Remote software developer generating mid 6 figures, where to incorporate?

[broogie26]

Hi,

Currently looking to incorporate our 2 man software development business. Income is sitting at around mid 6 figures/year but based on demand that could grow to a million next few years. We are both working remotely (I'm living in NL, the other South America). Was looking a Dutch BV but CT isn't very favorable. Been recommended US LLC (Delaware), Portugal, Cyprus (but none of us want to spend much time there lol) and Dubai FZ LLC (no CT and 100% foreign ownership sounds attractive but also skeptical).

Since I'm living in NL currently I would have my income taxed to hell and back if I pay myself a high salary, so would likely end up leaving money in the company hence a low or non existent CT would be beneficial.

Generally just looking for tips, if anyone been in a similar place or know of someone I can throw money at to put together a plan that would be appreciated. Too damn busy over here.

Cheers,
J

 

[0xDEADBEEF]

Are you willing to move to Dubai or somewhere else?
Generally speaking, how much of the mid 6 figures would be profit?

 

[jafo]

broogie26 said:
Hi,

Currently looking to incorporate our 2 man software development business. Income is sitting at around mid 6 figures/year but based on demand that could grow to a million next few years. We are both working remotely (I'm living in NL, the other South America). Was looking a Dutch BV but CT isn't very favorable. Been recommended US LLC (Delaware), Portugal, Cyprus (but none of us want to spend much time there lol) and Dubai FZ LLC (no CT and 100% foreign ownership sounds attractive but also skeptical).

Since I'm living in NL currently I would have my income taxed to hell and back if I pay myself a high salary, so would likely end up leaving money in the company hence a low or non existent CT would be beneficial.

Generally just looking for tips, if anyone been in a similar place or know of someone I can throw money at to put together a plan that would be appreciated. Too damn busy over here.

Cheers,
J
Click to expand...

Come up with a list of countries you would like to move to. It doesn't have to be by name. For example, you can say: A place similar to the NL.

 

[aiden1]

In the same situation, currently based in the US as a non-resident. I hold a passport from a north african country with low scrutiny and do all of my transactions through a Singapore LTD. Would love ideas on best ways to proceed from here

 

[Roo]

I'm in a similar situation using a Singapore PTE LTD, it's quite good but not tax free, probably going to set up a US LLC unless I find a better option which is cheap to maintain (unlike Singapore) and with easy banking. Would be interested in recommendations as well.

 

[wellington]

Note it's not just the wallet that records IP that's also collected on the blockchain
Years ago we wrote contract that blocked IPs from US miners, and naturally sanctioned states.

Transactions take a little while to go through but it was a compliance idea, you can also reject interacting wallets from specific countries

Likewise you can build a profile against wallet addresses

 

[broogie26]

0xDEADBEEF said:
Are you willing to move to Dubai or somewhere else?
Generally speaking, how much of the mid 6 figures would be profit?
Click to expand...

Nah unlikely, not very attracted by that place. Looks flashy on the surface but not sure it has much substance for me 😀

The profit would depend a lot on the income tax situation. If I find a solution with minimal income tax profit would be low as I would just pay myself the profits as salary or dividends (at least if the CT is also low).

jafo said:
Come up with a list of countries you would like to move to. It doesn't have to be by name. For example, you can say: A place similar to the NL.
Click to expand...

Hard to say. I am still considering Cyprus because I miss the sun and with non dom status it's admittedly very attractive (and we might be eligible for IP box). I do generally prefer countries that widely speak English to make things easier for me, but I appreciate the structured nature and cleanliness of western EU countries although those are usually the ones with highest income tax..

Last edited: Jun 14, 2024

 

[Marzio]

broogie26 said:
Was looking a Dutch BV but CT isn't very favorable.
Click to expand...

If you want to stay in NL some more time and enjoy some gouda cheese while cycling under the rain i'd suggest you to take a look at the NL IP Box which could lower your tax rate to 7%.

In CY you'll lower tax rate to 2.5% but i would gladly pay 5% more for access to better banking.

https://ipbox.cy/

 

[broogie26]

Marzio said:
If you want to stay in NL some more time and enjoy some gouda cheese while cycling under the rain i'd suggest you to take a look at the NL IP Box which could lower your tax rate to 7%.

In CY you'll lower tax rate to 2.5% but i would gladly pay 5% more for access to better banking.

https://ipbox.cy/
Click to expand...

Thanks for the input. This is an assumption on my end but I feel it might be much easier to get a favourable IP box ruling in Cyprus given they are trying so hard to get abroad investment compared to NL, but feel free to correct me. Income tax is still a big problem here, not interested in paying 40%+ when afaik I could be paying 15% or less in Cyprus.

