Bulgaria or Cyprus for company and residency?

[ilpablo]

Hi! Thanks for sharing. So after these︅ experiences what is your way to go? Is still one of these two or did︆ you move somewhere else with a better setup?

Hi, i was considering Cyprus for⁤ myself. So Thanks for sharing. Where would you move next?

May i ask you why did you choose Bulgaria instead of Romania for example?

Yes but in Cyprus you need to⁠ stay for 60 days a year in order to keep the tax residency. It's not⁤ kind of a big deal.

 

[CyprusLaw]

The fact that compared Limassol to Sofia is bizzare. Also, Ledras ‘is whete⁢ all the action is’, Ledras is considered dangerous, it’s where all the drugs and prostitutes︀ are, so I am curious why would someone make this comment...
Limassol is full of︁ luxury hotels ans restaurants, great beach bars, with a casino opening this year. Larnaca is︂ getting upgraded at the moment and the region has beautiful beaches.

 

[ilpablo]

They will open a casino in Limassol? When? They will organize poker tournaments?

 

[CyprusLaw]

It will probably be delivered bt the end of the year -‍ City of Dreams Mediterranean

 

[CyprusLaw]

Another point is that even after becoming a Cyprus tax resident you are exempted from‌ sdc/tax on dividends for 17 years, not 1 year as has been mentioned in a‍ previous post.

 

[uplana]

You need to move to Cyprus correct?

 

[CyprusLaw]

Dividends are always‌ exempt at Cyprus level for non dom individuals, but you may be liable to pay‍ income tax on the dividends in the jurisdiction of your tax residency. But if you⁠ get the Cyprus tax residency (through the 183 days or 60 days rule) you maintain⁤ the non dom status for 17 years.

 

[PaulKruger]

thank you for refreshing the tax rules in Cyprus. I read from a few guys⁣ around here that it wasn't the case. Once I asked some accountant in Cyprus he⁢ said it is still as you say.

 

[CyprusLaw]

Unfortunately a lot⁠ of people are spreading false information either because they have been misinformed or because there⁤ incentives lie elsewhere

 

[drspak]

Hello
you can contact‍ me privately i am interested in cyprus

 

[Maolaoadviser]

Hi, do you know anything about Bulgaria's⁢ 183 day stay resident requirement? How can i avoid that and still be considered a︀ resident of Bulgaria for tax purposes

 

[Vampp]

1% Income on company (up to 1 mil E yearly / company), 5% dividends in‌ Romania.

For a fee, I can setup your residency (remote) and you don't even have‍ to live here if you don't want to.

Hit me up if interested.

 

[Vampp]

Romania is way better, you can live here if you want or⁠ not. The country does not track your movements.
Hit me up with details so I⁤ can offer a more personalized solution.

Yes, some of the businesses are standard, but some⁣ require more attention depending on nature of your business.

 

[Ade]

Hey, I know this thread is quite old but I︍ was wondering how you decided and whether you are happy with your choice as I'm︎ in the same situation.

To add to your list from what I read so far:️
- Cyprus requires a minimum stay of 60 days per year while Bulgaria seems to‌ be quite easy on this (if you'd like to travel a lot that would be‍ beneficial)
- Company formation and taking tax residency is a lot more expensive in Cyprus⁠ compared to Bulgaria (I would say in average around 5-6x as much)
- cost of⁤ living seems to be higher in Cyprus
- Sofia has a better connection to Western⁣ Europe compared to Cyprus (close, more flights and cheaper)
- Air pollution seems to be⁢ an issue in Sofia, on the other hand Bulgaria seems to offer a wonderful nature︀
- debt to GDP (2023) in Bulgaria is extremely low with ~20% | in Cyprus︁ its ~80%
- Bulgaria charges 5% tax on dividends, Cyprus charges 0% tax but 2,65%︂ for Gesy

Thanks for sharing︅ your experiences! May I ask where have you moved to?

 

[Dandyline]

One plus with Bulgaria is that you can take money as monthly salary (from 10-20k/month)︅ for the same rate as dividends, around 12-13%. So no need to wait 1+ year︆ for dividends.

And it's now in Schengen, so you don't need to live there, just︇ have your residence there and live for example In Spain.

 

[CyprusLaw]

You do not need to wait for one year to take dividends in Cyprus

 

[JohnLocke]

How often can you take out the dividend in Cyprus if‍ you now mind to enlighten us ?

You mean the rule. living in the country where you⁣ pay tax at least 185 days don't apply because of the Schengen agreement ?

 

[polonieth]

Debt to GDP could change very quickly if BG joins the Euro. Hopefully they don't.︅

 

[Dandyline]

You can move freely within Schengen, they dont keep track of days. And it's not only‍ the Physical presense that makes you residence.

In Bulgaria, tax residency is determined based on⁠ the following factors, so you can make sure to satisfy any of these to mantain⁤ tax residency:

1. Physical presence: An individual is considered if they spend more than 183⁣ days in the country within a calendar year.

2. Economic ties: An individual is also⁢ considered a tax resident of Bulgaria if they have a permanent address in the country,︀ own or rent property, or have family members living in Bulgaria.

3. Center of vital︁ interests: An individual is considered a tax resident of Bulgaria if their center of vital︂ interests is in the country. This can include factors such as where an individual’s business︃ is based, where they hold a bank account
.
Under point 1, you will be︄ considered a tax resident of Bulgaria only in the year when you have resided in︅ the country for 183 days. On the other hand, you are not required to satisfy︆ the strict residence requirement if you justify that the center of your vital interests is︇ in Bulgaria.

If you start the company on let's say January︉ 1st and begin generating profits immediately, when would it be possible to distribute dividends? I︊ assume that dividends can only be drawn from audited profits accumulated in preceding years?

 

[Ade]

@Dandyline That wil be helpful for some, I guess. For me personally its not sooo‌ important though. However I consider it a Plus for Bulgaria to have two options. Low‍ CIT and low PIT.
@JohnLocke Shengen should not impact the residency rules but I guess⁠ he means its more difficult to prove how long you've been at one place. However⁤ Bulgaria seems to be easier on this than Cyprus. The problem in general is not⁣ the country where you pay taxes but the country where you avoid them. If you⁢ stay in Spain for a long time of the year you might run into trouble︀ with Spanish authorities.
@polonieth I don't know what impact the Euro would have. At the︁ end the lev is already fixed to Euro...The low debt to me is a nice-to-have.︂ It gives me hope that the state is able to work with the taxes they︃ receive.