Remote software developer generating mid 6 figures, where to incorporate?

[Cloudbanck]

It makes sense in territorial tax‍ countries, zero tax countries, de facto territorial countries, under the radar situations, some non dom⁠ countries, and if you are not a tax resident anywhere.

So in most of Latam⁤ (maybe not Brazil though), in Africa (except South Africa), in the Middle East/Gulf countries, in⁣ Central Asia, usually still in Southeast Asia, on Pacific and Caribbean islands and in zero/low⁢ tax microstates.
Then in China Im not sure, probably not in India. Maybe under the︀ radar in Russia, Belarus.
Could work as non dom in Ireland and Malta with substance︁ elsewhere. Rest of EU/EEA, and UK, typically no point.
Probably works in the non-EU Balkan︂ countries.
Probably not in Japan, South Korea. Not sure about Taiwan.

 

[ShillGates]

stay in NL, setup a holding BV above your trading company - after the corporate‌ tax, divi it all out to the holding above it which is then tax free‍ after that. then this holding can send money /lend money to your other bv where⁠ you can invest in property stocks whatever.

Its not only how much you earn and⁤ keep its also , what you want to do with the excess cash.

the only⁣ banking i found reliable i the uae banks, these are reliable. But to get access⁢ to this you only need to pass by once every 6 months - still being︀ taxed nl way as you live there.

also bear in mind to what contributed to︁ where you are now. for example if ING gave you all the backing and the︂ fact you live in nl with a good timezone, or infrastructure - dont move to︃ panama where the electricitry fails many times for example, or go to hong kong where︄ the humidity kills you

 

[JustAnotherNomad]

Depends. Some territorial‌ tax countries like Singapore (or maybe Malaysia) enforce PE rules, so they would treat your‍ income as locally sourced.
Just because you incorporated the company doesn't mean anything.

It's still 25.8% tax and you can't spend the money⁢ on personal expenses.

 

[Don]

I like that idea.
I would look into establishing⁣ a company abroad and operating through a branch office or a PE in Netherlands.
Assuming OP qualifies for IP box then effective tax could be reduced down to 7% this⁢ way.

If OP chooses the correct jurisdiction (e.g., cyprus, malta, estonia) and establish sufficient substance︀ so the company will not be considered tax resident in Netherlands then this could be︁ a great way to optimize tax as paying withholding taxes could be avoided, and it︂ gives the opportunity to pay out the profits tax free in the future (apart from︃ paying this 7%). Until then the entity could reinvest the profits.

 

[Cloudbanck]

In most of the world it means a lot.⁠ Bureaucrats are just not very good handling a foreign country's system, or with international cooperation,⁤ and PE rules are typically flimsy and unenforced.

But yeah, first world countries are better⁣ at this and can enforce PE rules. There arent so many first world countries with⁢ territorial taxation though. Singapore is one example yes. I dont know Singapore very well, but︀ I would assume that you would have to establish substance/PE outside of Singapore. So it︁ would work similarly to non-dom in Ireland or Malta, which is essentially territorial tax with︂ enforcement of PE (stricter in Ireland than Malta).

 

[Roo]

With an EU passport in Malta you can just go rent a place (you only‌ need cash and an ID) and live there, no one will ask you anything at‍ least not for a few years 😉
Maybe if you actually go to do paperwork but⁠ otherwise no one knows or cares at least as long as you don't stand out⁤ in some way. Not a great place to live though, small, bad traffic a bit⁣ boring.

 

[jafo]

How's the cost of living in Malta?
How about⁢ safety & crime?

 

[Roo]

It's been a couple years since I've been there, it was a bit more pricey‌ than Spain/Italy since everything was imported. Eating out was 15-30 euros per person for a‍ portion of food. Public transport wasn't expensive but the buses didn't stick to schedule, drivers⁠ weren't very nice and decided by themselves if the bus was too full and didn't⁤ want to stop, they were also quite racist, they left black people standing in the⁣ station many times.
Rentals were crazy, some were renting place without even seeing them in⁢ Sliema (popular tourist area). It was around 1k/month for a spacious 3 bedroom apartment in︀ smaller towns back then but build quality was awful, rain in autumn meant mould in︁ the apartment.

