Best setup for IT business (apps in Google, Apple) with a Panamanian tax residency

[badabums]

I'm a perfectionist which is trying to create a legitimate tax optimal setup and I have been looking for a best solution for quite a while. Here are the prerequisites for building a setup:

1. Functioning applications in Google Play and Apple AppStore with ads and subscriptions. It means that the revenue comes from Google/Apple US or Ireland or other country based on the contracting company jurisdiction. For instance, Google uses these rules to determine the company for each jurisdiction.
2. Panamanian permanent residency + tax residency is about to happen soon (in 2023).
3. Cyprus temporary residency (still valid or possible to recover). Need to come there every 3 months to keep it valid (VERY inconvenient and expensive).
4. Russian citizen => issues with Bank account opening.
5. Cyprus LTD with substance + account in a traditional Cyprus bank + IP Box tax regime. It is effectively 5.15%-7% in overall tax burden (2.5-4.5% corporate on net profit + 0% personal on dividends as non-dom + 2.65% social contributions on dividends which are needed to maintain Cyprus residency).
6. US SM disregarded LLC on my name with pass through taxation to Panama. This one was a BAD decision because of 30% withholding tax on US users (no DTT between Panama and US) => practically impossible to earn from the US market with this entity.
7. Possibility to open Belize LLC + Caye Bank in Belize (also no DTT between Belize and US => impossible to earn from US market because of 30% WHT).
8. Some contractors are located in Cyprus which means that paying them from Cyprus creates 19% VAT burden which I want to avoid by creating a helper company.

Possible solutions:

1. Rewrite/register new US LLC on Cyprus LTD's name so that all US taxes would pass through to Cyprus under CFC. The main questions here are about VAT (pay or not pay) when paying from this US LLC to other Cyprus companies and whether IP box may be applied to the US LLC.
2. Somehow make use of classic Caribbean offshore jurisdictions to pay to Cyprus companies without VAT. But how to earn from US markets with these companies and avoid 30% WHT!?
3. UAE company + Google/Apple Ireland with trips from Panama to UAE 2 times per year (VERY inconvenient and expensive). I don't want to live in UAE.
4. Romanian micro business(es). The caveat here is the lack of scale. The plan is to grow during this year.
5. A better idea that the community will suggest 😎

The business moves 7 figures per year, but the net profit is a small % of it, so the final setup maintenance costs matters.

Last edited: Mar 20, 2023