Relocating an online company to an offshore, please advise.

[Thomasis]

I have been running an online educational institution in Central Europe for more than 5 years. We will soon launch another 5 language mutations. Due to the savings on taxes, I would like to relocate the company. At first I was approached by Gibraltar, but it probably regulates the educational programs we offer (a pity, I'm often close to Gibraltar), I started thinking about HK, but here I'm very worried about the price of accounting and auditing. The most important thing for me is ideally a country without paying VAT, with the possibility of opening an account in Europe. What can you recommend me?

What do you think of Delaware?

Last edited: Oct 10, 2020

 

[avalanche]

Thomasis said:
I have been running an online educational institution in Central Europe for more than 5 years. We will soon launch another 5 language mutations. Due to the savings on taxes, I would like to relocate the company. At first I was approached by Gibraltar, but it probably regulates the educational programs we offer (a pity, I'm often close to Gibraltar), I started thinking about HK, but here I'm very worried about the price of accounting and auditing. The most important thing for me is ideally a country without paying VAT, with the possibility of opening an account in Europe. What can you recommend me?

What do you think of Delaware?
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In order for us to have a clear picture you need to tell us your current tax residency and citizenship, plus we have no idea how much taxes you are paying now and looking to pay with your new setup.

As a side note, have you considered Cyprus?

 

[thirtyniner]

Thomasis said:
I have been running an online educational institution in Central Europe for more than 5 years. We will soon launch another 5 language mutations. Due to the savings on taxes, I would like to relocate the company. At first I was approached by Gibraltar, but it probably regulates the educational programs we offer (a pity, I'm often close to Gibraltar), I started thinking about HK, but here I'm very worried about the price of accounting and auditing. The most important thing for me is ideally a country without paying VAT, with the possibility of opening an account in Europe. What can you recommend me?

What do you think of Delaware?
Click to expand...

Hong Kong will cost you around 3.000 EUR per year.

 

[Thomasis]

avalanche said:
In order for us to have a clear picture you need to tell us your current tax residency and citizenship, plus we have no idea how much taxes you are paying now and looking to pay with your new setup.

As a side note, have you considered Cyprus?
Click to expand...

I am from Czech, company registered in Czech too. We have 21% VAT + 19% from profit + min. 15% if I take the money for me, from my company. I don't offer services in English, only Czech, Polish, Spanish and Russian. Wha to you thing about Delaware?

 

[CaptK]

No VAT takes you out of Europe.
So US LLC will be the most cost effective set up for you.
Mercury and TW for bank account and maybe 2checkout for merchant.

 

[JustAnotherNomad]

I'm not quite sure what you are asking about. If you want to do it the legal way, you don't have many options.

If you sell to EU private customers (B2C), there is always VAT. No way around that. The only way to avoid VAT is by only selling only B2B or by not selling to EU customers at all.

If you think you can sit in CZ and not pay taxes for your company because it's registered in HK, you're also wrong. The company will have to pay taxes in CZ under the CZ rules since that's where the company is actually managed from. It doesn't matter at all where your customers are located.
If you don't want to physically move the business to another country (meaning you'd be working from the other country), you'd have to at least build substance somewhere else. Substance means that you'd only be a passive investor, while local employees manage and run the daily business in the other country. I'm always really of skeptical towards such solutions, but as @Sols recently pointed out in another thread, you could try and see if a nominee solution would work:

https://www.offshorecorptalk.com/th...-online-e-commerce-business.30703/post-146780

But don't get your hopes up, the chances of this working a very low. You'd usually have to have more than just a cheap nominee director in the other country.

All other options that I know of would be illegal.

 

[Thomasis]

JustAnotherNomad said:
I'm not quite sure what you are asking about. If you want to do it the legal way, you don't have many options.

If you sell to EU private customers (B2C), there is always VAT. No way around that. The only way to avoid VAT is by only selling only B2B or by not selling to EU customers at all.

If you think you can sit in CZ and not pay taxes for your company because it's registered in HK, you're also wrong. The company will have to pay taxes in CZ under the CZ rules since that's where the company is actually managed from. It doesn't matter at all where your customers are located.
If you don't want to physically move the business to another country (meaning you'd be working from the other country), you'd have to at least build substance somewhere else. Substance means that you'd only be a passive investor, while local employees manage and run the daily business in the other country. I'm always really of skeptical towards such solutions, but as @Sols recently pointed out in another thread, you could try and see if a nominee solution would work:

https://www.offshorecorptalk.com/th...-online-e-commerce-business.30703/post-146780

But don't get your hopes up, the chances of this working a very low. You'd usually have to have more than just a cheap nominee director in the other country.

All other options that I know of would be illegal.
Click to expand...

We do not have any offices or branches in my country, we offer our services to anyone who speaks the given language. I spend at most 6 months a year in the Czech Republic, my company operates from anywhere in the world.

 

[Thomasis]

CaptK said:
No VAT takes you out of Europe.
So US LLC will be the most cost effective set up for you.
Mercury and TW for bank account and maybe 2checkout for merchant.
Click to expand...

Thanks you, i think the same.

 

[JustAnotherNomad]

Thomasis said:
Thanks you, i think the same.
Click to expand...

Be aware that this will probably be illegal if you don't declare it and pay the CZ tax.

 

[JustAnotherNomad]

Thomasis said:
I spend at most 6 months a year in the Czech Republic
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Being nomadic sure helps, but there is still a high risk that there is a permanent establishment in the Czech Republic. If you want to be sure that what you are doing is legal, I strongly recommend you to talk to a Czech tax lawyer. If you don't care, well, then you don't. The chances of being caught are low with a US LLC. But don't just assume that what you are doing is legal. Only because you spend less than six months per year in CZ does not mean you or your company don't have to pay taxes there.

How do I know this? Because I have a similar lifestyle and I did my own research.

 

[ShillGates]

just setup a czech company, get a bank account ,sell everywhere. and just recharge your IT from your whole saler from somewhere els