Most tax efficient residence in EU: Bulgaria, Romania, Cyprus?

[Ade]

You mean in general to be safe in any country or do you say that based‌ on experience in Cyprus? I mean do they really check CreditCard payments and ask for‍ receipts in Cyprus?

@Dasilva I don't know personally but from what I read getting these⁠ 0% exemptions is not easy and even then you need to reinvest the taxes you⁤ saved:
Source: Bulgaria invites investors with 0% corporate tax

 

[Dandyline]

Depends on your home country, they⁠ can ask you to prove that you live in the new country for at least⁤ 183 days per year. Normal things to use as evidence are CC-statements, rental contract, utility⁣ bills, flights.

Worth to mention that most people never hear a thing after leaving their⁢ country.

 

[Ade]

@Dandyline Thanks. OK, now I understood. You mean proofs for your home country.
I agree.‌ I think this will be very individual depending on home/destination, whether you have a successful‍ business at the time you leave, double tax treaties,...

May I ask did you live⁠ / incorporate in Cyprus / Bulgaria? Or which location did you choose?

 

[Benzouser]

The plan was to live un-notice no register for 1-3yr︁ . .i got EU passport, i have disability pension so its taxed alrdy as my︂ only income. . so i dont need a new tax id etc. . .
Why i dont want to reg into the new country is that i have debt collectors︃ huting me from my native EU country so i want to lay low in etc︄ RO or BG. . .

 

[Marketint]

You can easily do this in Bulgaria. More people from⁢ the EU move there without registering, and live there for many years, at least up︀ until a few years ago.

As long as it’s just debt collectors, it’s fine. You︁ should know that Bulgarian police frequently check the identities of people on the streets. This︂ has happened to me three times in about a year.

 

[JimBeam]

They just stop you and ask for your IDs?
What do you tell them?⁠ That you live here or you're just a tourist/visiting family or friends there?

 

[Marketint]

Yes ask for passport or id and what I was doing here. Several‍ times in traffic, but not because of driving. In the city center. 1x was standing⁠ next to my car. Local license plate, normal car. Maybe as a foreigner you attract⁤ attention quickly. In any case, they were not suspicious situations.

I had a registration and⁣ such of residence/id card , but I do know of people without registration who simply⁢ said they were staying in a house. No idea what exactly they are checking.

 

[Benzouser]

Okey great. . . just⁣ want to protect my tax resident in Asia, as i dont want ot reg me⁢ in EU... and some debts in other EU coutries so dont want my native country︀ to know where im staying. . .. .. so you think BG better bet then︁ RO if want to stay low.

 

[Marketint]

I don’t know about Romania. I think BG is still ok for this. Some⁣ houses there even haven’t an address so you can’t register yourself here. I was offered⁢ to register myself in my accountant address because the house that I had rented didn’t︀ had an address. It’s no problem to live in such houses.

I don’t know how︁ this situation is now. This is for houses outside the city center.

 

[Ade]

@Marketint
The id checks sound weird...would be interesting why they do that.
You said you‌ had a residency in BG. Did you run a business and how was your experience?‍ I'm considering BG and Cyprus.

 

[Marshal]

If you like city life,‍ don't go to Cyprus. Comparing to any big Bulgarian city it's just boring. To be⁠ frank I disliked Cyprus almost from the start. Never wanted to return.

As to ID⁤ checks. I have been to Bulgaria a couple of times recently and apart from the⁣ airport and a hotel, no one else wanted to see my ID. Even though police⁢ cars can be seen frequently, no one bothered me. Maybe he just looks too different︀ from an average Bulgarian ns2

 

[Marketint]

Yes, I owned a business‍ in Bulgaria. It was very easy. I paid a local accountant to handle everything for⁠ me, including setting up a bank account and obtaining a residence card, all for a⁤ few hundred euros.

Accounting is slightly more expensive since it requires monthly submissions. Please be⁣ aware of the bureaucracy involved. Some examples: Transferring ownership of a car takes a day,⁢ and it's the same for a scooter.

They are generally easygoing people, though.

Maybe I was just unlucky.︄ I have more of a western European/Scandinavian look.

 

[Ade]

Thanks for sharing. Yes, Cyprus is really small⁠ - the whole island has less citizens than Sofia alone. But I'm not sure how⁤ long I'd stay actually. Planning is to stay only for 2-3 months per year so⁣ for city life I could go elsewhere and stay in "winter" in Cyprus at ~15°.⁢ In that case ease of doing business / costs / bureaucracy / reputation / ...could︀ be more relevant. And Cyprus seems to be surprisingly expensive and complicated.

May I ask︁ where you decided to move?

Thanks! I got a few quotes and prices don't seem to have︅ changed much. Its all quite reasonable, especially when compared to Cyprus where lawyers charge 150-300€︆ for VAT registration alone. Only difference seems to be in banking. I was told it︇ became quite difficult to open a business bank account.

You write "owned", why did you︈ leave and if you allow me to ask: Where did you go?

 

[Marketint]

Yes it’s much cheaper in Bulgaria. I needed a kind of import number for a webshop⁣ and a lawyer drive to me from Sofia to Varna and fixed it for me⁢ for 500 euro or something .

Actually I really didn’t want to leave Bulgaria at︀ that time but I didn’t move alone there and i was in a complicated situation.︁ Because of circumstances I moved temporarily to Western Europe and later out of Europe. I︂ know western immigrants that live happy in Bulgaria for very long time.

And banking is︃ easy if you have residency and EU passport. Just hire locals to help you that︄ didn’t target foreigners on internet.

I think it’s still a great country to live a︅ long as the didn’t raise their taxes. Especially for Europeans it’s easy to move their.︆

 

[Don]

With certain businesses, you can even get zero tax︃ setup in Bulgaria. (ok, still employment taxes and potentially VAT)

Estonian residency + Estonian company︄ with a branch office in Bulgaria can be a valid zero tax structure:
1) on︅ the Estonian level, there is no tax before profit distribution and no WHT, and combined︆ with Estonian tax residency, the total tax is 0% if redistributing branch profits to yourself︇
2) Bulgarian branch - profit tax is by default 10%, but if you form the︈ branch in an area with high unemployment (applies to Roughly 2/3 of the country), you︉ could get a 100% exemption from CIT. It applies to taxable persons who carry out︊ production activities.

If a municipality is no longer included in the list as a result︋ of increased employment, the taxable person can retain the right to tax relief for a︌ period of 5 years from the year in which the municipality was excluded from the︍ list.

 

[Ade]

1) Honestly I︀ never understood the advantage of Estonia. Its tax free but only until you distribute profits,︁ isn't it? When paid out you pay 20% or am I wrong?
2) From what︂ I understood there are quite some obligations to benefit from this tax excempt. And even︃ then from what I read you have to invest the saved taxes back into production.︄

 

[MukaTukTuk]

I would definitely consider Madeira IBC (5% tax rate), or Canary Islands (4% tax rate).‌

 

[bountymounty]

What's the requirements to fall under the 4% tax rate,‍ as far as I remember there are some?

 

[Marzio]

Didn't know about that opportunty!

75K investment in fixed assets on smaller islands + 3 people employed

100K investment in⁤ fixed asset on bigger islands + 5 people employed

 

[MukaTukTuk]

For the 5% tax rate on Madeira,‍ the requirement is a 75,000 investment in Madeira, and employing one Madeira resident (which could⁠ be yourself, if you become a Madeira resident).