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Linaisembourg wrote:

(Could you clarify what you mean by business / VAT tax arrangement?

In Linaisembourg, all businesses are taxed on their income made in Linaisembourg through our corporate tax. Regarding the mine, all natural resources in Linaisembourg are nationally endowed, and so a foreign mine cannot open up in our country.

What I mean is, when someone buys a product in a Madri-government backed business in Linaisembourg. They pay a sales tax, whatever the Linaisembourg tax is. Then, normal businesses pay a tax to Linaisembourg. These ones however, pay a tax to Madrinpoor and Madrinpoor pays Linaisembourg for the tax that the businesses need to pay. The tax in Madrinpoor is higher than in Linaisembourg, but businesses are VERY deregulated, with the only regulations being environmental ones and some wage laws. Businesses have to follow Madrinpoor's regulations, and pay a tax to Madrinpoor, and then the Madri government pays back what the businesses owe to Linaisembourg. That means that Madrinpoor gets some extra profit from the difference in taxes, the businesses get to enjoy fewer regulations and corporate protections granted by Madrinpoor, and Linaismebourg gets more employment, therefore a win-win for everyone.

If you don't like that we can just be normal and have Madri businesses just open in Linaisembourg. But most businesses in Madrinpoor are subsidized in some way, so it would be convenient for them to follow this arrangement.

Regarding the mine, darn.