Relocation to Portugal? Or maybe Malta or Andorra?

[ITexpert7]

> Seems like the PT company (for IFICI) + LLC is the most reasonable option‌ given the constraints and current income.

For NHR (IFICI in Portuguese) you do not want‍ or need a company in Portugal. NHR is 0% personal tax for foreign income. I⁠ have it myself, and find life in the Algarve much better than Spain.

 

[blast629]

Afaik, living in⁠ Malta without a car isn't a great idea.

I have been there, and the public⁤ transport is pretty much non-existent. The alternative is ofc, Uber and so on, but I⁣ always value the freedom of your own car.

Maybe a sort of this structure would⁢ make sense?

Person
US LLC A Holding
US LLC B (Operative) // European Company (Assets)︀

In this scenario, the LLC B would get the income and flow to the LLC︁ A.

The LLC A would make capital contributions to the European company. This EU company︂ could buy assets in Malta and make a use agreement on a low price?

(As an EU company probably a Cyprus company would work? Or maybe Estonia?)

Does this make︃ any sense?

Thanks again for the ideas!

 

[blast629]

The new IFICI is different than the old NHR.

I don't know⁣ if you are talking about the new NHR 2.0 (which is called IFICI) or the⁢ old NHR 1.0 (which was never called IFICI by the way). My guess is you︀ are talking about the old one. The new one has been just passed out and︁ first requests have started going on march this year.

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To apply for IFICI now︂ you need (it is mandatory) to be employed in Portugal.

In this way, you can︃ either find someone to hire you (or to fake it, I already saw some companies︄ do it at about 4k per year), or make your own company, be the CEO︅ and get certified as one of the IFICI alternatives.

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On the other side of︆ the things. Are you running with a US LLC in Portugal as well?

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And btw, what exact cities of the Algarve would you recommend?

Thanks!!

 

[Marzio]

Whit supermarkets delivering food to your door and the fact that all the action is around‌ St. Julians / Sliema where do you want to go with a car?

Not only‍ traffic is crazy but they also drive like UK so everything is in reverse.

You can pretty much move around by walk and or electric bike.

Also, since the weather⁠ is mostly sunny get a motorcycle if you really want to escape.

 

[ITexpert7]

Hi, I did not know︂ that for NHR 2.0 you need to be employed or self-employed.

It's not clear: https://www.mlgts.pt/en/knowledge/l...for-scientific-research-and-innovation/25760/

In that case, I would do the self-employed if I was you, as it's much︃ simpler and cheaper, I did it. 1st year no social security and 10% tax on︄ 70% of income! If you are under 35 they have even better deal for years.,︅

About areas, Algarve is quite small. Tavira is very close to Spain and cheaper for︆ property. Faro and surrounding area is very near the lovely airport. Albufeira is very touristic.︇ More west becomes a bit cheaper, but windy. Windy Lagos which is 1 hour from︈ airport is for some reason expensive. The more west you go the colder it gets,︉ in weather and sea temperature, big difference. Properties are most expensive by the coast as︊ they are used as AirBnBs. I saw 120 properties before I bought.
Good forum for︋ Portugal: https://expatsportugal.com/

 

[blast629]

Pretty much because the idea would be to live outside of that⁣ mega crowded places for a more "quieter" day to day, even if want to come⁢ on weekends or curtains day to the "crowd".

Probably Rabat, which is near to Medina.︀ Seems a much "enjoyable" sort of village day to day (already went there and liked︁ much more the vibes than the super crowded zones, at least for my everyday life︂ I mean).

Anyhow, I am still curious. Is there any reasonable structure to be paired︃ with MT non dom that might be worth to have a look at?

I mean,︄ if I truly like it there, I wouldn't mind buying a property in the middle︅ of nowhere and establish there.

That is why I am also accounting that!
The problem of opting for‍ the tax incentives of the youngs is that afaik, they are not compatible with IFICI,⁠ which means you would be taxed also on dividends.

