Most efficient way to manage tax as non-dom in Ireland

[niceviewhere]

I'm looking to find a better way to manage my tax. This is my current situation:

• I work as a IT contractor for US company with no activity in Europe and invoice roughly 120 - 135k per year. I'm currently setup as a freelancer in Spain (autonomo).
• I am British and have British citizenship
• I own a flat in Spain with a mortgage
• I have a small amount of crypto (30k) and no other assets.

I've read about non dom status in Ireland and would like to take advantage of this as I believe it would let me achieve my goals:

• I would like to reduce my tax bill as much as possible
• I would like to gain citizenship of a EU country such as Ireland.

My plan would be to move my tax residency to Ireland and generate my income from dividends from a company, I would only remit a small amount of income into Ireland each year.

What would be the best corporate structure to make this work? I believe it would best to have a foreign company outside of Ireland, this company would invoice the US company as professional services or software license. Where would be the easiest place to setup this company? I looked at Estonia but the corporate tax rate is 20% and I would like that to be lower.

 

[JohnnyDoe]

I don't think you can apply for citizenship as a non dom, because such status goes against the basic requirements for becoming a citizen.

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[niceviewhere]

JohnnyDoe said:
I don't think you can apply for citizenship as a non dom, because such status goes against the basic requirements for becoming a citizen.
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My understanding is that is not the case. You can be a citizen (i.e. irish passport holder) AND non-dom, you only become dom if you choose too and that requires things like a irish will and burial plot.

 

[Martin Everson]

niceviewhere said:
looked at Estonia but the corporate tax rate is 20% and I would like that to be lower.
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I would not focus on the headline tax rate but the effective tax rate you pay after all expenses etc are deducted from your corporate income. So buy company laptops or anything your permitted to expense that you can flip for cash later.

I would personally just setup a UK company cheaply with a local director as family member and yourself as 100% shareholder. Pay the UK corporate tax and take the rest as dividends tax free offshore while living in Ireland. Then remit what you need into Ireland. After you gain your Irish citizenship in 5 years or so then reassess your plans.

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[JohnnyDoe]

niceviewhere said:
My understanding is that is not the case. You can be a citizen (i.e. irish passport holder) AND non-dom, you only become dom if you choose too and that requires things like a irish will and burial plot.
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You can be Irish and non dom, I'm just unsure if you can become Irish while being non dom

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[Sols]

I can't find any references to how it works in Ireland but in for example Malta and Cyprus, obtaining citizenship does not by itself automatically remove the non-domicile status. I remember one case in Malta where someone took up citizenship but in addition to owning property outside of Malta also reserved a grave plot in another country. AFAIK, they never had any issues with their non-domicile status.

I could be wrong, but if my memory is right, even UK lets you remain non-domicile after becoming citizen. But your children (if born after you become citizen) would not be non-domicile.

Don't take my word for any of it, though. Domicile is intentionally vague.

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This is the probably the answer to your question.

 

[niceviewhere]

@JohnnyDoe I need to talk to a Irish immigration lawyer, I'll find out and report back 🙂

 

[JohnnyDoe]

niceviewhere said:
@JohnnyDoe I need to talk to a Irish immigration lawyer, I'll find out and report back 🙂
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Definitely needed! Let me know, I'm curious.
A non dom has an intention to not remain in the country permanently and maintains his main center of interests abroad; a citizenship applicant must show his full integration with the local community. The two things appear to contradict each other.

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[niceviewhere]

@JohnnyDoe I spoke to Irish immigration lawyer and I was correct. You can be a non-dom and apply for citzenship and continue to be a non-dom after receiving citizenship. They are unrelated.

 

[JohnnyDoe]

niceviewhere said:
@JohnnyDoe I spoke to Irish immigration lawyer and I was correct. You can be a non-dom and apply for citzenship and continue to be a non-dom after receiving citizenship. They are unrelated.
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Did he explain how the non dom status, which requires the intention not to remain permanently in the country and to have your main domicile abroad, conciliates with the “integration with the local community” required for obtaining citizenship? Do you have to prove anything or just pass a test?

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[CyprusLawyer101]

To add to your discussion; if you have citizenship by birth then you could say that you are automatically domiciled in that country, provided that you have not undertook intentional steps to change your domicile. If you obtain citizenship/passport at a later point either through investment or other route, in no way should it be implied that you have also changed your domicile. For example, all persons granted citizenship by investment in Cyprus are regarded as non-doms if they choose to reside in Cyprus.

Btw, have toi considered Cyprus as your place of residency? It could possibly give you 0% on income generated from a foreign employer.

Last edited: Jul 15, 2022

 

[niceviewhere]

JohnnyDoe said:
Did he explain how the non dom status, which requires the intention not to remain permanently in the country and to have your main domicile abroad, conciliates with the “integration with the local community” required for obtaining citizenship? Do you have to prove anything or just pass a test?
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Non-dom is completely separate and not related. To become a citzen in Ireland, you need to provide proof of residency as detailed here: https://www.irishimmigration.ie/how...ation/proofs-of-residence/#proof-of-residency

The point system is detailed here https://www.irishimmigration.ie/wp-...ard-for-proofs-re-Identity-and-Residency.xlsx

 

[niceviewhere]

CyprusLawyer101 said:
To add to your discussion; if you have citizenship by birth then you could say that you are automatically domiciled in that country, provided that you have not undertook intentional steps to change your domicile. If you obtain citizenship/passport at a later point either through investment or other route, in no way should it be implied that you have also changed your domicile. For example, all persons granted citizenship by investment in Cyprus are regarded as non-doms if they choose to reside in Cyprus.

Btw, have toi considered Cyprus as your place of residency? It could possibly give you 0% on income generated from a foreign employer.
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I'm British so can't move to Cyprus post brexit without visa I believe Moving to Cyprus, after Brexit | Comark Estates.

 

[CyprusLawyer101]

niceviewhere said:
I'm British so can't move to Cyprus post brexit without visa I believe Moving to Cyprus, after Brexit | Comark Estates.
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You could as a third country national move to Cyprus under the digital nomad visa, i.e. working for an employer abroad in the IT sector and recieving a minimum of 3500 Eur monthly salary.

 

[niceviewhere]

CyprusLawyer101 said:
You could as a third country national move to Cyprus under the digital nomad visa, i.e. working for an employer abroad in the IT sector and recieving a minimum of 3500 Eur monthly salary.
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I don't believe that will give me citzenship though after a certain number of years?

 

[CyprusLawyer101]

Am not sure if the nomad visa itself would do, since its a new program but in general if you reside in Cyprus for seven years ( now even less under certain conditions ) you could apply for the citizenship.

 

[niceviewhere]

CyprusLawyer101 said:
Am not sure if the nomad visa itself would do, since its a new program but in general if you reside in Cyprus for seven years ( now even less under certain conditions ) you could apply for the citizenship.
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But I don't believe I can legally live there for 7 years as I won't have a visa being British and the nomad visa won't let me stay that long? Or am I wrong?

 

[CyprusLawyer101]

niceviewhere said:
But I don't believe I can legally live there for 7 years as I won't have a visa being British and the nomad visa won't let me stay that long? Or am I wrong?
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For now the digital nomad visa appears to have a maximum duration of 3 yrs.
The possibility of shifting under a different visa category at a later point is real and if you fulfill the nomad visa requirements you are on the right track of fulfilling other resident permit options. If Cyprus is truly within your options I could PM you to discuss the different options. Kindly let me know.