Programmer company setup help

[kikach]

Hello,

I'm new at the forum, but I tried to read as many different topics as possible.
So, I'm a programmer based in European Union and citizen. Now I have my own company and I pay more then 43% in taxes.
I'm looking for the alternative/option how to optimize the taxes. I'm not able to relocate to be tax resident in another country.
I was thinking about the setup to open a company in Bulgaria/Romania ”¦and even employ maybe 1 person for half/full time and invoice my customers for the service from this company. Both companies I'm invoicing are not based in the country I'm leaving in. My income is not big little bit over 100k€/year.
I'm aware the main problem is, when you want to take out the dividends. Is there any way I could navigate through that?
Thank you for the help and input.

 

[Clank]

You need to relocate.

 

[Sols]

If you're an EU citizen, you can book a flight down to Malta or Cyprus today and start saving on taxes legally.

If that absolutely isn't an option, your next best option is to find a good local tax advisor and optimize your taxes locally. If you're paying 43% on your entire income, there are probably a lot of deductions and other incentives you can leverage to lower your net tax burden. How big of an impact that all has depends on where you live.

Forming a company in Bulgaria or Romania and hiring a sham employee isn't going to change a lot. The money is still taxed when you receive them. So it depends on whether dividends/capital gains tax is so much lower than income tax that it's worth all the extra money (and time) to setup and maintain that BG/RO company and employee. And that's if your local tax office doesn't question the BG/RO company... Could end up in a situation where that company is deemed tax resident where you are, and owes corporate income tax.

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This is the probably the answer to your question.

 

[cionide]

Poland IPBox program, 5% tax for programmers but overall you'll need to relocate anywhere due to CFC for corporations. Anywhere you make a corp it will be a tax resident of your country anyways so there won't be any savings.

 

[Marzio]

kikach said:
I was thinking about the setup to open a company in Bulgaria/Romania ”¦and even employ maybe 1 person for half/full time and invoice my customers for the service from this company.
Click to expand...

You could surely save on CIT by forming a company in RO or BG.

I'll give aother option in the "grey zone" if you know what i mean.

Form a US LLC, bank with Mercury and invoice your customers from the US LLC (better find a US customer as well if you want to keep that bank account)

Then join some freelancing site as a freelancer.

Post an ongoing job on that freelancing site as the US LLC.

Accept the job as the freelancer.

IMPORTANT: you want the freelancing site to invoice you for the job you do as a freelancer for the US LLC.

In this way you can optimize the amount personal income taxes paid.

 

[12345]

Marzio said:
You could surely save on CIT by forming a company in RO or BG.

I'll give aother option in the "grey zone" if you know what i mean.

Form a US LLC, bank with Mercury and invoice your customers from the US LLC (better find a US customer as well if you want to keep that bank account)

Then join some freelancing site as a freelancer.

Post an ongoing job on that freelancing site as the US LLC.

Accept the job as the freelancer.

IMPORTANT: you want the freelancing site to invoice you for the job you do as a freelancer for the US LLC.

In this way you can optimize the amount personal income taxes paid.
Click to expand...

which freelancer website would you recommend for this method for lowest fee?

 

[cionide]

Marzio said:
You could surely save on CIT by forming a company in RO or BG.

I'll give aother option in the "grey zone" if you know what i mean.

Form a US LLC, bank with Mercury and invoice your customers from the US LLC (better find a US customer as well if you want to keep that bank account)

Then join some freelancing site as a freelancer.

Post an ongoing job on that freelancing site as the US LLC.

Accept the job as the freelancer.

IMPORTANT: you want the freelancing site to invoice you for the job you do as a freelancer for the US LLC.

In this way you can optimize the amount personal income taxes paid.
Click to expand...

This would work great if it wasn't for CFC. The US LLC will be a tax resident of his country legally but maybe won't be reported because US is not CRS country.

 

[Marzio]

12345 said:
which freelancer website would you recommend for this method for lowest fee?
Click to expand...

It suffice to say that "motivated" people will find something that will work for them after a bit of research.

I don't really want to help our friends from tax agencies 🙂

cionide said:
The US LLC will be a tax resident of his country legally but maybe won't be reported because US is not CRS country.
Click to expand...

That's exactly the "grey zone" i was refering to.

 

[cionide]

Marzio said:
It suffice to say that "motivated" people will find something that will work for them after a bit of research.

I don't really want to help our friends from tax agencies 🙂



That's exactly the "grey zone" i was refering to.
Click to expand...

Aaaa I re-read your earlier post, I misunderstood the whole part with the freelancing site. That's pretty clever actually.

 

[kikach]

thank you for the help. Sadly it doesn't help me as I don't have USA customers.

 

[12345]

Marzio said:
That's exactly the "grey zone" i was refering to.
Click to expand...

Yes unlikely mercury bank account with get reported to EU authorities but do keep in mind this is tax evasion, it's nothing wrong in my opinion, it's self defense if they tax you 43%

 

[cionide]

kikach said:
thank you for the help. Sadly it doesn't help me as I don't have USA customers.
Click to expand...

Open a wyoming or delaware llc, and then you will.

 

[12345]

12345 said:
Yes unlikely mercury bank account with get reported to EU authorities but do keep in mind this is tax evasion, it's nothing wrong in my opinion, it's self defense if they tax you 43%
Click to expand...

well more than 43% if you include VAT, carbon tax, gasoline tax and others, more like 60 or even 70 %

 

[Marzio]

12345 said:
do keep in mind this is tax evasion,
Click to expand...

In the end he is paying some taxes, not on the whole amount tho LOL

Another option could be to have the US LLC hire himself as an employee in his country through an EOR site like NativeTeams so he will be paid a salary without messing with the freelancing site.

Of course there's risk involved and i wouldn't recommend this as a long term strategy.