Relocation to Portugal? Or maybe Malta or Andorra?

[Marzio]

blast629 said:
Probably Rabat, which is near to Medina. Seems a much "enjoyable" sort of village day to day (already went there and liked much more the vibes than the super crowded zones, at least for my everyday life I mean).
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If that's your cup of tea i highly suggest you to look at Gozo.

More laid back than Malta, more green, less crowd, better beaches in summer.

blast629 said:
Anyhow, I am still curious. Is there any reasonable structure to be paired with MT non dom that might be worth to have a look at?
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I don't know if funding a MT LTD with offshore capital is technically a form or remittance. If not then here you go, you fund a MT LTD with capital and the LTD buys the property.

Having said this, with your level of income i wouldn't buy anything.

Especially in Malta where real estate is overpriced.

 

[blast629]

Marzio said:
If that's your cup of tea i highly suggest you to look at Gozo.

More laid back than Malta, more green, less crowd, better beaches in summer.
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Problem I see with Gozo is that it is far too small. I prefer to be on the Malta island (if price is reasonable), so if wanna move just a bus or taxi is needed, not a boat.

Marzio said:
I don't know if funding a MT LTD with offshore capital is technically a form or remittance. If not then here you go, you fund a MT LTD with capital and the LTD buys the property.

Having said this, with your level of income i wouldn't buy anything.

Especially in Malta where real estate is overpriced.
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I was thinking of a non MT company (therefore CY or Estonia or whatever)... Since a MT company looks more like it would trigger the remittance, since you need to bring the money to constitute it as capital... But it is foreign, maybe it would work...

Great discussion btw!! Getting lot of ideas of what to do/not to do!!

Thanks!

 

[drumtraks]

blast629 said:
So how would you incorporate? With a virtual office? Don't the PT Tax Authorities check for this?
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As long as you are able to receive mail at the incorporation address (or be forwarded to you) it's fine. This address will be used by authorities to reach you. That's all. There is no legal requirement that you live where you incorporate. You and your company are two different juridical persons.

 

[blast629]

drumtraks said:
As long as you are able to receive mail at the incorporation address (or be forwarded to you) it's fine. This address will be used by authorities to reach you. That's all. There is no legal requirement that you live where you incorporate. You and your company are two different juridical persons.
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Problem is the PEM as far as I know: place of effective management.

Aren't you into more risks with a Madeira company than with an offshore company?

I mean Madeira is 5% on the "Zona Franca", which is better than Azores.

Anyhow, the issue is that you get dividend witholding tax, which you don't get with an overseas company, which basically mean, except you fully reinvest and plan to move a place with 0% dividends rate, or I don't see the benefit of that setup?

Thanks for the ideas!

 

[drumtraks]

blast629 said:
Problem is the PEM as far as I know: place of effective management.

Aren't you into more risks with a Madeira company than with an offshore company?

I mean Madeira is 5% on the "Zona Franca", which is better than Azores.

Anyhow, the issue is that you get dividend witholding tax, which you don't get with an overseas company, which basically mean, except you fully reinvest and plan to move a place with 0% dividends rate, or I don't see the benefit of that setup?

Thanks for the ideas!
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I was referring to you living in Portugal mainland and setting up a company in one of the islands. PEM does not apply, it's all Portugal.

 

[blast629]

drumtraks said:
I was referring to you living in Portugal mainland and setting up a company in one of the islands. PEM does not apply, it's all Portugal.
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Are you entirely sure PEM does not apply?

As far as I know, for example Spain, does check this.

To the extent they event track across mainland provinces which may be some % less than others...

Does PT not control this? Would be surprising to me, since afaik PT is sort of "I don't wanna look" with NHRs, but Idk about PT companies...

Any idea in this regard or experience? Do you (or someone you know) have a setup involving this?

Thanks!!

 

[drumtraks]

blast629 said:
Are you entirely sure PEM does not apply?

As far as I know, for example Spain, does check this.

To the extent they event track across mainland provinces which may be some % less than others...

Does PT not control this? Would be surprising to me, since afaik PT is sort of "I don't wanna look" with NHRs, but Idk about PT companies...

Any idea in this regard or experience? Do you (or someone you know) have a setup involving this?

Thanks!!
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Hundreds, not to say thousands, of companies have their shareholders living on the mainland. And yes I have first hand knowledge. Nevertheless I'm not your consultant so”¦ you know the drill 🙂

 

[blast629]

drumtraks said:
Hundreds, not to say thousands, of companies have their shareholders living on the mainland. And yes I have first hand knowledge. Nevertheless I'm not your consultant so”¦ you know the drill 🙂
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That is interesting. Did not know in PT that was "allowed" 'de facto'. As I said, on Spain it is controlled even to that extent.

