Best country / setup to minimize tax? (software biz, ~400k, eu)

[maxiz]

@Marzio is right, getting ip box extra low tax rate is not easy, many countries‌ also require that the "development" of the software to be in the country and not‍ outside, which you can't prove anyway, since your software\solution is developed in Romania.
If you⁠ still want to try, you MUST hire proper local lawyer or at least paid consultation,⁤ where you get in detail answer.

Your current tax total which is 12% given overall⁣ tax rates in EU and World, its competitive.

You can consider Andorra, which has 10%⁢ corp tax , 0 dividends

regarding what @Don mentioned, all these options might work, but︀ it is more complicated and you need to decide if you willing to spend much︁ more time on more complicated structures and setups.
more complicated - more chances to make︂ mistakes

good luck

 

[doomslayer123]

Very interesting information, thank you for sharing.︄

I guess my question is: In that case, am I not at risk of the︅ Romanian government saying the Estonian company is tax resident in Romania due to place of︆ effective management?

Would it not be the same if I just opened a US LLC︇ and received + kept the money in the US company until a time when I︈ move to a different jurisdiction?

 

[Don]

You are right to point out the most critical aspect of "setting anything up" which is⁠ your residence in Romania and the corporate residence test of POEM.

The extent of risk⁤ depends on how the business is structured and run.

Although it has been a popular structure due to no exchange of information,︀ the US banking secrecy is about to end + there are more regulations that make︁ it less feasible, making it a riskier structure going forward. And for a single-member US︂ LLC, it's clear that the POEM is in Romania since you are the person managing︃ this (the only person in the business).

 

[jinobino]

Cyprus non dom with offshore company wins it all

 

[sergeylim88]

Offshore where?
Banking where?

 

[JimBeam]

You're doing great!

If you move anywhere to save on these $48k/year it may cost‌ you half of that or even more so you're real savings would be maybe 20k.‍
Places like UAE or Cyprus will be costly to run and manage all that (company⁠ running costs ~10k/year all in + travel + health insurance + place to live there)⁤ so it will eat up a lot of these 48k so you're potential savings would⁣ be insignificant and you'll lose so much time on things that are not important and⁢ without any headaches.

I would stay in Romania and keep working there as usual. Look︀ how you can optimize and bring the profit down.

The only slightly better option if︁ you're on the south of Country is to move to Bulgaria where you would pay︂ 10% CIT and 5% dividend tax but also won't pay any taxes on capital gains︃ tax on financial instruments that are traded on regulated EU exchanges (UCTIS ETFS) so you︄ could invest your profits into stocks/etfs. You can also easily move between countries so it's︅ super easy and convenient.

 

[scooterguy]

It seems that OP wants to︆ keep increasing profits though, so those 48k/year could become much more than that, especially if︇ OP crosses the micro company threshold.

UAE is not that expensive outside of Dubai, but︈ also keep in mind that there is no need to really live in UAE anyways.︉

Keep company and legal residence in UAE and spend most of the time in SEA.︊ Much cheaper, no need to deal with the harsh Romanian winters, and an extra $30k+︋ per year.

Also, no taxes on investments either with UAE residence.

 

[jinobino]

Hk company plus some emi would‌ work

 

[CyprusLawyer101]

Can you elaborate a bit more on your business operation?

 

[JonnyStekkino]

UAE has the requirement of 2 days every⁢ 6 months presence there if u are with any company residency.
Bahrain much better, if︀ you get the residency through the purchase of an apartment, you have no requirement of︁ stay, and 10 years visa.

 

[Don]

In UAE you can also get 10 years golden visa fairly easily⁤ within 6 months paying a high salary and then you have no requirements to visit⁣ the country at all.
No need to invest or have an apartment.

 

[JimBeam]

Once issued - do they actually check if you lower your salary back let's say half⁠ of the original one?

 

[Don]

No.. and you can even‍ sponsor your family members.
With 6 months of steady income you might even get access⁠ to some leverage to buy a property or lease a vehicle.

 

[doomslayer123]

- I am selling software for online stores (plugins that extend the functionality of a‍ popular e-commerce platform). I have developed the software.

- The main source of income is⁠ selling this software through my website. I work with Paddle.com for payment processing, and their⁤ company also acts as a merchant of record / reseller ("Digital Services licensed to Paddle⁣ for resale" is technically on their reverse invoice). Paddle then sends a single monthly payment⁢ to my company from their UK entity & bank.

- Some other smaller collaborations (10-20%)︀ through marketplaces, which likewise send me a monthly payout.

 

[CyprusLawyer101]

Thank you. Is your product undergoing any fine tuning or on-going development?
And do you expect︀ income to rise?

 

[JimBeam]

Does this visa requires a visit once every 6⁠ moths?

 

[Don]

No.. The benefit is the ability to stay outside the UAE for more than the‍ usual period of six months in order to keep the residence visa valid.

 

[doomslayer123]

Yes, updates for the software are‌ constantly released (1-2 updates per month), including new features and improvements to existing features.

I expect a slight income increase but I cannot guarantee it in any way.

 

[CyprusLawyer101]

You could qualify under the CY⁠ IP regime. A cyprus company could be your solution.

 

[scooterguy]

I think that with the nature⁠ of this business (mostly passive income) you can set up anywhere with no tax or⁤ low tax and just live in Thailand or Malaysia.

A combination of UAE + residence⁣ in one of the aforementioned countries could work well.