Recommendations for offshore holding company

[Dandyline]

NicolasMaduro said:
Isnt it the other way around? If you own a Company in your home country you have Limited tax liability. Like all income from Company in your home country is taxed like you live there.

Which country are you talking about?
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It's more whether you have close ties to your home country after you have moved.

For example Sweden, this is what they say:

You continue to be considered a resident of Sweden for five years, counting from the day you move abroad, as long as you continue to have close ties to Sweden. If you wish to argue that you have no close ties to Sweden, you must prove that no such ties exist.

Consequently, you will continue to have unlimited tax liability in Sweden and must report all of your world income in your Swedish tax return, as long as your close ties with the country continue to exist.

When determining whether you have close ties to Sweden the Tax Agency take the following circumstances into account:

• if you are a Swedish citizen
• if you are permanently residing abroad
• if you are staying abroad to study
• if you are staying abroad for health reasons
• if you have a Swedish residence that is set up for all-year use
• if you still have family in Sweden
• if you conduct business activities in Sweden
• if you are financially committed to Sweden by holding assets that directly or indirectly have a significant influence on business activity in Sweden
• if you own real property in Sweden.

The above circumstances are only examples of circumstances that may be be taken into account to determine whether you, after you move abroad, have unlimited or limited tax liability in Sweden.

 

[Dandyline]

JustAnotherNomad said:
Lol, where did you read that? Estonia doesn't have territorial/remittance-based taxation. You can spend everything or just transfer it to your personal bank account.
For business owners, Estonia only taxes the corporate income. Dividends paid from post-tax corporate income is not taxed again. And that also applies to foreign companies. Unless the company is on a blacklist, if corporate income tax has been paid, you can receive dividends from that company completely tax-free.
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I just saw it on different sites. Just google: "estonia + taxation on foreign sourced income is only taxed if/when funds are brought into the country"

 

[NicolasMaduro]

Dandyline said:
I just saw it on different sites. Just google: "estonia + taxation on foreign sourced income is only taxed if/when funds are brought into the country"
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You can take dividends tax free to Estonia if you have already paid Corporate tax(and you can prove it), so i guess in most circumstances you will just remit it

 

[JustAnotherNomad]

Dandyline said:
For example Sweden, this is what they say:
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Yeah, Sweden seems to be stricter. But that's only their domestic law and I would expect the DTA to take priority. And Norway and Denmark seem to be a bit more sane.

 

[JustAnotherNomad]

Dandyline said:
I just saw it on different sites. Just google: "estonia + taxation on foreign sourced income is only taxed if/when funds are brought into the country"
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I didn't find that. It's completely wrong in any case. They tax worldwide income, they do not use any form of territorial or remittance-based taxation.

 

[Dandyline]

Estonia is good because its in Schengen, so it's hard for them to control where you are. UAE + Non-resident Cyprus is good to since you pay 0% tax and also 0% VAT for EU customers, so its big savings but you really need to stay there for at least 6 months to be safe.

 

[JustAnotherNomad]

Dandyline said:
You continue to be considered a resident of Sweden for five years, counting from the day you move abroad, as long as you continue to have close ties to Sweden.
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I think that's the important part. In Norway, it's two years, according to Google.
They just keep you as a tax resident for a certain number of years, unless you can prove you have no ties, then it can be less time.
So there shouldn't be any issues with owning a company in Sweden, once you've been out of the country for at least five years, provided you don't trigger other tax residency rules (having a place of dwelling at your disposal etc.).
But again, I think the DTA should take precedence anyway.

 

[JustAnotherNomad]

Dandyline said:
Estonia is good because its in Schengen, so it's hard for them to control where you are. UAE + Non-resident Cyprus is good to since you pay 0% tax and also 0% VAT for EU customers, so its big savings but you really need to stay there for at least 6 months to be safe.
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Exactly.
And you mean non-dom Cyprus residency, I think? VAT is determined by where your customers are, not where you are. Or do you mean a non-resident company that is only registered in Cyprus?