I know they are even relocating companies based on the assets the company have if the person is living near the assets... Imagine the level of control!

All in all, according to this, a virtual office/coworking + director in Madeira would be a more "bulletproof" solution?

Surprisingly enough, even I checked with some consultants in the past, none of them mentioned this possibility. They all focused either on IFICI, on the 12.5% CIT rule of 50k on low density zones or in the young incentives. But never about Madeira/Azores.

That is why I first I found it surprising.

And btw, I know this is a forum, not a formal consultation but... Since this seems interesting, do you know anyone who may guide me to check in this direction?

Thanks again

 

[JustAnotherNomad]

blast629 said:
How can it be a buffer in terms of the PT authorities?
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There has been a court ruling that said income from a transparent US LLC should be classified as dividends - but in that case, there was some substance in the US (not sure if it was a multi-member LLC), so they were paying some tax in the US. I would expect that this would be quite different from you running everything from Portugal.

blast629 said:
If you any consultant who may help in this, I would be more than happy to get in touch with them.
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I would try https://nonhabitualtaxresident.com - no personal experience, but they seem competent.
Let us know how it goes.

 

[blast629]

JustAnotherNomad said:
There has been a court ruling that said income from a transparent US LLC should be classified as dividends - but in that case, there was some substance in the US (not sure if it was a multi-member LLC), so they were paying some tax in the US. I would expect that this would be quite different from you running everything from Portugal.
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Yes, I knew this. Although as you point I think it was not a 1:1, because it was a multi member LLC.

JustAnotherNomad said:
I would try https://nonhabitualtaxresident.com - no personal experience, but they seem competent.
Let us know how it goes.
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I got in touch with this firm after getting on a talk with another advisor (Bruno Alfonso from taxesinportugal.com) who recommended them: RPBA (Ricardo Palma Borges)

However they replied me (this was 1 month ago) they were too busy and entitled me to another tax advisor, who is, precisely, the one I was referring to as "the only one really knowing how to apply for IFICI" I mentioned.

The RPBA colleague is who told me he would know for certain this month/begining of may, if he knows an easy way to get IFICI.

He anticipated me, because I asked, that the 12.5% incentive on mainland was applicable, and the LLC option could be explored. However we didn't go deep until full confirmation of IFICI working.

So really, you pointed me to the only firm (well, his colleague), that didn't say me "it is too soon to know" but instead "I think I know how to do it, but let me confirm it works before getting any further"

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Anyhow, my ask for an advisor was more focused toward the "PT company dilema" of Madeira vs mainland. However, knowing this, and except you may know any other advisor to get in touch with, I will ask the RPBA colleague as well soon for this topic.

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Thanks again!

 

[JustAnotherNomad]

blast629 said:
So really, you pointed me to the only firm (well, his colleague), that didn't say me "it is too soon to know" but instead "I think I know how to do it, but let me confirm it works before getting any further"
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Tbh, I think that's pretty good. Much better than someone just shooting from the hip.

blast629 said:
Anyhow, my ask for an advisor was more focused toward the "PT company dilema" of Madeira vs mainland. However, knowing this, and except you may know any other advisor to get in touch with, I will ask the RPBA colleague as well soon for this topic.
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Not really, unfortunately, I haven't really explored PT much myself. Would be interested in what you find out!

 

[ITexpert7]

I don't see how the Madeira thing works, I mean even if possible to pay only 5% corporation tax (until 2027 when it is abolished?) you still have to pay personal tax for dividends, at what 28% + the 5% corporation?
Much better a tax-transparent company on the mainland where it's 20% fixed for NHR/IFICI owners, and all the substance is there, no risks or extra expenses.

 

[blast629]

ITexpert7 said:
I don't see how the Madeira thing works, I mean even if possible to pay only 5% corporation tax (until 2027 when it is abolished?) you still have to pay personal tax for dividends, at what 28% + the 5% corporation?
Much better a tax-transparent company on the mainland where it's 20% fixed for NHR/IFICI owners, and all the substance is there, no risks or extra expenses.
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It would make sense if I plan to work with 'corporate' money, but really, IFICI would not play a single role here, since everything would be under the PT company... So IFICI wouldn't even be needed if I opt for the Madeira company.

But I still see some substance problems. And well, if I want to withhold, of course is going to be worse...

I think the setup that makes the most sense is either:

===== OPTION 1: PORTUGAL =====

-PT Limited to apply to IFICI (just a small part of the income goes to the Ltd, and it all goes as salary for me, so CIT does not really matter. Will pay 20% + Social Security, for example on a 1000€/month salary. Which will probably make a sum of 3/4.000€.

