Cyprus VS Bulgaria VS other - where to incorporate in 2019?

K

kevino

New Member
Sep 21, 2018
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Hello,

The last few weeks I dig a lot to find a place where to incorporate my company.

My business is quite simple and working with a simple website :
- customers find the website and pay us for the online service we provide
- 2 shareholders are based in Asia (different countries) since many years but with Europe passport
- dozens of freelancers from everywhere in the world work for the business, no salary but payment for each task
- customers are mainly from Asia, sometimes from Europe, rarely from US
- no office, no need because shareholders and freelances are working from home, starbucks, etc in different countries

I want to incorporate in "clean jurisdiction" and not shady one like Mauritius or Seychelles. I need a place with low tax, bank account, and quite cheap for maintenance (without need to rent office and staff except if it's really low). The only thing I'm sure is I need to incorporate in Europe. I think we have the possibility to choose the best place to incorporate with minimum tricks as our business operations, customers, staff and shareholders don't belong to a specific country.

I checked about Cyprus (12.5% corporate tax), but after many contacts and phone calling it looks like it's not an option anymore if we don't have physical presence there as now banks are very carefully. Of course incorporate the company is always possible but it's for bank account there is a problem. If someone have information about a way to have a company + bank account (on long term!) without physical presence in Cyprus, please let me know.

Then I checked about Bulgaria (10% corporate tax + 5% dividends) during weeks. Looks interesting but we are far of the advertisement "your company for 400 euros". The price I got for incorporation the first year is more like 4000-6000 euros. If it had to be this price no problem but I'm even not sure Bulgaria is the best place for me.

I checked also Estonia. Eventually that could be the solution but I'm sure I can get better than the 20% tax.

If you have any information to help me to find the best place to incorporate my company, let me know 🙂
 
Hi

If you make less than 1M EUR, go to Romania, hire 2 guys for 400 EUR per month, and pay 1% taxes OR pay 3% taxes on Gross Profit without any employment.
 
kevino said:
kevino said:
Hello,

The last few weeks I dig a lot to find a place where to incorporate my company.

My business is quite simple and working with a simple website :
- customers find the website and pay us for the online service we provide
- 2 shareholders are based in Asia (different countries) since many years but with Europe passport
- dozens of freelancers from everywhere in the world work for the business, no salary but payment for each task
- customers are mainly from Asia, sometimes from Europe, rarely from US
- no office, no need because shareholders and freelances are working from home, starbucks, etc in different countries

I want to incorporate in "clean jurisdiction" and not shady one like Mauritius or Seychelles. I need a place with low tax, bank account, and quite cheap for maintenance (without need to rent office and staff except if it's really low). The only thing I'm sure is I need to incorporate in Europe. I think we have the possibility to choose the best place to incorporate with minimum tricks as our business operations, customers, staff and shareholders don't belong to a specific country.

I checked about Cyprus (12.5% corporate tax), but after many contacts and phone calling it looks like it's not an option anymore if we don't have physical presence there as now banks are very carefully. Of course incorporate the company is always possible but it's for bank account there is a problem. If someone have information about a way to have a company + bank account (on long term!) without physical presence in Cyprus, please let me know.

Then I checked about Bulgaria (10% corporate tax + 5% dividends) during weeks. Looks interesting but we are far of the advertisement "your company for 400 euros". The price I got for incorporation the first year is more like 4000-6000 euros. If it had to be this price no problem but I'm even not sure Bulgaria is the best place for me.

I checked also Estonia. Eventually that could be the solution but I'm sure I can get better than the 20% tax.

If you have any information to help me to find the best place to incorporate my company, let me know 🙂
Click to expand...
Click to expand...

Where do you live ? what is your current fiscal residence ?
The place you incorporate might be disregarded by the taxman as you're not working from there and basically you won't have any interest in the country of incorporation.
Be careful, your country of residence tax rate might be applied to your company even if incorporated somewhere else.
 
Financelady45 said:
Financelady45 said:
If you make less than 1M EUR, go to Romania, hire 2 guys for 400 EUR per month, and pay 1% taxes OR pay 3% taxes on Gross Profit without any employment.
Click to expand...
Click to expand...

I saw that option somewhere. Do we only need hire 2 guys and that's all? Can they work as freelance or we need provide them office? Do we need an office or just mailbox is fine? Someone has feedback about real experience with this setup?
And same question about banking than Dubsize.

Dubsize said:
Dubsize said:
Where do you live ? what is your current fiscal residence ?
The place you incorporate might be disregarded by the taxman as you're not working from there and basically you won't have any interest in the country of incorporation.
Click to expand...
Click to expand...

Exactly. One shareholder is in Indonesia, one shareholder is in Taiwan. In both case we don't have customers on those countries. And freelancers/workers are somewhere else in the world (India, Argentina, etc). If we incorporate in Indonesia, taxman will tell Taiwan's shareholder it's not good, if we incorporate in Taiwan, taxman will tell Indonesia's shareholder it's not good. So at end there is no logic reason to incorporate in one of this country legally so I think we can incorporate everywhere we want because there is no trick, we are really a global company with interest everywhere and nowhere specific in same time. So I guess it's more an advantage than an inconvenient.
Also shareholders will be paid by dividends and not salary, so I think legally you have the right to live in country A and get dividends from country B because you are shareholder as long you report them to taxman. And nobody can know if we work everyday for this company or not. What makes the difference between an inactive shareholder and an active shareholder who work 50 hours by week for the company?

fshore said:
fshore said:
Is Gibraltar too shady for you?
Click to expand...
Click to expand...

