European expat living in PY looking for best jurisdiction for company incorporation and banking within EU

[TheExpatGuy]

Hi y'all!

I am German (also passport holder) living in Paraguay. For online business activities I used to use companies incorporated in the Seychelles, Hong Kong and the Marshall Islands with bank accounts in several European countries because the clients are mainly from Germany, Austria, UK, Switzerland, Spain and France. Over the years all of them practically kicked my business out. Reasons are different: some were afraid because I live in a"drug country", some just dislike offshore jurisdictions...etc. etc.
The idea is to legally not pay any taxes and also avoiding jurisdictions with VAT.
I am a holder of the Estonian eResidency. I also have the Uruguayan residency.

Questions:
1. Which jurisdiction would you recomend for incorporation nowadays keeping taxes at 0?
2. What banks open remotely business bank accounts within the SEPA area?
3. What banks open remotely business bank accounts within Europe?
4. What EMIs might be a Plan B choice?

Questions regarding personal situations:
1. As Switzerland, Singapore and most other interesting jurisdictions have died, what might be recomended for me keeping funds? I do have Paraguayan bank accounts, however, I really dont like keeping my money in the country I live in.


Best regards,

 

[thirtyniner]

I'm not able to provide any help' on this, but considering I'm also an EU citizen, this thread is most of an interest to me.

 

[Sols]

Why not form a local company in Paraguay? You have territorial taxation, which ”” depending on how it's applied ”” might exempt you from local tax on income from sales/transactions outside of Paraguay. If your clients are all non-residents, you might end up with a 0% tax bill. Speak with a local tax adviser.

As for banking in SEPA, you could try opening an account with BBVA, Itaú, or other banks that are present in both Paraguay and Europe. Leverage that relationship to open a SEPA/EUR IBAN account.

But chances are you could open an account with an EMI like TransferWise for a locally-controlled Paraguayan company.

I understand not wanting to keep funds long-term in Paraguay. But you can more easily solve that by opening a personal account somewhere and withdraw funds from the company into that account. Might be an easier approach.

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This is the probably the answer to your question.

 

[TheExpatGuy]

Sols said:
Why not form a local company in Paraguay? You have territorial taxation, which ”” depending on how it's applied ”” might exempt you from local tax on income from sales/transactions outside of Paraguay. If your clients are all non-residents, you might end up with a 0% tax bill. Speak with a local tax adviser.

As for banking in SEPA, you could try opening an account with BBVA, Itaú, or other banks that are present in both Paraguay and Europe. Leverage that relationship to open a SEPA/EUR IBAN account.

But chances are you could open an account with an EMI like TransferWise for a locally-controlled Paraguayan company.

I understand not wanting to keep funds long-term in Paraguay. But you can more easily solve that by opening a personal account somewhere and withdraw funds from the company into that account. Might be an easier approach.
Click to expand...

Thanks for your message! However, Paraguay is a no go here. To cut a long story short: tried all of that already, and it simply doesnt work. No chance for opening accounts anywhere else for example.

 

[Sols]

OK. Shame you can't make use of it directly, but with it being a territorial tax jurisdiction, you should be fine from a tax perspective if your foreign company has tax residence.

In that case and since you want EU/Europe connection, take a look at Cyprus, Malta, Gibraltar, and Isle of Man. It's quite common for service provider to provide professional directors, thereby providing tax residence in the country.

In Cyprus, you would pay 12.50% on profits but you might be able to find legal, creative ways to lower you taxable income. Local banking is doable in some cases, otherwise finding an EMI is fairly easy.
In Malta, you would pay 35% but get 6/7 back for an effective tax rate of 5%. But be wary of Malta about take a massive hit to reputation and banking will become even more difficult.
In Gibraltar and Isle of Man, you're looking at 0% tax. However, they're non-EU territories which can be an issue in some circumstances.

If you work with a reputable fiduciary, they should be able to take care of bank account opening for you. They would also be able to offer you guidance on tax law and finding ways to make sure you don't pay more than necessary.

You might find some touting UK LLP but I would be careful with that, since an LLP is not a taxable entity in itself. At a quick glance this looks like an attractive 0% tax, but the flip side is you are subject to personal tax. While it looks like Paraguay has territorial taxation even for personal income, you risk creating questions around where the income was originated. That risk is probably minimal but it's one you can avoid by going with another jurisdiction and having a foreign entity that is clearly tax resident there.

Toggle signature
This is the probably the answer to your question.