Best country / setup to minimize tax? (software biz, ~400k, eu)

[banafinfodafuggiano]

Germany is about the last place I would go to live. Romania has nature, it is good once you are alone. Switzerland is the same. It is good once you are in nature. The government... yes better than elsewhere but not something to be proud of.

Honestly, from what I heard I highly doubt that it makes sense. Even at 0% tax, you end up paying to much for the accountant with the mandatory audit. There are reasons why the locals in Hong Kong use BVI and the like.

You're complaining about a 8% Tax in Hong Kong and a $500 monthly fee for accountants?

I'm from Canada and I pay $2,000 USD a month in book keeping, 25%+ Corporate Tax and almost 47% in Income Tax.

What the guy is getting in Romania is a big deal and he doesn't even even know it.

 

[daniels27]

You're complaining about a 8% Tax in Hong Kong and a $500 monthly fee for accountants?

I think what I was trying to say was that many Chinese factories I know are still the Hong Kong agents but with BVI companies. They all shifted when Hong Kong introduces mandatory audits. We used to pay a bit more than 8.5% tax in Switzerland with no cap and no audit just a couple of years ago.

I'm from Canada and I pay $2,000 USD a month in book keeping, 25%+ Corporate Tax and almost 47% in Income Tax.

Yes, I know. But I had a good friend. she was living in France and paid 300 EUR for the summer kids day care for the whole 3 months. Her brother paid 30k HKD per month for the same service. Taxes in Canada are high, but at least you also get quite a lot for it.

What the guy is getting in Romania is a big deal and he doesn't even even know it.

Same as above. He gets a good deal for himself. But not for the kids. And it is a problem for the society too.

But yes, I totally agree with you. If you don't have family and are not employed in a normal position, you just don't get back enough to justify the high taxes.

 

[JohnLocke]

I think what I was trying to say was that many Chinese factories I know are still the Hong Kong agents but with BVI companies. They all shifted when Hong Kong introduces mandatory audits. We used to pay a bit more than 8.5% tax in Switzerland with no cap and no audit just a couple of years ago.

Sorry I don't get this, but you mean the agent shifted to an BVI company?

Why would they not want the audits, like everywhere else you run a company it is mandatory?

 

[Frank Funk]

Just had a call with a company who helps set up Panama entities, was recommend to me by someone I trust so think it's a solid option.

I would offramp crypto, the process is 100% remote and includes:
- Creating a company in Panama, 7 days
- Opening a company bank account, 30 days
- Opening a company account on Bitstamp or Bitfinex, 45 days

You also need a personal bank account but that's simple.

Once set up, you send funds to the CEX, then to your company bank account and then to your personal bank account paying 5% tax.
Afterwards I plan to move it to IBKR.

You do not have to have an employee, accountant or anything for the company.

The service provider I spoke to handles the whole procedure, cost is $6'000.


Also interesting cause you can get residency - more paperwork and visits needed.

 

[daniels27]

Sorry I don't get this, but you mean the agent shifted to an BVI company?

Why would they not want the audits, like everywhere else you run a company it is mandatory?

Yes. I mean there are Chinese factories that have been operating Hong Kong companies with Hong Kong agents for years. Once a mandatory audit was introduced, the agents recommended to shift the company to BVI and many did so. The audit is between 1500 and 2500 USD per year, about the same as the BVI company costs.

I also talked to the big incorporating agents and most of them also told me that it will be cheaper to run 2 Singapore companies with both below the threshold than having to do the audit.

The main problem with the audits in those cases is that the minimum fees are quite expensive, there are not many willing to touch a company with less than 100 transactions for less than 1k USD. I understand the importance of it once the company has substantial local turnover or employees in order to avoid sudden bankrupcies. At this scale the audits are not just redoing the bookkeeping, but in many cases like Credit Suisse, audits did not help to stop problems from happening.

 

[wellington]

Germany is about the last place I would go to live. Romania has nature, it is good once you are alone. Switzerland is the same. It is good once you are in nature. The government... yes better than elsewhere but not something to be proud of.

Honestly, from what I heard I highly doubt that it makes sense. Even at 0% tax, you end up paying to much for the accountant with the mandatory audit. There are reasons why the locals in Hong Kong use BVI and the like.

BVI you have to do full blown accounting now…

 

[doomslayer123]

Do not make the mistake of opening a US LLC, I made this mistake opening in Delaware. (0% tax)
The entire structure including romanian micro was created as a bulletproof obtaining also EAN number from the irs, Uk Holding Nominee, etc.
The problem appeared that no one managed to open the bank account for my states offshore llc in jurisdictions that are not on the black / gray lists.
I had a safe option to open in Belize or Panama - Europac, but during the period of opening procedures on Europac they entered into liquidation and migration of the clients being investigated by all the surveillance agencies in the states and from Europe. ( thank god I was late ) - this option was presented to me not only from the romanian part but also when I was in Cyprus others proposed them!!!
So I found out too late that no one is risking opening bank accounts for an offshore llc which are in jurisdictions that are subject to regulations in force today, so if you use bank accounts from the jurisdictions that are on the black / gray list when the money will be sent, the transaction will be either blocked / freezed being asked for a lot of supporting documents that you will not be able to put at their disposal, or the transactions will be returned automatically.
Remaining only the very risky option to empower the nominee to open a bank account but then you can wake up one day and that money will be bye bye, or the option to use the Darks that is also very very very risky.
If you want to open something you have to do it without involving US territory or jurisdictions that do not communicate based on the treaties Fatca or CRS.
Currently I use a structure created on EMI but I don't know for how long I will be able to benefit from so I also make plans to leave on Dubai or Portugal especially because I feel that from 2025 romanian authorities will implement the progressive taxation. ( si atunci sa vezi cu cata foame o sa bage mana in buzunare )!!!!

