0% Tax Offshore Company

[GiveMeFreedom]

Hi everybody,

In which country could I set up an offshore company with a 0% tax set up where I’d pay no sales taxes, and no taxes when paying dividends? Is UAE the best option? I’d like something quick and simple to set up.

Also, if you could suggest some countries where I could live and receive dividends from that company (would it be considered foreign sourced income?) without having to pay any taxes, that would be great!

 

[aniglo22]

And I want a Unicorn !
You should describe your company business and if you will actively manage it , if you want someone to help you .

• What are your requirements for living standards ?
• What is your estimated annual turnover ?
• With which countries you will conduct business ( as some have laws against tax havens e.g "Steueroasenabwehrgesetz" in Germany ) ?
• What are you prepared to spend on your "setup" ( For low-earning businesses, the cost of complying with company regulations and maintaining an offshore structure can sometimes outweigh the tax savings, making it more economical to simply pay taxes in a low tax jurisdiction )
• What are the requirements for your business e.g Payment processing , multi currency banking etc.. ( Be prepared for significant costs for introductory services, "high" deposit requirements and high banking fees. )

You might be interested in Sark , Cayman Islands .
You should also beware of withholding taxes for royalties and analyze the DTA's of you chosen jurisdiction.
But you should also consider the significantly higher cost of living in tax-free jurisdictions, as well as indirect taxes such as import duties

 

[GiveMeFreedom]

Thanks for your help!

- For living standards, something like Mexico or Panama would be fine, but the higher, the better
- Business model: Website with affiliate marketing
- Annual turnover of +/- $250K
- Will conduct business with multiple countries, it depends on where the company paying the commissions is based
- I'm not sure about the costs of maintaining the business
- For banking I could use something like Wise, maybe?

 

[aniglo22]

Thanks for your help!

- For living standards, something like Mexico or Panama would be fine, but the higher, the better
- Business model: Website with affiliate marketing
- Annual turnover of +/- $250K
- Will conduct business with multiple countries, it depends on where the company paying the commissions is based
- I'm not sure about the costs of maintaining the business
- For banking I could use something like Wise, maybe?

Offshore structuring for such a turnover may not be feasible.
Instead I recommend traveling through Latin America and the Caribbean and to take advantage of digital nomad visas that offer tax exemptions.
List of possible Destinations : Anguilla, Antigua and Barbuda, Barbados, Bermuda, Cape Verde, Costa Rica, Curacao, Dominica, the Dominican Republic, Ecuador, Grenada, Montserrat, Panama, Peru, Seychelles, and Uruguay. (Source : https://nomadsembassy.com/digital-nomad-visas-with-no-tax/#hlfxj )
This list may be outdated, so you should check each visa program to confirm it still exists .
Be sure to check the visa duration, whether it's extendable, and the concrete tax exemptions(if it's also local sourced income ) each location offers. And also plan a route , because most visas are only valid for 1-2 years.

You could set up a U.S. LLC or a Belize LLC (important : "designate them as disregarded entity for tax purposes " ).
If you're able to "disguise" your crypto affiliate company as a normal marketing company , you might gain access to "normal" banking services .
You should read the policies of each EMI or bank, especially the section "Prohibited/Restricted Business Activities," to determine if you are eligible .(e.g. wise prohibits buying/selling crypto to exchanges even if crypto affiliate marketing is not directly banned you probably will face issues)
Alternatively, you still have the option of offshore banks that have higher risk appetites, such as Paxum . You will pay high fees so beware of that .

You could also try to live only on crypto and use a Seychelles IBC (search the forum for more infos ) and use crypto cards for daily expenses . But I would assume you will face some issues when trying to proof your income for visa applications .

You could also consider exploring Malta or Cyprus and operating your business through an offshore company and don't pay corp tax. This is illegal, but the tax authorities are not actively enforcing it. However, I would not recommend it.