Why not. I think I read somewhere it was not easy like before or expensive to maintain. But if you have some feedback about the reality in 2019 about if it's easy to have bank account / fix cost / maintenance fees.
 
kevino said:
kevino said:
I saw that option somewhere. Do we only need hire 2 guys and that's all? Can they work as freelance or we need provide them office? Do we need an office or just mailbox is fine? Someone has feedback about real experience with this setup?
And same question about banking than Dubsize.



Exactly. One shareholder is in Indonesia, one shareholder is in Taiwan. In both case we don't have customers on those countries. And freelancers/workers are somewhere else in the world (India, Argentina, etc). If we incorporate in Indonesia, taxman will tell Taiwan's shareholder it's not good, if we incorporate in Taiwan, taxman will tell Indonesia's shareholder it's not good. So at end there is no logic reason to incorporate in one of this country legally so I think we can incorporate everywhere we want because there is no trick, we are really a global company with interest everywhere and nowhere specific in same time. So I guess it's more an advantage than an inconvenient.
Also shareholders will be paid by dividends and not salary, so I think legally you have the right to live in country A and get dividends from country B because you are shareholder as long you report them to taxman. And nobody can know if we work everyday for this company or not. What makes the difference between an inactive shareholder and an active shareholder who work 50 hours by week for the company?



Why not. I think I read somewhere it was not easy like before or expensive to maintain. But if you have some feedback about the reality in 2019 about if it's easy to have bank account / fix cost / maintenance fees.
Click to expand...
Click to expand...


Hi

How much are you willing to pay in terms of taxes?
 
Hi,

How much I am willing to pay for taxes? As long it's not crazy taxes it's fine. Cyprus 12.5% corporate tax is fine, Bulgaria 10+5% is fine also. As long it's under 20% I would say it's fine. Some want to pay 0% tax, I don't believe in that for my case, but I don't want to pay 30% neither 🙂
Of course we need to see the price of fix cost and maintenance every year to see at end how much is the total cost.
For have idea of the figures, gross income by year is like 300K and benefit is 200K.
 
kevino said:
kevino said:
Hi,

How much I am willing to pay for taxes? As long it's not crazy taxes it's fine. Cyprus 12.5% corporate tax is fine, Bulgaria 10+5% is fine also. As long it's under 20% I would say it's fine. Some want to pay 0% tax, I don't believe in that for my case, but I don't want to pay 30% neither 🙂
Of course we need to see the price of fix cost and maintenance every year to see at end how much is the total cost.
For have idea of the figures, gross income by year is like 300K and benefit is 200K.
Click to expand...
Click to expand...
UK Ltd then, easiest and cheapest to setup and run, 19% tax. No (UK) tax on salaries to non residents. You might not have to register for vat if your sales to Europe (and maybe soon only UK) customers are below the vat registration threshold of gbp85000.
 
I found more information about LLP UK. If shareholders are non-resident non UK citizen and there is no business in UK it looks like corporate tax = 0%. We only pay tax on dividends according country residence of each shareholder. I wonder if those information are still reliable in 2019...and after Brexit. Someone has more info?

Hungary option...why not.
 
kevino said:
kevino said:
I found more information about LLP UK. If shareholders are non-resident non UK citizen and there is no business in UK it looks like corporate tax = 0%. We only pay tax on dividends according country residence of each shareholder. I wonder if those information are still reliable in 2019...and after Brexit. Someone has more info?

Hungary option...why not.
Click to expand...
Click to expand...
There are not dividends from llp, its pass through income. You're supposed to pay tax on it where you live, will depend on the country where you live how they tax it.
 
Let's say I'm resident of Panama which have 0% tax. Does it mean in this configuration using a UK LLP is free tax completely legally?
I doubt a little.

I found in another forum someone who tried to use UK LLP as non resident for his business 3 years ago. Someone told he did that and at end...paid a huge amount of tax (truth or not?). Another answered a funny but interesting answer : "I don't get it at all, it seems a fairly absurd scenario to me.

The most ridiculous bit seems to be that a non Brit who isn't UK resident is intending to contract outside the UK and yet you're talking about setting up a UK LLP as a contracting vehicle. There's no logic to the proposed approach and the question posed by Stek seems reasonable, the scenario is so daft that it could be yet another load of utterly fictional bollocks by a sockpuppeteer."

If I use my brain few seconds, this comment sounds logic. What the point of UK in this case to allow non-resident with no business at all in UK to pay no tax? If someone confirm he did a setup in this way and there is no trick at all and nobody bothered him, then it's a good news!
 
For example "Gibraltar banks are still not interested in start up and many require huge amount of deposit. For instance, jyske bank requires 150,000 euros deposit minimum. For a trading company, a Gibraltar company without a bank is useless because many payment gateways will not accept that you open a merchant account with a bank country different than a company country."

You can read the thread And what about incorporating in Gibraltar? and in less than 2 minutes you can understand Gibraltar is a no go...
 
kevino said:
kevino said:
For example "Gibraltar banks are still not interested in start up and many require huge amount of deposit. For instance, jyske bank requires 150,000 euros deposit minimum. For a trading company, a Gibraltar company without a bank is useless because many payment gateways will not accept that you open a merchant account with a bank country different than a company country."

You can read the thread And what about incorporating in Gibraltar? and in less than 2 minutes you can understand Gibraltar is a no go...
Click to expand...
Click to expand...
You can bank outside Gibralter.
 
why not use US LLC ,

no federal tax for non-us source income for nonresident partners .

fixed state tax for states such as DE and NV , etc.

you may have a look on stripe atlas solution.
 
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