Biz solutions for digital nomads 2020

[JohnLocke]

You will always have the risk that you must defend yourself against the tax office in the country your live in for more then 180 days. I'm just saying it, don't think it is that simple.

 

[Gediminas]

You will always have the risk that you must defend yourself against the tax office in the country your live in for more then 180 days. I'm just saying it, don't think it is that simple.

I can just second this. We had several cases where clients had to climb Everest to prove their home country they are no longer spending 180+ days in the country.

 

[Reboot]

so in principle for a year or two i could avoid to get a salary out ( i mean i could, by paying 20% to estonian gov on dividends), and live off savings or by doing some extra job invoiced in my country of residence for which i would pay taxes there.

If are willing to give 20% as dividends in Estonia why not open a company where you are tax resident now. Where are you from? Italy?

 

[pierino]

If are willing to give 20% as dividends in Estonia why not open a company where you are tax resident now. Where are you from? Italy?

Not currently resident in italy, but my question was that:
- can i have substance in estonia without being resident, but only e-resident? thinking now about those services creating a private limited with an office and some person of reference
- can i buy real estate with the company profits? (seems so, but it then depends on where)

Ideally why not opening such a company, use it to invoice until i get enough capital to buy a property, that will be owned by the company, then stop, leave it idle, and simply use the property (The problem of how to survive in the meanwhile is a separate problem and can be dealt separately).

One potential issue: I have contacted a few weeks ago such a service in estonia, and they usually recommend to use a TW account for the money, as it's hard to get a physical account (they say not possible).
Either way, where would this "account" be resident?

Cyprus is interesting in general, but i guess for me now it would require a bit more planning. I am considering to start looking into it, as the idea seems nice and 100% legal (on paper)

 

[Gediminas]

Not currently resident in italy, but my question was that:
- can i have substance in estonia without being resident, but only e-resident? thinking now about those services creating a private limited with an office and some person of reference
- can i buy real estate with the company profits? (seems so, but it then depends on where)

Ideally why not opening such a company, use it to invoice until i get enough capital to buy a property, that will be owned by the company, then stop, leave it idle, and simply use the property (The problem of how to survive in the meanwhile is a separate problem and can be dealt separately).

One potential issue: I have contacted a few weeks ago such a service in estonia, and they usually recommend to use a TW account for the money, as it's hard to get a physical account (they say not possible).
Either way, where would this "account" be resident?

Cyprus is interesting in general, but i guess for me now it would require a bit more planning. I am considering to start looking into it, as the idea seems nice and 100% legal (on paper)

Real estate owned by Estonian companies should have to be used for business purposes, i.e. rented or similar. If Estonian company allows the shareholder to use real estate owned by the company most likely it would be treated as deemed dividends and taxed accordingly (first – profit tax and second dividends withholding tax). So I recommend you to double-check this with these Estonian lawyers. Small rental prices or pretending that the company’s registration address is in this apartment might not convince tax authority.

 

[pierino]

Real estate owned by Estonian companies should have to be used for business purposes, i.e. rented or similar. If Estonian company allows the shareholder to use real estate owned by the company most likely it would be treated as deemed dividends and taxed accordingly (first – profit tax and second dividends withholding tax). So I recommend you to double-check this with these Estonian lawyers. Small rental prices or pretending that the company’s registration address is in this apartment might not convince tax authority.

Yes they say it should be rented, but renting abroad is normally not easy, so i guess it's ok to rent on the cheap side. And typically such rent will mostly be used to cover the costs of such an estate (state taxes plus running taxes such as building shared costs).
Alternately couldn't i simply not rent it saying the money wouldn't be worth the wearing such a renting would cause, and the investment is done in the scope of the estate worth increase, and then simply use it myself?

Finally, i was wondering if it would be ok to buy an apartment from myself (assuming i have one).
So let's say, i have one apartment in country X, worth 100k. Estonian company has 100k cash. I sell the apartment to the company for 100k, i get the cash as a property sale (not suspicious usually in any country, provided one then changes the residency address), and the company gets the apartment?

 

[Gediminas]

Yes they say it should be rented, but renting abroad is normally not easy, so i guess it's ok to rent on the cheap side. And typically such rent will mostly be used to cover the costs of such an estate (state taxes plus running taxes such as building shared costs).

Alternately couldn't i simply not rent it saying the money wouldn't be worth the wearing such a renting would cause, and the investment is done in the scope of the estate worth increase, and then simply use it myself?

Finally, i was wondering if it would be ok to buy an apartment from myself (assuming i have one).
So let's say, i have one apartment in country X, worth 100k. Estonian company has 100k cash. I sell the apartment to the company for 100k, i get the cash as a property sale (not suspicious usually in any country, provided one then changes the residency address), and the company gets the apartment?

I believe you understand that Estonian “E-Resident” program will not change your tax residency to Estonia. Tax residency is much more complex question than being a member of Estonian “e-residency” program.

Capital gains derived from sale of real estate is usually taxable in the country where such real estate is located, so sale of real estate to Estonian company might cause tax consequences. So you need to check this before the sale of real estate.