 

[Shories]

Hey hey so some quick recommendations that you can consider are:

- Maybe in your case I would have as primary location RAK (Ras Al Khaimah). Why? Fast setup, zero tax, no requirement for physical presence. You can even get residency visa but don't need to live there.
- I don't recommend Wise at all nowadays, high risk of account freezes and limited for business. As primary bank I would try United Arab Bank in UAE (easier than EMIs, only thing is that minimum deposit is about $25k and requires physical visit). As backup you can go Bank of Georgia or TBC in Georgia (but you need to get the Georgia residency card, open an LLC there, first open a personal account then business account, make a consulting agreement between RAK and Georgian LLC and bank through Georgian LLC). If you want to try an EMI, FIO Bank (in Czech Republic) will probably accept you, no physical presence needed ofc but you will need an agent which can cost about €2000. As last option I would also look into MCB Bank in Mauritius (they accept RAK companies), full remote opening, just need a local company secretary which can cost around $1500, but it's pretty stable banking.
- As for residence in your case, you could look into Paraguay instead of Panama/Mexico. Why? With this setup, you would pay 10% tax on foreign income, easy residency, only need to visit once every 3 years, can get citizenship in 3 years, much cheaper than Panama and Mexico and no CRS reporting yet.

Ideally:
- UAE Company collects affiliate revenue
- Pay yourself "consulting fees" instead of dividends
- Get Paraguay residency

 

[aniglo22]

Hey hey so some quick recommendations that you can consider are:

- Maybe in your case I would have as primary location RAK (Ras Al Khaimah). Why? Fast setup, zero tax, no requirement for physical presence. You can even get residency visa but don't need to live there.
- I don't recommend Wise at all nowadays, high risk of account freezes and limited for business. As primary bank I would try United Arab Bank in UAE (easier than EMIs, only thing is that minimum deposit is about $25k and requires physical visit). As backup you can go Bank of Georgia or TBC in Georgia (but you need to get the Georgia residency card, open an LLC there, first open a personal account then business account, make a consulting agreement between RAK and Georgian LLC and bank through Georgian LLC). If you want to try an EMI, FIO Bank (in Czech Republic) will probably accept you, no physical presence needed ofc but you will need an agent which can cost about €2000. As last option I would also look into MCB Bank in Mauritius (they accept RAK companies), full remote opening, just need a local company secretary which can cost around $1500, but it's pretty stable banking.
- As for residence in your case, you could look into Paraguay instead of Panama/Mexico. Why? 0% tax on foreign income, easy residency, only need to visit once every 3 years, can get citizenship in 3 years, much cheaper than Panama and Mexico and no CRS reporting yet.

Ideally:
- UAE Company collects affiliate revenue
- Pay yourself "consulting fees" instead of dividends
- Get Paraguay residency

Are you sure about that he doesn't need to pay Paraguayan tax ?

Asimismo, se considerarán rentas de fuente paraguaya las obtenidas por la realización de actividades en el exterior no comprendidas en los numerales precedentes por parte de los contribuyentes de este impuesto, salvo que por las mismas el contribuyente haya pagado en el exterior un Impuesto a la Renta, cualquiera sea su denominación, a una tasa igual o superior a la tasa de este impuesto. Para este efecto y a fin de evitar la doble imposición internacional se aplicará lo dispuesto en el artículo 134 de la presente ley y la Administración Tributaria establecerá los requisitos y el procedimiento para la demostración del pago.

Translation :

Likewise, income obtained from the performance of activities abroad not included in the preceding paragraphs by the taxpayers of this tax shall be considered as income from Paraguayan source, unless the taxpayer has paid an Income Tax abroad, regardless of its denomination, at a rate equal to or higher than the rate of this tax. For this purpose and in order to avoid international double taxation, the provisions of Article 134 of this law shall apply and the Tax Administration shall establish the requirements and the procedure for the demonstration of the payment.

Source : Ley Nº 6380/19 "DE MODERNIZACIÓN Y SIMPLIFICACIÓN DEL SISTEMA TRIBUTARIO NACIONAL.",Artículo 64. Renta Neta. (source : https://www.dnit.gov.py/web/portal-institucional/w/d-ley-n-6380-19)


According to my judgement he would need to pay tax in Paraguay and this setup wouldn't work.

 

[Shories]

Are you sure about that he doesn't need to pay Paraguayan tax ?

Translation :

Source : Ley Nº 6380/19 "DE MODERNIZACIÓN Y SIMPLIFICACIÓN DEL SISTEMA TRIBUTARIO NACIONAL." (source : https://www.dnit.gov.py/web/portal-institucional/w/d-ley-n-6380-19)


According to my judgement he would need to pay tax in Paraguay and this setup wouldn't work.

Ah yeah you are right, I wanna mention that I'm not giving a consultancy here in the forum tho but just structure ideas to brainstorm.

I guess we could replace Paraguay with Malaysia (MM2H), Georgia (but would pay 1% tax and if dividends, another 5%) or UAE at this point