I checked the youngs tax exemptions⁤ as well in the past, but it is really a "short term" solution to my⁣ eye, since you will be paying more and more year by year.

What is your⁢ setup btw if I may know? Are you a "sole self-employed"?

Thanks again!

 

[Marzio]

If that's your cup of tea i highly suggest you to look at Gozo.

More laid⁠ back than Malta, more green, less crowd, better beaches in summer.

I don't know⁢ if funding a MT LTD with offshore capital is technically a form or remittance. If︀ not then here you go, you fund a MT LTD with capital and the LTD︁ buys the property.

Having said this, with your level of income i wouldn't buy anything.︂

Especially in Malta where real estate is overpriced.

 

[blast629]

Problem I see with Gozo is that it is far too small. I‍ prefer to be on the Malta island (if price is reasonable), so if wanna move⁠ just a bus or taxi is needed, not a boat.
I was thinking of︁ a non MT company (therefore CY or Estonia or whatever)... Since a MT company looks︂ more like it would trigger the remittance, since you need to bring the money to︃ constitute it as capital... But it is foreign, maybe it would work...

Great discussion btw!!︄ Getting lot of ideas of what to do/not to do!!

Thanks!

 

[drumtraks]

As long as you are able to receive‍ mail at the incorporation address (or be forwarded to you) it's fine. This address will⁠ be used by authorities to reach you. That's all. There is no legal requirement that⁤ you live where you incorporate. You and your company are two different juridical persons.

 

[blast629]

Problem is the⁤ PEM as far as I know: place of effective management.

Aren't you into more risks⁣ with a Madeira company than with an offshore company?

I mean Madeira is 5% on⁢ the "Zona Franca", which is better than Azores.

Anyhow, the issue is that you get︀ dividend witholding tax, which you don't get with an overseas company, which basically mean, except︁ you fully reinvest and plan to move a place with 0% dividends rate, or I︂ don't see the benefit of that setup?

Thanks for the ideas!

 

[drumtraks]

I was referring to you living in Portugal mainland and setting⁢ up a company in one of the islands. PEM does not apply, it’s all Portugal.︀

 

[blast629]

Are you entirely sure PEM does not apply?

As far as I know, for⁠ example Spain, does check this.

To the extent they event track across mainland provinces which⁤ may be some % less than others...

Does PT not control this? Would be surprising⁣ to me, since afaik PT is sort of "I don't wanna look" with NHRs, but⁢ Idk about PT companies...

Any idea in this regard or experience? Do you (or someone︀ you know) have a setup involving this?

Thanks!!

 

[drumtraks]

Hundreds, not to⁢ say thousands, of companies have their shareholders living on the mainland. And yes I have︀ first hand knowledge. Nevertheless I’m not your consultant so… you know the drill 🙂

 

[blast629]

That is interesting. Did not know in PT that⁠ was "allowed" 'de facto'. As I said, on Spain it is controlled even to that⁤ extent.

I know they are even relocating companies based on the assets the company have⁣ if the person is living near the assets... Imagine the level of control!

All in⁢ all, according to this, a virtual office/coworking + director in Madeira would be a more︀ "bulletproof" solution?

Surprisingly enough, even I checked with some consultants in the past, none of︁ them mentioned this possibility. They all focused either on IFICI, on the 12.5% CIT rule︂ of 50k on low density zones or in the young incentives. But never about Madeira/Azores.︃

That is why I first I found it surprising.

And btw, I know this is︄ a forum, not a formal consultation but... Since this seems interesting, do you know anyone︅ who may guide me to check in this direction?

Thanks again

 

[JustAnotherNomad]

There has been a court ruling that said income from a transparent US‌ LLC should be classified as dividends - but in that case, there was some substance‍ in the US (not sure if it was a multi-member LLC), so they were paying⁠ some tax in the US. I would expect that this would be quite different from⁤ you running everything from Portugal.

I would try https://nonhabitualtaxresident.com - no personal experience, but they seem competent.
Let us︀ know how it goes.

