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Best EU structure: Romania micro-company (1%) + Georgia high net-worth (%5)

Min Park

Min Park

Active Member
Jul 22, 2018
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#1
Hello,

I am a software developer with none-US/EU passport, and want to leave in EU (France/Germany/Swiss).
Because i don't want to leave in Georgia or Romania 183 days every year, i think that will be best setup for me.
1. Romania micro-company - Corporation tax 1% (with 1 employ)
2. Georgia tax residence - Dividend 5%
For banking i will use Revolut that support Romania companies and in total i will be paying 6% of all income and can travel EU without problems (just can't stay in same place more then 183 days).
For what i checked cost is ~5,000 EUR for this full setup.

Is that a good setup ?

BTW anyone here know if i can set more the 1 micro-company ?
 
#2
First of all, that 183 rule is not really true. You need to move your "center of life" as this is the subject you are taxed on. For example you have your Georgia tax residence but still have a gym contract in germany, mobile contract in germany, a rental agreement, german insurance, go for medical treatments to germany etc. etc. than your "center of life" is in Germany and this is where you will be taxed. No matter if you have been 200 or 50 days in Germany. So you need to make sure to move your "center of life" frequently and cut as many ties as possible with your home country. The list which defines your "center of life" is long and there are some stuff on it which is unexpected like "where your kids go to school" or "where your wife lives" etc. All in all the possibility is high it will come to the point where a court will decide if you have your center of life in country X or not. They will make an all in all overview and decide then. For example I am allowed to keep my german mobile phone number because I meet a lot of other criteria. Sadly these rulings are very "individual" and you can't tell for 100% if you fullfill point x,y,z that you are a PT. I suggest you ask your local financial authority for a written confirmation for every step you take to become a PT and ask what else is needed until they confirm that you center of life is not in for example Germany and or that your center of life is moving with you. (Spoken for Germany, France is very similar)

When you managed to move your center of life, or managed that your center of life officialy moves with you, then you can just look for a reputable jurisdiction which offers 0% tax. I can recommend the USA for this (if you don't do turnovers on US soil). If your PT status is official you can do this all in your own name and don't need an offshore provider. Costs you around 500$ and you save a lot of accounting trouble.
 
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#12
NicolasMaduro said:
Romania´s 1% scheme won´t work for you since no more than 20% of the income can be consulting/services.
Click to expand...
Consulting is still there IIRC, but services is possible.

Edit:

To benefit from these, the following are applicable:
  • it obtains its sources of income from activities other than banking, insurance or gambling;
  • it has sources of income, other than in consulting and management in over 80% of total revenue (as a result a Romanian micro company can only have a maximum of 20% of its income originating from consultancy or management activities);
  • its income has not exceeded the amount of EUR 1 million;
  • the state, public authorities or local authorities cannot be shareholders in the company.
 
#14
Maybe a combination of EU and Georgia could work for you. As some other people already mentioned you shall also address visa requirements in the EU if you plan to live there.
For taxation only virtual zone in Georgia is perfect for any IT business. I suggest you visit Georgia and see if you like the country, maybe you want to become tax residence there too.
 
#15
It all depends on how much money it is your trying to save.
There are many different options costing from €5000 to €15000 per year. If freedom of movement, robust banking are your prerequisite then look into the UAE. Then it doesn't matter if your centre of life is there as its tax free country.


Options

1. If you buy an apartment there for between $80-$150K you get a residency card.

2. Register a company which will cost about $10K per year then you also get residency.

Your bank account will be there and they do multicurrency accounts so you are good to receive payments in different currencies.

Most importantly is peace of mind, which some people say you cant buy but I have just told you how.
 
#17
khinkali said:
In Georgia? Most of that is just turnover requirement. The salary requirement (which you pay 20% on) is quite small.
Click to expand...
How much are the typical running costs.
Im sure there is a minimum your supposed to pay in a monetary value, regardless of the 20% salary requirement.
 
#18
Regading the running costs in Georgia:
In Georgia you will have to pay around 100 to 200 USD for accounting if you choose a professional company, for a good address like from Regus around 100 USD per month for the virtual office, can be more of course depending on the services you need, and then for staff: it starts with 350 USD but it really depends on your criteria.
 
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#19
The turnover (not profit) requirement is 50k GEL (about $16k) per residence permit per year.

The salary requirement is 5x minimum subsistence level of approximately 200 GEL per month. So that's about 1000 GEL or $325 per month, on which you pay tax.

Running costs (bookkeeping, accounting, office, etc) will vary a lot depending on the level of service you need.
 
#20
So its $20K a year minimum!!

UAE has options which will cost you less than $10K per year running costs.
I would recommend checking it out overall because it doesn't have a residency requirement but you can take advantage of residency tax rates.

On average running costs are $10K per annum.

Im sure there is an offer at the moment for tech and freelance registration at the moment. I will check and let the forum know.

Happy to discuss options with you via PM.
 
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