Where to incorporate for easy PE, cheap and no VAT?

[kekmaw]

Question: What would be the ideal way to set up a business to create PE outside of the country you live in?

Requirements:

1. Cheap/Easy to manage
2. No VAT on imported and exported services
3. No tax on salaries paid to non-residents

The actual corporate tax rate doesn't matter as the goal of this business is not to make any profit.

Situation:

I need to set up a consulting company that will provide services for my other companies (yes, need to be careful with transfer pricing).

This company will export services to my other companies but it will also import services from freelancers, hence it's important that no VAT applies on imported and exported services.

It need to have permanent establishment in another country but the country I'm residing so I suspect I need to hire someone in that country as a manager of some sort. Therefore it would be ideal if it's cheap and easy to maintain.

Lastly, the corporate tax rate won't matter as profit shouldn't occur in this company.

Based on the above, where would you incorporate?

 

[JustAnotherNomad]

Estonia

 

[Don]

kekmaw said:
Question: What would be the ideal way to set up a business to create PE outside of the country you live in?

Requirements:

1. Cheap/Easy to manage
2. No VAT on imported and exported services
3. No tax on salaries paid to non-residents

The actual corporate tax rate doesn't matter as the goal of this business is not to make any profit.

Situation:

I need to set up a consulting company that will provide services for my other companies (yes, need to be careful with transfer pricing).

This company will export services to my other companies but it will also import services from freelancers, hence it's important that no VAT applies on imported and exported services.

It need to have permanent establishment in another country but the country I'm residing so I suspect I need to hire someone in that country as a manager of some sort. Therefore it would be ideal if it's cheap and easy to maintain.

Lastly, the corporate tax rate won't matter as profit shouldn't occur in this company.

Based on the above, where would you incorporate?
Click to expand...

Where are you and your other companies based?

 

[kekmaw]

Estonia has been what I've researched the most and seems to be suiting here, provided PE can be created without too many costs.

Don said:
Where are you and your other companies based?
Click to expand...

They are US LLC's

 

[Don]

kekmaw said:
Estonia has been what I've researched the most and seems to be suiting here, provided PE can be created without too many costs.



They are US LLC's
Click to expand...

Doesn't the same things apply to US LLCs?

1. Cheap/Easy to manage
2. No VAT on imported and exported services

I can tell you one more benefit of creating a PE in Estonia would be if you could set Estonia as a jurisdiction for litigation. For small claims its very efficient and recognised globally. Youll spend at least 10 times less than you would in US. Thats why many companies use both US LLC and Estonia together, often shifting all US profits to or through Estonia with very low tax.

Last edited: Aug 18, 2023

 

[kekmaw]

Don said:
Doesn't the same things apply to US LLCs?

1. Cheap/Easy to manage
2. No VAT on imported and exported services

I can tell you one more benefit of creating a PE in Estonia would be if you could set Estonia as a jurisdiction for litigation. For small claims its very efficient and recognised globally. Youll spend at least 10 times less than you would in US. Thats why many companies use both US LLC and Estonia together, often shifting all US profits to or through Estonia with very low tax.
Click to expand...

That's an interesting "bonus".

I was thinking another US LLC could work for this too but I'm not sure where the PE would be. I don't want it to be where I'm residing, as the sole owner and I don't want it to be in the US. One pro with the US LLC though is that it wouldn't show my name in a public register which I assume can be easily found on an Estonia company.

However, maybe a US LLC with a hired manager in Bahrain or something would do the trick regarding PE?