minutes to set up a business in Portugal.[ix] Extremely business friendly, both foreign and domestic businesses are treated the same way. Foreign and domestic companies receive various incentives based on the type and amount of investment. Businesses that hire employees under the age of 30 get an increased salary tax deduction of 50% of the salary expense.[x] Companies are based in specific areas get their corporate tax reduced to 15%.[x] For new businesses in such areas, the corporate tax rate is 10% for the first five years, and if the company creates permanent jobs in these areas, they can deduct an additional 50% of social security payments.[x]

The Portuguese Agency for Foreign investment and Commerce, the IAPMEI, and the Institute for Support for Small and Medium enterprises are government agencies that offer vital support to new business.

 

Sources

[i] http://www.worldwide-tax.com/china/chi_invest.asp

[ii] http://www.xdz.com/doing%20business/incentives/2014-07-16/264.html

[iii] https://www.business.act.gov.au/grants-and-assistance/grants/sme-growth-program

[iv]https://www.industry.nsw.gov.au/invest-in-nsw/industry-opportunities/education

[v]https://www.business.act.gov.au/resources_and_networks/international-education-strategy

[vi] http://www.investineu.com/content/invest-paris

[vii]   https://en.portal.santandertrade.com/establish-overseas/france/foreign-investment

[viii] http://taxsummaries.pwc.com/uk/taxsummaries/wwts.nsf/ID/Indonesia-Corporate-Tax-credits-and-incentives

[ix] https://investineu.com/content/invest-portugal

[x] http://www.worldwide-tax.com/portugal/por_invest.asp