Offshore company + self employed in EU. How to structure?
- Thread starter hfs
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If possibile i would form a UK LTD + nominee shareholder with foreign branch exemption so you would pay only branch CIT and everything remitted to the UK parent will not be taxed, dividends from UK will be tax free as well.
UK has a better reputation than Gibraltar and more banking opportunities.
UK has a better reputation than Gibraltar and more banking opportunities.
Is it really that easy/convenient tax wise? really 100% legal?︀
- Do you know the current state of things in regard of US-LLCs owned by︁ a single member, living in Switzerland?
I am stuck at the Federal Court sentence of︂ quite a few years ago linked here:
https://www.unilu.ch/fileadmin/fakultaeten/rf/opel/Opel_Taxation_LLC.pdf
and that said bad things...
in short︃ it says that if you don't elect as corp in the US and the LLC︄ is pass-through, then you (swiss resident) should pay taxes on the us-llc revenue as if︅ it was personal income in switzerland...
e.g. you pay PIT plus uncapped social security contribs︆ too on the whole lot.
It would be nice to know how things really︌ are if there's a swiss resident/expert here.
- Do you know the current state of things in regard of US-LLCs owned by︁ a single member, living in Switzerland?
I am stuck at the Federal Court sentence of︂ quite a few years ago linked here:
https://www.unilu.ch/fileadmin/fakultaeten/rf/opel/Opel_Taxation_LLC.pdf
and that said bad things...
in short︃ it says that if you don't elect as corp in the US and the LLC︄ is pass-through, then you (swiss resident) should pay taxes on the us-llc revenue as if︅ it was personal income in switzerland...
e.g. you pay PIT plus uncapped social security contribs︆ too on the whole lot.
It would be nice to know how things really︌ are if there's a swiss resident/expert here.
If I remember correctly, you told once the story of your friend that had a problem with Italian revenue agency (BTW how did the story end?) so I guess you live in that area so I did a search on how many US LLC have a Swiss branch.
Now, of those i found a very interesting result.
I'm pretty sure that this is single member LLC with a CH resident managing it.
You can dig deeper into that single member LLC by buying a status report on the business records service portal.
I know that document, here' a︁ visual flow chart of how tax transparent entities are treated in Switzerland
By creating a Swiss branch you︅ are getting everything taxed at the branch level, then you can keep profits in the︆ branch and pay yourself a salary and / or business profits.
Now, of those i found a very interesting result.
I'm pretty sure that this is single member LLC with a CH resident managing it.
You can dig deeper into that single member LLC by buying a status report on the business records service portal.
I know that document, here' a︁ visual flow chart of how tax transparent entities are treated in Switzerland
By creating a Swiss branch you︅ are getting everything taxed at the branch level, then you can keep profits in the︆ branch and pay yourself a salary and / or business profits.
I assume this would not be required if the parent company (e.g. an "offshore" LLC as mentioned above) is tax free anyway?
Only in case a UK LTD is used for example, where we want to shift its existing corporate tax residency to Switzerland thanks to the Swiss branch. (I actually found one such company in the branch register, it's called "Denta Consult GmbH Limited" and it's a dormant company for UK purposes, as expected.)
Correct?
Only in case a UK LTD is used for example, where we want to shift its existing corporate tax residency to Switzerland thanks to the Swiss branch. (I actually found one such company in the branch register, it's called "Denta Consult GmbH Limited" and it's a dormant company for UK purposes, as expected.)
Correct?
In case the parent company is tax free anyway you don't need the treaty.
Take a look at this Seychelles company with a Zug branch (Seychelles doesn't have a treaty with CH)
Take a look at this Seychelles company with a Zug branch (Seychelles doesn't have a treaty with CH)
Hello! I was wondering if you have any updates on this?
I am a swiss resident and I am thinking about the foreign entity with Swiss branch setup, although I cannot see clearly the picture. Would be great to have any feedback on this from someone who dig into this.
I am a swiss resident and I am thinking about the foreign entity with Swiss branch setup, although I cannot see clearly the picture. Would be great to have any feedback on this from someone who dig into this.
I have similar idea. I have US LLC as pass trough entity, I am Eu resident. I was planning to use it as pass trough entitiy and pay inome tax on income coming from USA LLC as divdends. Also LLC is in Wyoming and they dont exchange information with my country. Does this plan has a flaw i have not tought of ?
Depending on your tax residency country a US LLC could be see as transparent or opaque. If LLC is seen as opaque then income from LLC will be seen as divendends and taxed as dividend in your country, otherwise it will be taxed as personal income.
In any case by managing your LLC from EU you are making the LLC tax resident in your home country. You should be paying your country's CIT and social contributions if you︀ want to do things by the book.
In any case by managing your LLC from EU you are making the LLC tax resident in your home country. You should be paying your country's CIT and social contributions if you︀ want to do things by the book.
Depends on the jurisdiction.
You might also be able to establish a branch office for︀ the LLC in an EU jurisdiction.
Then, you could invoice this branch office as a︁ sole proprietor from another jurisdiction.
I haven't verified the below, but it looks like a︂ US LLC with a branch in Estonia + Sole proprietor in Slovenia could be a︃ decent setup:
You might also be able to establish a branch office for︀ the LLC in an EU jurisdiction.
Then, you could invoice this branch office as a︁ sole proprietor from another jurisdiction.
I haven't verified the below, but it looks like a︂ US LLC with a branch in Estonia + Sole proprietor in Slovenia could be a︃ decent setup:
- The branch of US LLC in Estonia - All undistributed corporate profits are︄ tax-exempt
- The sole proprietor in Slovenia - 4% effective tax (maximum 150k EUR per year)︅ + to get an exemption from relatively high social taxes in Slovenia, you need an︆ A1 certificate, which you can acquire for EUR 215,82 per month in Estonia.
Yes, a local director should be appointed.
Form A1 certifies that social tax is paid for the employee in the country which has issued the certificate. The certificate allows the employee to prove to their other countries of employment that no social security contributions are required there. For 2.6k/year you will be covered with social security, and you can get it from your EE operation.
It should work out as follows:
Form A1 certifies that social tax is paid for the employee in the country which has issued the certificate. The certificate allows the employee to prove to their other countries of employment that no social security contributions are required there. For 2.6k/year you will be covered with social security, and you can get it from your EE operation.
It should work out as follows:
- 5.7% tax on︀ 150k EUR income (need to hire one employee) - (income can be greater, but max︁ 300k EUR in 2 years)
- or 9.2% on 50k EUR income.
That's the idea, yes. Pay absolute minimum you can for the certificate. You can technically avoid paying a salary and just pay the minimum social tax.
Otherwise, you need to pay social tax in Slovenia, which is relatively high.
In the EU if you have social insurance in one country, you are anyway covered across the whole EU.
Otherwise, you need to pay social tax in Slovenia, which is relatively high.
In the EU if you have social insurance in one country, you are anyway covered across the whole EU.
It's improbable that for such a small-scale structure, they would start cross-border tax investigations, which is expensive.
It's important to note that an additional benefit of operating as a branch office is that your identity will not be reported as UBO in this jurisdiction (or EU UBO register) since branch offices are exempt from UBO reporting, so consequently information about them shouldn't be reported between authorities as smoothly compared to companies.
It's important to note that an additional benefit of operating as a branch office is that your identity will not be reported as UBO in this jurisdiction (or EU UBO register) since branch offices are exempt from UBO reporting, so consequently information about them shouldn't be reported between authorities as smoothly compared to companies.
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