Best management location for US LLC

[Marzio]

Gibralter needs a very good reason to declare company tax resident.

If the resident non domciled company wouldn't have the tax residency certificate then they could go⁢ after him claiming that since it's not tax resident anywhere then it's fair to assume︀ it's tax resident in Gibraltar.

Gibraltar isn't know to be an aggresive jurisdiction or at︁ least i don't know anybody that says otherwise.

https://www2.deloitte.com/content/d...nts/Tax/dttl-tax-gibraltarhighlights-2024.pdf

This is not about hybrid mismatch but internal rules (this table is from UK internal manual)

But why would they?

Investigations cost money and they need a︉ reason to go after somebody.

Would you, as a tax agency, go after a random︊ guy that cross the Spain border just for fun?

For them he is a ghost,︋ he doesn't have anything in his name in Spain, he doesn't exists.

Of course he can but going back every night︎ to Gib is safer.

Did i misunderstand you or are‌ you saying that going back to sleep in Gibraltar every day is not legal?

 

[JustAnotherNomad]

That would be good.

Looks good as well.
https://www2.deloitte.com/content/d...nts/Tax/dttl-tax-gibraltarhighlights-2024.pdf

A hybrid mismatch is always about internal rules?
A hybrid mismatch happens when the internal⁤ rules of both countries lead to some profits not being taxed at all (double non-taxation).⁣

For fun? No. But if I︀ as a tax inspector get paid a commission for how much tax I can get︁ (which they do in Spain) and someone looks like a good target for me, for︂ sure.

Like I said, he can do︄ that from Malta.

Yes. But then as well, the question could arise︆ if the company isn't tax resident or has a PE in Spain.
He probably doesn't︇ work for the company in his sleep...

Of course it's legal to sleep in Gibraltar, and probably his personal tax︉ residency would be Gibraltar in that case.
But that doesn't mean Spain couldn't try to︊ tax the companies in some way.
Would he be able to fly under the radar?︋ Most likely. But would Spain really be unable to tax the company? I'm not sure.︌

 

[Marzio]

I don't see‍ the payment of dividends from the Maltese company to a Gib holding resulting in a⁠ double deduction or a tax deduction without inclusion of some sort.

The fact that the⁤ Maltese income is not taxed because it's not remitted in Malta it's only about Malta,⁣ not about a mismatch between Malta and Gibraltar.

Well if you are paid on a commission basis would you concentrate on︁ high profile targets or a random chap crossing the border in Gibraltar?

If you want︂ to put bread on the table you would concentrate on Shakira.

Of course if he︃ rents a limo and drives around in Marbella screaming "hacienda de mierda" could attract some︄ unwanted eyeballs.

I don't know what kind of work he does but unless he is︅ closing contracts on behalf of the Maltese company there's no PE of any kind in︆ Spain and even if that would be the case, how in the world could you,︇ as tax agency, identify such PE?

Right now it's pretty mich impossibile imho.

 

[JustAnotherNomad]

If the US LLC is tax resident in Malta, no.
I was talking about a case where they don't accept the substance in Malta.
But you're⁠ probably right, if it is seen as opaque, then the US LLC should be paying⁤ corporate tax in Gibraltar, it would not be a hybrid mismatch.

I agree.︀

But he could fly under the radar in Spain with︅ a paper residency in Malta as well.

You just claim something and let him fight the decision in court.
I'm not︊ saying it will happen, just that this is not necessarily 100% waterproof.

 

[Marzio]

That's the difference right there:
1. Malta is paper‍ residency
2. Gibraltar real residency

By going back to sleep in Gibraltar and having his⁠ passport scanned he is building his proof just in case anybody will question him.

As you surely know this is a spectrum, there are various degrees⁣ of risk involved.

He could lower the risk by lowering the time spent in Marbella⁢ by only going every other day or spending only weekends and holidays.

 

[Anonymous1234]

Wow, amazing discussion. I have 3 kids as⁢ well lol. Definitely cannot send them to school in Spain. I'm by default a tax︀ resident then.

As far as gib company with director in Malta and managed from Malta︁ is the best solution. Also can be a US LLC, with managed from Malta and︂ director in Malta. I am not signing any contracts, I have a IP holding company︃ plus an investment company which invests capital and generates a mix of capital gains and︄ passive income from trading.

Gibraltar is still a non cooperative jurisdiction as per the Spain︅ tax law if I am not wrong.

 

[Marzio]

I don't know how easy would it be to⁠ find a bank for a non resident GIB company.

US LLC has way more options⁤ when it comes to banking.

Then GIB is a no go for you as CFC︀ rules will kick in at 75K passive income.

 

[Anonymous1234]

US LLC managed from Malta is the ultimate solution for banking and tax optimisation purposes‌

 

[JustAnotherNomad]

Usually if it's not an "artificial arrangement",‍ the company may escape the CFC rules.

 

[Marzio]

If it's not too much of a hassle could you‍ please ask your lawyer:

1. if a LLP could also be used for the resident⁠ non domiciled company strategy
2. what are the requirements for the resident non domiciled company⁤ to get a tax residency certificate.

 

[JustAnotherNomad]

Why the holding company btw? If Gibraltar views US⁠ LLCs as opaque and the company is clearly resident in Malta, he should be able⁤ to just receive dividends directly from the US LLC as a tax resident of Gibraltar?⁣

 

[Marzio]

Since @A1988 has a EU‌ passport he can't stay in GIB without a working presence so the company serves that‍ function primarily.

 

[daniels27]

I assume that Singapore + Malta would also work⁤ as you suggested for another a bit more complicated setup:
https://www.offshorecorptalk.com/threads/.46412/#post-326869

 

[Marzio]

Yes, i completely forgot about SG non resident company!

US LLC will still be the leanest‌ vehicle as it doesn't require any local director or secretary.

@daniels27 how easy is to‍ to get a SG bank account for a SG non resident company?

I assume that⁠ since the SG company is not resident, remitting money in SG will not trigger any⁤ taxation event.

 

[daniels27]

Any revenue remitted⁠ to Singapore will be subject to taxation there. Hence you may want to avoid this⁤ at any cost.

I am not sure about EMIs registered in Singapore, how︀ they are treated. Maybe, you can use a US bank account of an EMI (but︁ most are registered in Singapore). Also what about PayPal revenue? Maybe you need to add︂ a US LLC on top for banking?

 

[Marzio]

You're right! I supposed that a non resident company wouldn't be taxed in SG.‍

 

[JustAnotherNomad]

That's the beauty of it: Most civil-law countries consider companies resident by default, on the‌ basis of incorporation.
Some common-law countries like Singapore don't have such rules, for them, tax‍ residency is determined by where management is located.
I have heard lawyers from civil-law countries⁠ advise against running such companies as a nomad, as the tax residency of the company⁤ would be unclear (no fallback to the country of incorporation).
But with Malta, this should⁣ work well, and you probably wouldn't even have to go through a lengthy process of⁢ making the company resident in Malta under a treaty, as it would be viewed as︀ resident in Malta under the domestic law of both countries.

 

[daniels27]

Yes, but you could just not remit it and then it‍ would work?

 

[Marzio]

Yes it would work wonderfully like @JustAnotherNomad just said, i was only‍ hoping to use the excellent SG banking system 😛

 

[FZSAAS]

How about UAE FZCO and LLC, with 95% of business in rest of the world‌ and only 5% retained?