 

[Dandyline]

JustAnotherNomad said:
Exactly.
And you mean non-dom Cyprus residency, I think? VAT is determined by where your customers are, not where you are. Or do you mean a non-resident company that is only registered in Cyprus?
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I mean you have e company in Dubai and have a non-resident subsidiary company registered in Cyprus. Non-resident companies doesn't pay any taxes in Cyprus, it means that the board and management doesn't live in Cyprus and no business is conducted in Cyprus and so on.

Regarding VAT, i was just inspired by the answer in this thread: Cyprus non-resident company: VAT to EU customers

VAT is a big cost to, if you work with b2c.

 

[JustAnotherNomad]

Yeah, but not paying VAT is illegal. You'd have to register in the countries where your customers are located. But it can be difficult for them to enforce the law.

As for non-resident companies, I'm not sure I understand how they work. Isn't it basically like a LLP with offshore partners? In other words, you pretend you are from that country, but for tax purposes, you aren't? I don't see the benefit, except for the fact that you may be able to fool your customers about where your company is really located. So you can have a company in the Seychelles, but you make it look like it's from Cyprus. So it looks nicer on paper.

 

[Dandyline]

JustAnotherNomad said:
Yeah, but not paying VAT is illegal. You'd have to register in the countries where your customers are located. But it can be difficult for them to enforce the law.

As for non-resident companies, I'm not sure I understand how they work. Isn't it basically like a LLP with offshore partners? In other words, you pretend you are from that country, but for tax purposes, you aren't? I don't see the benefit, except for the fact that you may be able to fool your customers about where your company is really located. So you can have a company in the Seychelles, but you make it look like it's from Cyprus. So it looks nicer on paper.
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its very normal to have a company in for example Dubai and handle payments through a subsidiary in for example UK. Nothing shady about that.

As far as VAT, im not sure. Little gray-zone.

 

[JustAnotherNomad]

Nothing shady at all, but I think then the subsidiary is usually tax resident in that country. With nonresident companies, business customers may face issues getting expenses approved as deductible. Because the expense is treated as if the company was from the offshore country, instead of where the subsidiary is registered.

Not paying VAT is clearly illegal, but the authorities struggle to enforce it for small fish.

 

[Martin Everson]

Well Estonia has joined Barbados and Bermuda and launched a new residency program for remote workers. Is it tax free? 😛

https://www.timeout.com/news/you-can-now-apply-for-estonias-dreamy-wfh-visa-081720

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[Nixter41]

You say you are an EU citizen what is your nationality exactly. The laws are different from Germany and France who are very aggressive to Romania and Czech who are a bit more relaxed on tax avoidance.
[/QUOTE]
I'm Croatian, currently resident in Finland.

 

[CaptK]

Nixter41 said:
You say you are an EU citizen what is your nationality exactly. The laws are different from Germany and France who are very aggressive to Romania and Czech who are a bit more relaxed on tax avoidance.
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I'm Croatian, currently resident in Finland.
[/QUOTE]

From the little I know when you leave Finland as a Croatian national you are no longer deemed tax resident if its a permanent move so long as you have not acquired Finish citizenship. You must cut all ties but can keep a bank account but change your correspondence address to your new country of residence. Sell property and do not keep a rental for car or house in your name.

 

[JustAnotherNomad]

Nixter41 said:
I'm Croatian, currently resident in Finland.
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You live in Finland, but you don't know that it's not in Scandinavia?

 

[Nixter41]

JustAnotherNomad said:
You live in Finland, but you don't know that it's not in Scandinavia?
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Not in geographical sense, but it's often included in Scandinavia umbrella term. I really couldn't care less one way or another.

 

[JustAnotherNomad]

Anyway, just look into Estonia or Cyprus or maybe Portugal.

 

[JohnLocke]

Martin Everson said:
You can search the forum there are plenty of threads on countries with a resident non-domicile scheme and also tax free countries.
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Would you consider Malta, Estonia and even Bulgarien as possible options in this case?

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[Martin Everson]

Admin said:
Would you consider Malta, Estonia and even Bulgarien as possible options in this case?
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I would consider only Malta personally.

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.