Don said:
Maybe just set up a holding company for the time being to get rid of the WHT of 8%.
Then, the structure would be just 3% +- 1% tax.
Times have changed regarding the automatic exchange of information between financial authorities. In practice, this means you shall have substance. Also, banking is increasingly complicated.
It depends on how much income you need to live.
Some people are happy with 40k net income per year in Slovenia while having a company abroad.
Sole proprietor with normalized expenses -> they assume your expenses are 80% of your income, and they tax you 20% on the remaining 20%, so effectively 4% tax (a bit more if you make more than 50.000€). This is basically what all IT freelancers do.
As mentioned above, you could start by setting up a holding company in an EU jurisdiction for zero WHT on dividends.
Estonia could be quite a cost-efficient choice for such a simple holding company.
You distribute dividends to the holding and can redistribute those profits to yourself later without further tax, depending on where you will be a resident.
Having this in mind, Estonia presents a decent proposal since such dividends sourced from Romania would not be taxed if distributed to Estonian tax residents from the Estonian resident holding company, and getting Estonian tax residence is simple. It does not require a physical presence in the country, but you must register your address in the population register.
Alternatively, you can consider other jurisdictions for personal tax residence that would not tax such dividends.
On top of that, you will get access to 0% tax until the distribution regime + some other potential structures that could be interesting going forward, like:
- Estonia-Malta fiscal unit structure (effective tax 5%)
- Estonia-Georgia Virtual Zone company with Estonian tax residence (effective tax 5%)
- Estonia-Bulgaria/Hungary/Switzerland (effective tax ~10%-11)
- Payout salary from the Estonian company while being a tax resident in UAE (0% tax)
and more...
Click to expand...