*** legat de presupunerea ta ca sunt niste incapabili ca nu ti-au gasit paypal-ul tin sa te anunt ca gresesti, ai fost doar norocos, eu in acest moment sunt in postura de a astepta calculari penalitati si accesorii dupa ce in vara am primit o scrisoare de la antifrauda in care se mentiona ca trebuie sa dau niste explicatii pentru niste sume cumulate in valoare de cateva sute de mii depistate ca fiind rulate in ultimii ani, desi erau niste neconcordante in ceea ce aveau ei ca si informatii sumele se pupau cu realitatea. Am platit repede catre bugetul de stat cat am considerat eu ca le-as datora fara penalitati ca sa scap de penal si am angajat o mare firma de avocatura de la noi ca sa ceara dosarul administrativ ca sa vedem ce informatii au " dosar administrativ pe care avocatii ieftini si slab pregatiti nu-l vor cere niciodata ".
Eu am ramas socat ca au aflat de acele sume deoarece crede-ma sunt ultra precaut, nu de scrisoarea lor, ci de faptul ca au reusit sa afle.
De ce iubesc eu Romania? Pentru ca, asa cum a spus si Andrew Tate, coruptia imi este si mie accesibila nu ca in statele unite sau in alte tari in care coruptia le este accesibila doar politicienilor, in concluzie dupa ce am impins unde trebuia am aflat cum au reusit.
Informatia ti-o dau gratis: a intrat in vigoare si la noi directiva DAC7, adica tot ceea ce tine de platforme digitale, intr-un cuvant, sume de bani provenite din activitati ce tin de sisteme informatice/online se raporteaza tot, ca sa ai scapare ori apelezi la Darks ori pleci in jurisdictii cu taxare zero pe venit sau companii. Sunt vreo 7 tari in lume.
Succes, treaba o sa se imputa din ce in ce mai tare, varianta cea mai sigura este se ne caram, dar nu in UE, ci in afara uniunii, UE se aseamana din ce in ce mai tare cu un lagar!
Sclavii se vor supune pana in panzele albe, eu unul n-am facut-o si nici nu o voi face vreodata, este de datoria mea sa imi pazesc banii si o sa actionez in consecinta!
La multa muie globalistilor si guvernului romaniei!

In order not to be misunderstood, I agree to pay taxes, but within the limits of normality, not to have the government put its hand in my pocket up to the elbow or to be robbed by inventing new taxes and fees!
It is our duty to protect our money, I don't care what the ordinary slave say, he who obeys to everything, slaves are slaves either because they didn't have vision and courage or due the fact because they were born by other slaves and raised in the spirit of obedience this reason being why they remained slaves.
The state needs slaves, not visonary people, they need credt card slaves, mortage slaves, f**k'em all!!!!

I wonder if you took out money from your PayPal, straight to your Romanian (RON) bank account. If you did, it's no wonder they found out about it as all RON and Romanian bank accounts are completely visible to ANAF ( RO tax office).

In any case, I agree dodging them is not a viable long-term strategy. Moving is. I think Cyprus is not a bad alternative within the EU, but we'll see, there are some nice alternatives outside of the EU as others mentioned as well.

About Andrew Tate and his statement that in Romania corruption is accessible to everyone: Not to say Romania is some corruption-free place, that would be ridiculous, but you certainly can't just flash a bit of money around and do whatever you want as this guy thought. Very foolish or at least naive guy to think that, when people with real wealth and power (prime ministers, billionaires) like Adrian Nastase, Dan Voiculescu, Copos, etc did jail time.

What the guy is getting in Romania is a big deal and he doesn't even even know it.

I mean, it's kind-of tough to get excited about getting "just a little" robbed (1/8 of everything you make) and getting diddly-squat in return.
In any case, the current rate of robbery is insufficient according to OECD and IMF's recommendations to Romania, so it's gonna go up in 2025.

 

[JustAnotherNomad]

We used to pay a bit more than 8.5% tax in Switzerland with no cap and no audit just a couple of years ago.

But how did you take the money out? The big issue with Switzerland is usually the withholding tax on dividends.

 

[Marzio]

But how did you take the money out? The big issue with Switzerland is usually the withholding tax on dividends.

Yes, those cheese eaters want money to stay in the country and not leave so you have two options:

1. form a holding in a favourable jurisdiction but AFAIK you need to have some substance otherwise 35% WTH on dividends will still apply.

2. form a Swiss branch instead of a full fledge Swiss company so there are no WHT on profits sent to the parent.

 

[JustAnotherNomad]

1. form a holding in a favourable jurisdiction but AFAIK you need to have some substance otherwise 35% WTH on dividends will still apply.

Yes, hence my question.

2. form a Swiss branch instead of a full fledge Swiss company so there are no WHT on profits sent to the parent.

I believe they are working on closing that loophole.

 

[Marzio]

I believe they are working on closing that loophole.

What makes you think that?

In many countries branch profits aren't subject to WHT

 

[daniels27]

But how did you take the money out? The big issue with Switzerland is usually the withholding tax on dividends.

It was my own company and I paid reduced personal income taxes on the dividends.

If you want to avoid the withholding tax on dividends, you need to run them through Malta, Ireland, Hong Kong.