Best country / setup to minimize tax? (software biz, ~400k, eu)

[banafinfodafuggiano]

You're complaining about a 8% Tax in Hong Kong and a︀ $500 monthly fee for accountants?

I'm from Canada and I pay $2,000 USD a month︁ in book keeping, 25%+ Corporate Tax and almost 47% in Income Tax.

What the guy︂ is getting in Romania is a big deal and he doesn't even even know it.︃

 

[daniels27]

I think what I was trying to say was‍ that many Chinese factories I know are still the Hong Kong agents but with BVI⁠ companies. They all shifted when Hong Kong introduces mandatory audits. We used to pay a⁤ bit more than 8.5% tax in Switzerland with no cap and no audit just a⁣ couple of years ago.

Yes, I know. But I had a good friend. she was living in France︁ and paid 300 EUR for the summer kids day care for the whole 3 months.︂ Her brother paid 30k HKD per month for the same service. Taxes in Canada are︃ high, but at least you also get quite a lot for it.

Same as above. He gets a good deal for himself.︅ But not for the kids. And it is a problem for the society too.

But yes, I totally agree with you. If you don't have family and are not employed︆ in a normal position, you just don't get back enough to justify the high taxes.︇

 

[JohnLocke]

Sorry I don't get this, but you mean the agent shifted to⁣ an BVI company?

Why would they not want the audits, like everywhere else you run⁢ a company it is mandatory?

 

[Frank Funk]

Just had a call with a company who helps set up Panama entities, was recommend‌ to me by someone I trust so think it's a solid option.

I would offramp‍ crypto, the process is 100% remote and includes:
- Creating a company in Panama, 7⁠ days
- Opening a company bank account, 30 days
- Opening a company account on⁤ Bitstamp or Bitfinex, 45 days

You also need a personal bank account but that's simple.⁣

Once set up, you send funds to the CEX, then to your company bank account⁢ and then to your personal bank account paying 5% tax.
Afterwards I plan to move︀ it to IBKR.

You do not have to have an employee, accountant or anything for︁ the company.

The service provider I spoke to handles the whole procedure, cost is $6'000.︂

Also interesting cause you can get residency - more paperwork and visits needed.

 

[daniels27]

Yes. I mean there are Chinese factories that⁠ have been operating Hong Kong companies with Hong Kong agents for years. Once a mandatory⁤ audit was introduced, the agents recommended to shift the company to BVI and many did⁣ so. The audit is between 1500 and 2500 USD per year, about the same as⁢ the BVI company costs.

I also talked to the big incorporating agents and most of︀ them also told me that it will be cheaper to run 2 Singapore companies with︁ both below the threshold than having to do the audit.

The main problem with the︂ audits in those cases is that the minimum fees are quite expensive, there are not︃ many willing to touch a company with less than 100 transactions for less than 1k︄ USD. I understand the importance of it once the company has substantial local turnover or︅ employees in order to avoid sudden bankrupcies. At this scale the audits are not just︆ redoing the bookkeeping, but in many cases like Credit Suisse, audits did not help to︇ stop problems from happening.

 

[Wellington]

BVI you have to do full blown accounting now…

 

[doomslayer123]

I wonder if you took out money from your PayPal, straight to your Romanian (RON)︆ bank account. If you did, it's no wonder they found out about it as all︇ RON and Romanian bank accounts are completely visible to ANAF ( RO tax office).

In any case, I agree dodging them is not a viable long-term strategy. Moving is. I︈ think Cyprus is not a bad alternative within the EU, but we'll see, there are︉ some nice alternatives outside of the EU as others mentioned as well.

About Andrew Tate︊ and his statement that in Romania corruption is accessible to everyone: Not to say Romania︋ is some corruption-free place, that would be ridiculous, but you certainly can't just flash a︌ bit of money around and do whatever you want as this guy thought. Very foolish︍ or at least naive guy to think that, when people with real wealth and power︎ (prime ministers, billionaires) like Adrian Nastase, Dan Voiculescu, Copos, etc did jail time.

I mean, it's kind-of tough to get excited about‍ getting "just a little" robbed (1/8 of everything you make) and getting diddly-squat in return.⁠
In any case, the current rate of robbery is insufficient according to OECD and IMF's⁤ recommendations to Romania, so it's gonna go up in 2025.

 

[JustAnotherNomad]

But how did you take the money out? The big issue with Switzerland is usually the‍ withholding tax on dividends.

 

[Marzio]

Yes, those cheese eaters‍ want money to stay in the country and not leave so you have two options:⁠

1. form a holding in a favourable jurisdiction but AFAIK you need to have some⁤ substance otherwise 35% WTH on dividends will still apply.

2. form a Swiss branch instead⁣ of a full fledge Swiss company so there are no WHT on profits sent to⁢ the parent.

 

[JustAnotherNomad]

Yes, hence my question.

I believe they are working on closing that loophole.

 

[Marzio]

What makes you think that?

In many countries branch profits aren't subject to WHT

 

[daniels27]

It was my own company‍ and I paid reduced personal income taxes on the dividends.

If you want to avoid⁠ the withholding tax on dividends, you need to run them through Malta, Ireland, Hong Kong.⁤

 

[DSoz]

This no longer works and you need to be at the same company for more than⁠ 2 years to be eligible via this pathway.

 

[JustAnotherNomad]

What's your source? And you can do it with your own company. Also, it probably doesn't‍ really matter because the first residency is valid for at least 2 years anyway?

 

[DSoz]

Source #1 : People who recently applied, go through⁠ all the comments
Source #2: Official AMER account confirming

It probably does matter because you⁤ need to COMPLETE 2 years in that company and that company has to have more⁣ than 10 employees, etc.

 

[DSoz]

Do you have an update on this? Have you done it,︄ does it still work?

 

[JustAnotherNomad]

There are different rules for different visa types.
The "company has⁤ to have more than 10 employees" is a very recent thing, I believe. It's an⁣ inofficial policy that definitely applies to golden visas for regular employees.
But I don't know⁢ if it also applies if you apply for a golden visa as a partner/investor in︀ a business. I believe that's a different pathway entirely.

 

[DSoz]

People with a partner/investor on⁣ their visa can't do this pathway anyways, as it's for employees or experts in the⁢ field. This salary pathway is for employees.

You need to have a manager title or︀ some other title on your visa to be eligible, and yes it is a very︁ recent development.

 

[freegeek]

if you want to do the fake residency︅ thing then it is best to avoid any country where you need to take a︆ boat or plane to get out because there are passenger lists even inside Schengen so︇ at the end of the day you are easily traceable. You need to make the︈ decision first if you want to stay in the EU/Schengen or go outside the EU.︉ I am more or less in the same position as you and looked at Poland︊ and Bulgaria. I am going to take Bulgaria because of the stable tax environment, Romania︋ is way to unstable when it comes to tax rules and I dont want that︌ headache of moving everu few years because they changed something. Yes you can have lower︍ taxes outside the EU but QoL is also important to me. Just like you I︎ am going to spend most of my time enjoying the Mediterranean lifestyle. Bulgaria is part️ of Schengen so you can easily roadtrip to the Med and stay under the radar.‌ In the end everything is a compromise and for me a 17% total tax rate‍ in Bulgaria is acceptable.

 

[daniels27]

Then leavee EU by‌ private jet tonight. Quality of life is better outside EU than inside.