Also, could you explain to me a bit better what you define as better banking?

**** the rain btw, I don't know if it's global "warming" or what is going on but i'm getting sick of s**t weather here 😡

Last edited: Jun 14, 2024

 

[Marzio]

broogie26 said:
I feel it might be much easier to get a favourable IP box ruling in Cyprus
Click to expand...

That's fair to assume.

NL has gone crazy since last year with the introduction of conditional WHT on dividends, interestes and royalties.

broogie26 said:
Income tax is still a big problem here, not interested in paying 40%+ when afaik I could be paying 15% or less in Cyprus.
Click to expand...

Well, in CY you could get tax free salary up to 19K / year + tax free dividends at the end of the year.

🙂

Get in touch with @CyprusLawyer101 to see if you could access CY IP box.

Last edited: Jun 14, 2024

 

[turmpy]

19K a year is not a salary, how would you pay your rent from this ?

 

[broogie26]

Marzio said:
That's fair to assume.

NL has gone crazy since last year with the introduction of conditional WHT on dividends, interestes and royalties.



Well, in CY you could get tax free salary up to 19K / year + tax free dividends at the end of the year.

🙂

Get in touch with @CyprusLawyer101 to see if you could access CY IP box.
Click to expand...

Cheers! Regarding dividends, can you only pay this to yourself at the end of the year or how does that work? I assume you wouldnt want to pay yourself several times to avoid paying CT each time.

Would love to know more about the IP box @CyprusLawyer101, PM me and I can show exactly what we do 🙂

turmpy said:
19K a year is not a salary, how would you pay your rent from this ?
Click to expand...

Well if you boost yourself with dividends couldnt it work?

Last edited: Jun 14, 2024

 

[Marzio]

turmpy said:
19K a year is not a salary, how would you pay your rent from this ?
Click to expand...

19K it's the maximum salary that's tax exempt which you integrate with any dividend amount you desire.

broogie26 said:
dividends, can you only pay this to yourself at the end of the year or how does that work?
Click to expand...

Yes, dividends usually are distributed at the end of the tax year if the company did make a profit.

 

[broogie26]

Marzio said:
19K it's the maximum salary that's tax exempt which you integrate with any dividend amount you desire.



Yes, dividends usually are distributed at the end of the tax year if the company did make a profit.
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Usually as a rule of thumb or by law? Would the government start to ask questions doing this? Just always seemed like such a braindead way of paying less income tax 😀

 

[JustAnotherNomad]

You'll have to move. As long as you live in NL, both you and your company will be taxed according to NL tax rates. It doesn't matter where you incorporate.

 

[Cloudbanck]

JustAnotherNomad said:
You'll have to move. As long as you live in NL, both you and your company will be taxed according to NL tax rates. It doesn't matter where you incorporate.
Click to expand...

Exactly. But after you have moved to a country with reasonable or no taxation, where you set up your company matters. You want to minimise paperwork, costs, taxes and have good banking access. Id say the best given those criteria is a US LLC, but New Mexico is better than Delaware as it costs less and has no state level annual reporting requirement.

As to where to live, that is very much a personal subjective choice, but I would like to raise the possibility of having multiple home bases - you dont have to live the whole year in one place. This is also very advantageous from a tax perspective.

 

[Marzio]

JustAnotherNomad said:
As long as you live in NL, both you and your company will be taxed according to NL tax rates.
Click to expand...

Well I thought that was obvious since he said that he is considering Cyprus.

I only gave him an extra push by talking about the Ip Box.

broogie26 said:
Usually as a rule of thumb or by law?
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As a rule of thumb consider dividends payable at the end of the fiscal year. For your CY company it will be at the end of the year.

 

[JustAnotherNomad]

Cloudbanck said:
Id say the best given those criteria is a US LLC, but New Mexico is better than Delaware as it costs less and has no state level annual reporting requirement.
Click to expand...

That would really depend on where OP will be living. A US LLC might or might not make sense. For example, in Cyprus I don't think it would be a good option.

 

[JohnLocke]

JustAnotherNomad said:
That would really depend on where OP will be living. A US LLC might or might not make sense.
Click to expand...

in which case in your opinion would this make sense? do you mean if he stay in the Netherlands?

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[JustAnotherNomad]

It could make sense if he's in a tax-free country, if he's a PT (no tax residency) or in a country with territorial tax that doesn't care about PEs.
For example Bahrain, maybe Malaysia, maybe Panama, maybe Paraguay, possibly Thailand (if staying fewer than 180 days per year), possibly Hong Kong (not sure), China.