Suggestion for Tax free Jurisdiction for Software company....Dubai Freezone Alternative

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JustAnotherNomad said:
JustAnotherNomad said:
Estonia would not work as they have a "subject to tax" rule similar to what Singapore has. Dividends paid out from the Estonian holding would be subject to 20% tax.
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Estonia "could" work if instead of using a Virtual Zone company you use an International Company which is taxed at 5%

sergeylim88 said:
sergeylim88 said:
is this true?
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No.

https://tpsolution.ge/virtual-zone-persons-to-enjoy-corporate-income-tax-exemption-in-georgia/
JustAnotherNomad said:
JustAnotherNomad said:
20% CIT only applicable to dividends
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22% from 2024

https://news.err.ee/1608941543/sides-to-incoming-government-unveil-coalition-agreement
sergeylim88 said:
sergeylim88 said:
the same web site says this
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Stop reading websites and start reading double tax treaties

https://mof.ge/en/5128
 
JustAnotherNomad said:
JustAnotherNomad said:
Kazakhstan has 5-15% withholding tax though?
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Yes, the only way to take out dividends from Kazakhstan tax free is through either a NL or CH holding AND the holding company owns at least 50% of the capital of the paying company AND has made an investment in the company paying the dividends of at least USD 1 million.
 
JustAnotherNomad said:
JustAnotherNomad said:
@Martin Everson Seems like Kazakhstan has 5-15% withholding tax though?
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Sorry I thought we were discussing alternative places than Dubai to live and run a company? Maybe I got the topic wrong. If you live in Kazakhstan and are an resident employee of a legal entity in the Astana Hub then that income is exempt from personal income tax is my understanding. I have only started looking into Kazakhstan since someone mentioned it in MentorGroup so I could be wrong.

https://astanahub.com/en/blog/preferentsii-po-individualnomu-podokhodnomu-nalogu
https://aifc.kz/en/tax-regime
P.S The AIFC tax regime has also been approved by OECD last year 😉.

https://aifc.kz/en/news/organisatio...ies-with-global-standards-of-tax-transparency

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.
 
Don said:
Don said:
Example: a company established in Georgia buying goods from China and selling them to Poland. Taxation: exemption from corporate income tax in Georgia.
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This is EXACTLY what I do! Substitute Poland with Latin America.
Don said:
Don said:
Feel free to reach out if you want to get started in Georgia.
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Interested! How? email, phone, telegram???
 
jafo said:
jafo said:
This is EXACTLY what I do! Substitute Poland with Latin America.

Interested! How? email, phone, telegram???
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PM!

Its worth noting the vast benefit of Georgia is that you pay CIT on the profits that you distribute only (Estonian style tax system). For many businesses that brings the effective tax rate on earned profits further down, as you can reinvest tax free, etc.
Combined with a company in Georgia:
1) Cyprus can be great option for personal tax residency but if you want a sound setup you need to stay there 6+ months a year for tax residence.
2) Estonia on the other hand can offer 5% total tax setup with more flexible ability to travel and do business around Schengen, as you don't have minimum stay requirements for tax residency.
Again, its 5% of what you pay yourself meaning you still have opportunities to live tax free if all your income is coming from tax exempt sources, you also can benefit from foreign tax relief, etc.
Living proof of this is a Georgian billionaire Lomtadze who is a top dividend payer in Estonia
 
JustAnotherNomad said:
JustAnotherNomad said:
How does this work? Isn't the minimum tax 7-10% or something in Estonia?
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No, The income tax in Estonia is not charged on dividends if:
1) the resident company paying the dividend has derived the dividend which is the basis for the payment from a company of a foreign state and at least 10 per cent of such company's shares or votes belonged to the company at the time of deriving the dividend, and income tax has been withheld from the dividend or income tax has been charged on the share of profit which is the basis thereof;
2) the dividend is paid out of the profit attributed to foreign permanent establishment of a resident company and income tax has been charged on such profit;
 
Don said:
Don said:
the resident company paying the dividend has derived the dividend which is the basis for the payment from a company of a foreign state
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Don, in your experience will dividends be tax exempt even if the derived dividends was from a company resident in a tax free jurisdiction?
 
Exactly, but there is a minimum / low tax countries are excluded. I believe anything less than 7-10% (don't remember exactly) is considered as "no tax paid" and then up to 20% Estonian tax is charged.
 
What kind of substance would be required for Cyprus personal tax residency with Georgia company tax residency?
 
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It has to be subject to tax but looks like there's no minum tax
 
Marzio said:
Marzio said:
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It has to be subject to tax but looks like there's no minum tax
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Yes you already answered and that is correct. Overall there are nine different exemptions coming from domestic law.
Its worth noting that in general at times you can get away with applying the domestic treatment which can be lower than treaty rate. No tax authority will ofcourse tell you that.

FixieHartmann said:
FixieHartmann said:
What kind of substance would be required for Cyprus personal tax residency with Georgia company tax residency?
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I recommend consulting this with an international tax advisor, but from Georgian perspective having a home only in Cyprus could be enough + staying there 60 days a year for the tax residency certificate.
For other jurisdictions like the country of your citizenship you might need to stay longer in Cyprus to be totally safe.

Last edited: Jun 13, 2023
 
ok so basiically it is easy to avoid corporate tax in Georgia.
However, is there a way to avoid local tax in Europe when you get some dividend? Like if i get dividend from georgia and live in belgium, i still have to pay a huge 30% dividend tax...
 
bru1234 said:
bru1234 said:
ok so basiically it is easy to avoid corporate tax in Georgia.
However, is there a way to avoid local tax in Europe when you get some dividend? Like if i get dividend from georgia and live in belgium, i still have to pay a huge 30% dividend tax...
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Yes, you need to move your tax residence to a jurisdiction that offers lower overall rate.
 
bru1234 said:
bru1234 said:
ok so basiically it is easy to avoid corporate tax in Georgia.
However, is there a way to avoid local tax in Europe when you get some dividend? Like if i get dividend from georgia and live in belgium, i still have to pay a huge 30% dividend tax...
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If you live in Belgium, your Georgian company most likely will be subject to Belgian tax, even if you don't pay out anything.
 
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