(No clue about formation and maintenance costs of an Ltd, but I guess it will easily be 2k formation + 2k maintenance).

-US LLC: bring most of the income via the LLC. Have a nominee director in neither PT and neither US, to create some substance. Bring it is a dividends at 0% since PT sees it as an opaque entity.

(Very low maintenance, maybe 500€/year).

Total paid = 6/7k per year

Pros:

-Near to Spain, can get by car.
-Easy residency.
-Extra options on where to live (mainland, interior, coast, etc)

Cons:

-Requires to have 2 companies
-Doubts on the LLC treatment?

===== OPTION 2: MALTA =====

-Register as non-dom. Pay 5k per year for >35k € income (I read is not needed if not more than 35k is remitted, but I guess MT Tax Authority will be happier if you pay).

-Receive all the income to the LLC, and then transfer to personal account in 3rd party country IBAN: Wise? Revolut? Therefore "nothing is remitted". Do not pay anything for remitted? Or maybe pay on 12-14k per year income as "remitted" to be safer?

Pros:

-Very simple setup (just 1 company)
-Very laxative Tax Authorities

Cons:

-Harder to get in/out Malta
-Doubts on the LLC treatment?
-More limited options on where to live

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I think this pretty much sums up everything discussed here, or am I missing something?

Thank you all!!

 

[jeffbean]

blast629 said:
It would make sense if I plan to work with 'corporate' money, but really, IFICI would not play a single role here, since everything would be under the PT company... So IFICI wouldn't even be needed if I opt for the Madeira company.

But I still see some substance problems. And well, if I want to withhold, of course is going to be worse...

I think the setup that makes the most sense is either:

===== OPTION 1: PORTUGAL =====

-PT Limited to apply to IFICI (just a small part of the income goes to the Ltd, and it all goes as salary for me, so CIT does not really matter. Will pay 20% + Social Security, for example on a 1000€/month salary. Which will probably make a sum of 3/4.000€.

(No clue about formation and maintenance costs of an Ltd, but I guess it will easily be 2k formation + 2k maintenance).

-US LLC: bring most of the income via the LLC. Have a nominee director in neither PT and neither US, to create some substance. Bring it is a dividends at 0% since PT sees it as an opaque entity.

(Very low maintenance, maybe 500€/year).

Total paid = 6/7k per year

Pros:

-Near to Spain, can get by car.
-Easy residency.
-Extra options on where to live (mainland, interior, coast, etc)

Cons:

-Requires to have 2 companies
-Doubts on the LLC treatment?

===== OPTION 2: MALTA =====

-Register as non-dom. Pay 5k per year for >35k € income (I read is not needed if not more than 35k is remitted, but I guess MT Tax Authority will be happier if you pay).

-Receive all the income to the LLC, and then transfer to personal account in 3rd party country IBAN: Wise? Revolut? Therefore "nothing is remitted". Do not pay anything for remitted? Or maybe pay on 12-14k per year income as "remitted" to be safer?

Pros:

-Very simple setup (just 1 company)
-Very laxative Tax Authorities

Cons:

-Harder to get in/out Malta
-Doubts on the LLC treatment?
-More limited options on where to live

=============

I think this pretty much sums up everything discussed here, or am I missing something?

Thank you all!!
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Check Bulgaria

 

[blast629]

jeffbean said:
Check Bulgaria
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How does Bulgaria okay here? I guess it is somewhat similar to Georgia, North Macedonia and other similar Warren countries right?

As far as of know is not among my priorities, I prefer western Europe. Although maybe I should visit it soon to have a better pic hehe!

Thanks!

 

[jeffbean]

blast629 said:
How does Bulgaria okay here? I guess it is somewhat similar to Georgia, North Macedonia and other similar Warren countries right?

As far as of know is not among my priorities, I prefer western Europe. Although maybe I should visit it soon to have a better pic hehe!

Thanks!
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Cheap flights, you can pay 7.5% income tax and have European health card, also drive back and forth to Spain.

 

[Alonzo]

jeffbean said:
also drive back and forth to Spain.
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That is absolutely unrealistic

 

[jeffbean]

Alonzo said:
That is absolutely unrealistic
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What once a year? Stop along the way and enjoy Eastern Europe Italiy Croatia Greece

 

[Alonzo]

jeffbean said:
What once a year? Stop along the way and enjoy Eastern Europe Italiy Croatia Greece
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OP said that he wants to drive back to Spain whenever he wants which means in a couple of hours he is there already. Not 2 full days from borders to borders

 

[jeffbean]

Alonzo said:
OP said that he wants to drive back to Spain whenever he wants which means in a couple of hours he is there already. Not 2 full days from borders to borders
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Malta being discussed though