It was quite safe, although from time to time you read about some︂ fights or crimes, never had issues.
Btw, they are crazy about fireworks there, they will︃ drive you nuts with them 😀

 

[Marshal]

Now prices are even higher︄ during a tourist season. Agree about quality of building work. Some apartments are in such︅ a dire condition that you wouldn't spend a night there even if they paid you.︆ If there's a choice go for new builds and avoid ground floor/basement apartments.

 

[roamcorp]

You cannot lend⁤ any decent amount anymore (esp. next year, 17k), and you're forgetting a 33% dividend if⁣ you want it use it personally. All profits and appreciation on investments will be taxed⁢ in full if you do it this way.

 

[pieceofmind]

I'm facing the same challenge and at this point I'm leaning towards opening a Samoa‌ company. I would put software IP on the balance sheet which is code, libraries, and‍ trade secrets that I've come up with over the past few years. I would have⁠ a mailbox, phone number, and even a Samoa ".ws" domain and a physical server that⁤ hold sensitive company documents and trade secrets there. I would then accept contract invoice payments⁣ under the pretext of trade secrets and IP, because they are really hiring my experience.⁢

Then my Samoa company hires myself as an employee for $50K/yr to do monkey coding︀ from Malaysia for example. My monkey coding would be considered locally sourced income and would︁ pay tax on that $50K salary.

When I need to sign contracts, update trade secrets,︂ plan projects, make strategic decisions, etc for the Samoa company, I would travel as a︃ digital nomad to another country for a few days (say to Singapore), have the Samoa︄ company rent a workspace there for a day, and do some control and management of︅ the company, update the meeting minutes book, etc then fly back home to my 9-5︆ employee monkey coding work.

Any thoughts, advice, or anything missing on this structure?

 

[DeepDrilling]

I heard Panama has the most satisfied expats world wide, It is measured by the‌ standard of living, costs of food and rent, as well as taxes, and it is‍ also easy to find a high-quality home there. It sounds very appealing.

 

[Alkatraz]

What is PT?

 

[Sols]

PT = Permanent Traveller. A (largely outmoded)‌ concept where you live nowhere and don't spend enough time anywhere, so you're legally not‍ tax resident anywhere.

Was entirely possible for a long time. Has become increasingly difficult in⁠ the last 10,15 years.

Nowadays it's still technically possible for some people, but it can⁤ make things like banking difficult in this day and age of ever increasing controls and⁣ surveillance. The more modern PT-like setup is having a place of residence in a zero/low⁢ tax jurisdiction and spending much but not most/all of your time there.

 

[Houdini]

OP
It would be great to know if you have followed any of the advice‌ shared in this thread or if you have found out something completely different. That way,‍ you could also show all the users who responded that you appreciate the time they⁠ have spent on you!

 

[dany]

Do you went with a Cyprus company︅ ?

 

[turmpy]

You should just register a Cyprus company︅ for what you’re planning to do and move to Romania yourself to develop your software︆ there. You can also find skilled developers at affordable rates, which would allow you to︇ expand your business further while enjoying favorable tax benefits.

 

[providenceventurer]

Are you willing to collaborate with someone in Dubai?

 

[JustAnotherNomad]

That seems unnecessarily complicated.⁠ Malaysia currently doesn't really care about foreign income. You could just set up a transparent⁤ US LLC and not pay tax if you live in Malaysia. There's a chance this⁣ will change in the future, but for now there is basically zero enforcement, as far⁢ as I know.

 

[pieceofmind]

This is bad⁤ advice. Play the game instead of cheating, otherwise you can go a downward spiral a⁣ decade later if any govt ever wants to call your hand. If there’s a smarter,⁢ simpler way, im all ears.