Bulgaria of Cyprus for my setup

[CaptainDurr]

Hey folks,

I am looking to reduce my tax rate and both Bulgaria (10% corp, 5% div tax) and Cyprus (12% corp tax) seem extremely good.

Here's my situation

• Greek tax resident living in Greece, close to Albanian/Bulgarian border
• Own an LLC that generates 170k in revenue
• No wife & kids
• No house to my name

After doing a little bit of research it seems like it's almost impossible for me to establish a company in Bulgaria or Cyprus to receive dividends while I am a am still a Greek tax resident because Greek tax authorities will go after that sweet dough. Am I wrong? And if that's the case, why are there so many online accounting services that can help you set up a company in BG/CY? This is confusing. I know these topics are very niche and not everybody is 100% on the same page.

What I could do is establish a company in Bulgaria, become a Bulgarian tax resident and then visit Greece and stay at my parents second property as as long as I want while laying low (not buying assets to my name). Is this a valid workaround?

 

[scooterguy]

It could work but there is a risk of being caught eventually. I'd suggest spending less than 6 months a year in Greece and you'll be fine.

 

[algotrader]

Both BG and CY are outside Schengen zone, so your movement will be recorded, which can be to your advantage if you spend >183 days in these countries or to your disadvantage if its less.
If you live close to the border you could commute daily to BG and back, but this is not very convenient due to long queues at the border.
You could live during the week in BG and spend the weekends + maybe 1 day per week in Greece. Depending on your type of business you might just register as self-employed in BG and pay effectively 7.5% + social security.

 

[mok]

algotrader said:
Both BG and CY are outside Schengen zone, so your movement will be recorded, which can be to your advantage if you spend >183 days in these countries or to your disadvantage if its less.
If you live close to the border you could commute daily to BG and back, but this is not very convenient due to long queues at the border.
You could live during the week in BG and spend the weekends + maybe 1 day per week in Greece. Depending on your type of business you might just register as self-employed in BG and pay effectively 7.5% + social security.
Click to expand...

This is irrelevant. It doesn't matter that Cyprus or Bulgaria are outside of Schengen. They are EU so they won't stamp your passport with entry/exit.

CaptainDurr said:
Hey folks,

I am looking to reduce my tax rate and both Bulgaria (10% corp, 5% div tax) and Cyprus (12% corp tax) seem extremely good.

Here's my situation

• Greek tax resident living in Greece, close to Albanian/Bulgarian border
• Own an LLC that generates 170k in revenue
• No wife & kids
• No house to my name

After doing a little bit of research it seems like it's almost impossible for me to establish a company in Bulgaria or Cyprus to receive dividends while I am a am still a Greek tax resident because Greek tax authorities will go after that sweet dough. Am I wrong? And if that's the case, why are there so many online accounting services that can help you set up a company in BG/CY? This is confusing. I know these topics are very niche and not everybody is 100% on the same page.

What I could do is establish a company in Bulgaria, become a Bulgarian tax resident and then visit Greece and stay at my parents second property as as long as I want while laying low (not buying assets to my name). Is this a valid workaround?
Click to expand...

There are a lot of people doing this in Greece. I'd suggest Cyprus because there is no language barrier. If you're paying rent in Cyprus and have a utility bill and also have nothing under your name in Greece , it's a very safe setup.

 

[algotrader]

mok said:
This is irrelevant. It doesn't matter that Cyprus or Bulgaria are outside of Schengen. They are EU so they won't stamp your passport with entry/exit.
Click to expand...

Seems like you have never crossed the border between Greece and Bulgaria. They are machine reading your passport/id at the border (and even verifying you car registration). Thus, the long queues.

 

[mok]

algotrader said:
Seems like you have never crossed the border between Greece and Bulgaria. They are machine reading your passport/id at the border (and even verifying you car registration). Thus, the long queues.
Click to expand...

Yes, that happens even if you fly to other Schengen countries. But it is irrelevant because the Greek tax office never asks you for an immigration report. As long as you have a tax residency certificate, lease agreement, and utility bill from the other country they let you deregister as a Greek taxpayer and pay in the other country.

Tax is a risk management business. And the risk here is well worth taking.

 

[CyprusLawyer101]

CaptainDurr said:
Hey folks,

I am looking to reduce my tax rate and both Bulgaria (10% corp, 5% div tax) and Cyprus (12% corp tax) seem extremely good.

Here's my situation

• Greek tax resident living in Greece, close to Albanian/Bulgarian border
• Own an LLC that generates 170k in revenue
• No wife & kids
• No house to my name

After doing a little bit of research it seems like it's almost impossible for me to establish a company in Bulgaria or Cyprus to receive dividends while I am a am still a Greek tax resident because Greek tax authorities will go after that sweet dough. Am I wrong? And if that's the case, why are there so many online accounting services that can help you set up a company in BG/CY? This is confusing. I know these topics are very niche and not everybody is 100% on the same page.

What I could do is establish a company in Bulgaria, become a Bulgarian tax resident and then visit Greece and stay at my parents second property as as long as I want while laying low (not buying assets to my name). Is this a valid workaround?
Click to expand...

Without going into the particulars of your business I think your annual revenue and consequently your annual profit are small for you to go offshore. Putting something together which would withstand challenges and tax risks and taking into consideration such risks and hassles it may not be to your overall benefit to attempt such a set up.