Residency Choices for LLC Owners?

[offshore8]

They don't accept registered agent address with mail forwarding. They want operational address with proof of︂ utility bill for example.

Yes this is a good idea. I was thinking about setting︃ up multiple personal bank accounts in Asian countries and sending money to the tax limit.︄ For example in the Philipines its 250,000 PHP. In Thailand its up to 150,000 THB.︅ Would that be a good strategy?

Thanks for sharing.

 

[GalacticGazelle]

I've spoken with someone locally in Slovakia, and he informed me that⁣ CIT (Corporate Income Tax) is not applicable if you have a US LLC. Therefore, you⁢ would only be subject to the withholding tax (WHT) at 7%. Did he miss something?︀

 

[Don]

A company is a tax resident in the Slovak Republic if it has⁠ its effective place of management in the Slovak Republic, where the key management decisions are⁤ made or accepted. In such case it should be subject to local corporate tax.

 

[GalacticGazelle]

If it's a single-member LLC, demonstrating the substance of the LLC might be⁠ challenging. However, if I establish a partnership, it could potentially present a better scenario?

For instance, LLC1 with myself as the sole member, and LLC2 established as a partnership with⁤ a 50% share held by LLC1 and the remaining 50% by myself. This structure could⁣ enhance the appearance of substance and potentially avoid paying CIT?

 

[JohnLocke]

The original poster would probably be wise to establish a company that has both an‌ office, telephone, electricity and water, and possibly one or two employees who do something. That‍ is the golden rule if you want to avoid too much trouble with the tax⁠ authorities when you do not live in the country where the company is registered.

 

[offshore8]

Slovak tax autority told me that single member US LLC pays tax like⁠ V.O.S in Slovakia which Translates to Publicly Trading company. First we need to Calculate tax⁤ base depending on profits, expenses and social contributions and then i looked up V.O.S is⁣ taxed at 19% From this tax base. Where did your Contact get 7%? Dividends in⁢ Slovakia are 7% But US LLC single member disregarded entity cant paid dividends in Slovakia.︀

 

[GalacticGazelle]

But if I apply the structure as described above with the partnership having two members,‌ would the generated income be considered as dividends only? In that case, would it still‍ be subject to only a 7% withholding tax (WHT) and not Corporate Income Tax (CIT)?⁠

 

[Don]

A foreign company may trade through a Slovak branch, which must be⁢ registered in the Slovak Commercial Register. The taxable income of the branch must not be︀ lower than that which an independent entity (e.g. a Slovak company) would achieve from carrying︁ out similar activities under similar conditions. If the branch’s taxable income cannot be assessed based︂ on its income less costs, as adjusted for tax purposes, certain other methods may be︃ used. A taxpayer may ask the tax authorities in writing to approve such a method.︄

Only WHT could perhaps apply if they treat these payments as dividends, and the company︅ is structured as having no operations in Slovakia, but somewhere abroad.

 

[GalacticGazelle]

So if︀ I understood correctly, if I have an LLC that is structured as a partnership and︁ distributes dividends to me, with zero operations in Slovakia, this could be treated and taxed︂ only at 7% WHT?

If my LLC is a sole member, this approach would not︃ work. Am I correct?

Thanks.

 

[Don]

Possibly. It depends⁤ on many factors.
I guess if LLC owns a restaurant in Bahrain and you receive⁣ the profits as passive income it could work (as an example)

 

[GalacticGazelle]

But will works also for single-member? Or need a partnership?

 

[Don]

Do your self a favour and reflect on the following principle a little before establishing‍ anything: "The tax doctrine of “substance over form” is a judicial creation applied in many⁠ countries. It is often used by the courts in cases where a taxpayer has constructed⁤ a scheme of transactional relationships in documents only or primarily to obtain tax benefits. If⁣ the tax motivation outweighs the business purpose and/or profit objective of the transaction, courts will⁢ decide that “form” (written contracts and arrangements) does not reflect the “substance” (the real deal)︀ and, on that basis deny the intended tax benefits."

 

[offshore8]

I manage the US LLC from abroad. Do you think independent⁠ contractors in Slovakia who don't work only for me are considered as having operations in⁤ Slovakia? And If Yes can I pay them from EU company so US LLC doesn't⁣ have operations in Slovakia? Thanks

 

[Trayon]

Question for Don. PE in Bulgaria is constituted from day one of operating, or there‌ is some time fe 3 ок 6 months? In the case of an sole member‍ US LLC trading with Interactive Brokers?

 

[Don]

In practice, it's illegal⁠ to conduct business activities in Bulgaria with a foreign entity without registering it first as⁤ a branch.
If you want to operate as a PE you need to obtain local⁣ tax number and do accounting according to local regulations.

 

[Trayon]

But if I'm nomad. 3 months here and 3 months there in⁤ the Balkans ?

 

[Arkanoid2021]

What VIsa are‌ you going yo get ? The easiest visa is to form yet another freezone company‍

 

[Cloudbanck]

No, virtual work visa is easier and‍ much cheaper.

 

[Don]

in practice, you can probably get away with it, but‍ it's often not completely legal since normally to work you need to obtain a work⁠ permit

 

[daniels27]

For Bulgaria. How difficult and how expensive is it? Does it allow OnlyFan girls?