 

[blast629]

Yes, I knew this. Although as you⁣ point I think it was not a 1:1, because it was a multi member LLC.⁢
I got in touch with this firm︀ after getting on a talk with another advisor (Bruno Alfonso from taxesinportugal.com) who recommended them:︁ RPBA (Ricardo Palma Borges)

However they replied me (this was 1 month ago) they were︂ too busy and entitled me to another tax advisor, who is, precisely, the one I︃ was referring to as "the only one really knowing how to apply for IFICI" I︄ mentioned.

The RPBA colleague is who told me he would know for certain this month/begining︅ of may, if he knows an easy way to get IFICI.

He anticipated me, because︆ I asked, that the 12.5% incentive on mainland was applicable, and the LLC option could︇ be explored. However we didn't go deep until full confirmation of IFICI working.

So really,︈ you pointed me to the only firm (well, his colleague), that didn't say me "it︉ is too soon to know" but instead "I think I know how to do it,︊ but let me confirm it works before getting any further"

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Anyhow, my ask for︋ an advisor was more focused toward the "PT company dilema" of Madeira vs mainland. However,︌ knowing this, and except you may know any other advisor to get in touch with,︍ I will ask the RPBA colleague as well soon for this topic.

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Thanks again!︎

 

[JustAnotherNomad]

Tbh, I think that's pretty good. Much better than someone just shooting from⁠ the hip.

Not really, unfortunately, I haven't really explored︀ PT much myself. Would be interested in what you find out!

 

[ITexpert7]

I don't see how the Madeira thing works, I mean even if possible to pay‌ only 5% corporation tax (until 2027 when it is abolished?) you still have to pay‍ personal tax for dividends, at what 28% + the 5% corporation?
Much better a tax-transparent⁠ company on the mainland where it's 20% fixed for NHR/IFICI owners, and all the substance⁤ is there, no risks or extra expenses.

 

[blast629]

It would make⁣ sense if I plan to work with 'corporate' money, but really, IFICI would not play⁢ a single role here, since everything would be under the PT company... So IFICI wouldn't︀ even be needed if I opt for the Madeira company.

But I still see some︁ substance problems. And well, if I want to withhold, of course is going to be︂ worse...

I think the setup that makes the most sense is either:

===== OPTION 1:︃ PORTUGAL =====

-PT Limited to apply to IFICI (just a small part of the income︄ goes to the Ltd, and it all goes as salary for me, so CIT does︅ not really matter. Will pay 20% + Social Security, for example on a 1000€/month salary.︆ Which will probably make a sum of 3/4.000€.

(No clue about formation and maintenance costs︇ of an Ltd, but I guess it will easily be 2k formation + 2k maintenance).︈

-US LLC: bring most of the income via the LLC. Have a nominee director in︉ neither PT and neither US, to create some substance. Bring it is a dividends at︊ 0% since PT sees it as an opaque entity.

(Very low maintenance, maybe 500€/year).

Total paid = 6/7k per year

Pros:

-Near to Spain, can get by car.
-Easy residency.︋
-Extra options on where to live (mainland, interior, coast, etc)

Cons:

-Requires to have 2︌ companies
-Doubts on the LLC treatment?

===== OPTION 2: MALTA =====

-Register as non-dom. Pay︍ 5k per year for >35k € income (I read is not needed if not more︎ than 35k is remitted, but I guess MT Tax Authority will be happier if you️ pay).

-Receive all the income to the LLC, and then transfer to personal account in‌ 3rd party country IBAN: Wise? Revolut? Therefore "nothing is remitted". Do not pay anything for‍ remitted? Or maybe pay on 12-14k per year income as "remitted" to be safer?

Pros:

-Very simple setup (just 1 company)
-Very laxative Tax Authorities

Cons:

-Harder to get in/out⁠ Malta
-Doubts on the LLC treatment?
-More limited options on where to live

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I think this pretty much sums up everything discussed here, or am I missing something?

Thank you all!!

 

[jeffbean]

Check Bulgaria