LLC Company in Europe
- Thread starter climbwave
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Thank you. Do I need to report the LLC in any way?
Also the profit distribution would be 20%?
As far as I know, managing an LLC from Estonia shouldn't be an issue. Are you aware of any other countries with similar policies? To my understanding, it's only Cyprus and Malta.
Also the profit distribution would be 20%?
As far as I know, managing an LLC from Estonia shouldn't be an issue. Are you aware of any other countries with similar policies? To my understanding, it's only Cyprus and Malta.
Your question isn't clear. Are you planning to move to Estonia yourself?
If you introduce a holding company, I believe there are also changes to the taxation, but I don't remember exactly.
Neither Cyprus or Malta have distribution-based corporate taxation, but I believe Georgia and Kazakhstan have implemented something similar.
If you introduce a holding company, I believe there are also changes to the taxation, but I don't remember exactly.
Neither Cyprus or Malta have distribution-based corporate taxation, but I believe Georgia and Kazakhstan have implemented something similar.
Yes,
Me I have an LLC and looking to understand what would be if I move in Estonia. EU resident.
Me I have an LLC and looking to understand what would be if I move in Estonia. EU resident.
Estonia doesn't have management and control test for corporate tax residence, so an US LLC cant be tax resident in Estonia.
Normally people run a local Estonian company and an US LLC together.
In theory LLC could be taxed based on PE (permanent establishment) but even then only when profits are withdrawn from PE, so assuming profits are accumulated into an US LLC theres hardly any risk if you don't have any EU clients.
Normally people run a local Estonian company and an US LLC together.
In theory LLC could be taxed based on PE (permanent establishment) but even then only when profits are withdrawn from PE, so assuming profits are accumulated into an US LLC theres hardly any risk if you don't have any EU clients.
You can move to Estonia and only pay tax on money paid out by the company, but then your money would be stuck in the company. How will you get it out if you want to buy a house in the future, for example? Or make some other large purchase?
You also cannot close the company without paying the tax.
Hmmm, over here we were discussing SG offshore companies:
https://www.offshorecorptalk.com/threads/gibraltar-vs-bvi.44713/
Say someone was personal tax resident︄ Estonia (declaring Estonia their center of vital interest, maybe renting a cheap apartment), but not︅ actually spending time there or working there.
Wouldn't this mean that Estonia wouldn't be able︆ to tax the offshore company? I have also heard that PE rulings are extremely rare︇ in Estonia - basically the tax authority doesn't really go after PEs, at least not︈ for smaller fish. And if you're really not working from Estonia - how could there︉ be an Estonian PE?
It also seems like Estonian CFC rules only apply to corporate︊ shareholders? Not if you personally own the shares in the foreign corporation?
You also cannot close the company without paying the tax.
Hmmm, over here we were discussing SG offshore companies:
https://www.offshorecorptalk.com/threads/gibraltar-vs-bvi.44713/
Say someone was personal tax resident︄ Estonia (declaring Estonia their center of vital interest, maybe renting a cheap apartment), but not︅ actually spending time there or working there.
Wouldn't this mean that Estonia wouldn't be able︆ to tax the offshore company? I have also heard that PE rulings are extremely rare︇ in Estonia - basically the tax authority doesn't really go after PEs, at least not︈ for smaller fish. And if you're really not working from Estonia - how could there︉ be an Estonian PE?
It also seems like Estonian CFC rules only apply to corporate︊ shareholders? Not if you personally own the shares in the foreign corporation?
If I withdraw profits from my LLC and distribute them to myself, would I be subject to a 20% tax? Does it make sense to have︀ two LLCs or not?
Yes, normally personal income is taxed at 20%, but there are exceptions.
For example, gifts are not taxable for Estonian tax residents and such income doesn't even need to be declared, so if distributions can be treated as gifts there is no tax.
For example, gifts are not taxable for Estonian tax residents and such income doesn't even need to be declared, so if distributions can be treated as gifts there is no tax.
Yes, if you distribute dividends, there is 20% tax, but it is calculated on the gross amount.
So in order to pay out 80k after tax, 100k has to be distributed and taxed.
So if you want to receive 80k, 20k tax has to be paid, which is 25% of 80k.
I believe there was a reduced rate if you distribute dividends frequently, but I don't remember the details...
Probably not, but you should check with an accountant.
So in order to pay out 80k after tax, 100k has to be distributed and taxed.
So if you want to receive 80k, 20k tax has to be paid, which is 25% of 80k.
I believe there was a reduced rate if you distribute dividends frequently, but I don't remember the details...
Probably not, but you should check with an accountant.
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