Also, I advise you to double-check with your Estonian lawyers the following: how likely is that Estonian tax authorities will consider acquisition of real estate as deemed dividend distribution, taking into account that you will be living in this apartment or it would be rented for the symbolic price.

 

[pierino]

Any recommendations for someone trusted who offers services such as assistance for applications for NDR residency in cyprus, company registration, bank account opening, and, possibly (if needed, i'm not sure how complex this is to do alone) accounting?

 

[Gediminas]

Any recommendations for someone trusted who offers services such as assistance for applications for NDR residency in cyprus, company registration, bank account opening, and, possibly (if needed, i'm not sure how complex this is to do alone) accounting?

If your definition of the word "trusted" is about ptofessional services and competence - I can help you with that. Check out the post in my signature.

 

[pierino]

I am wondering, since Cyprus has dual agreements with a lot of countries, to what degrees does Cyprus share information with other governments for those people applying and getting granted an NDR residenship?
If i were a German citizen, and apply for the Cypriot NDR residenship, create my company there, start emitting invoices from it. Does Cyprus exchange any info about me with Angela?

 

[John Andrews]

Does Cyprus exchange any info about me with Angela?

yes they do, they are both in the EU and even if they weren't they still would....not sure what you're trying do to anyway; become resident in Cyprus & non-resident in Germany, problem solved.

 

[JohnLocke]

Most often if you live within the EU you will have to relocated if you want to avoid local taxes. Alternative, you make so much moeny so you can consult a tax lawyer who can help you with a professional business setup in a different country in order for the company to pay taxes there and you go free.

This would require that you have money to backup the outcome from the lawyer of course.

 

[pierino]

yes they do, they are both in the EU and even if they weren't they still would....not sure what you're trying do to anyway; become resident in Cyprus & non-resident in Germany, problem solved.

Thanks. Is it public info what kind of info they exchange and if they do that proactively or reactively?
I mean, when i emigrated and immigrated into a new country, i had to manually communicate to my government i was an "emigrant", and i would be paying taxes elsewhere, or else they would double tax me.
Likewise, every time i change my residential address, i have to manually communicate to my embassy the new address, because the local gov does not let them access these info.
So i wonder, if i immigrate into Cyprus, what info are going to be shared *automatically* ?

Reason i'm asking is because the country im paying taxes in has a nasty exit taxation law, that requires everyone who lived for more than 10 years (and i just fit in this category) to report and pay additional taxes for 3 years after they emigrate.
Rule made to hit retirers that would be hitting me too.

 

[Gediminas]

Thanks. Is it public info what kind of info they exchange and if they do that proactively or reactively?

https://en.m.wikipedia.org/wiki/Common_Reporting_Standard

 

[pierino]

Thanks! Tbh in the wikipedia page the section "Information Exchanged" is (perhaps deliberately) very limited and high level.
I now started to go through the doc, but at a first glance i can't find many details, and now i can reconnect to previous discussions i read in here, where users were claiming that each country interprets these agreements differently, because they aren't clear.
I wonder if i could find the answers i am looking for in the mentor group. @Admin?

 

[fshore]

Thanks. Is it public info what kind of info they exchange and if they do that proactively or reactively?
I mean, when i emigrated and immigrated into a new country, i had to manually communicate to my government i was an "emigrant", and i would be paying taxes elsewhere, or else they would double tax me.
Likewise, every time i change my residential address, i have to manually communicate to my embassy the new address, because the local gov does not let them access these info.
So i wonder, if i immigrate into Cyprus, what info are going to be shared *automatically* ?

Reason i'm asking is because the country im paying taxes in has a nasty exit taxation law, that requires everyone who lived for more than 10 years (and i just fit in this category) to report and pay additional taxes for 3 years after they emigrate.
Rule made to hit retirers that would be hitting me too.

They don't report your residency there automatically. Bank accounts are reported automatically if you are deemed tax resident in your previous country by the bank.

 

[pierino]

They don't report your residency there automatically. Bank accounts are reported automatically if you are deemed tax resident in your previous country by the bank.

Thanks, yeah the question here is not what the bank will do, but what the immigration office/tax department of Cyprus will do, if they will proactively share anything with any other gov. The bank will report to wherever they believe we are resident in, as far as i understand.

 

[fshore]

Thanks, yeah the question here is not what the bank will do, but what the immigration office/tax department of Cyprus will do, if they will proactively share anything with any other gov. The bank will report to wherever they believe we are resident in, as far as i understand.

Yes and that is the question I just answered.

 

[lavel]

great to read about all this info. Isn't it covered already in endless threads. CRS, TIEA's, AOI's and tax liability - all end with the same. You get reported to the country of where you live!

 

[Gediminas]

Thanks, yeah the question here is not what the bank will do, but what the immigration office/tax department of Cyprus will do, if they will proactively share anything with any other gov. The bank will report to wherever they believe we are resident in, as far as i understand.

In your example Cypriot authorities would not exchange information with Germany, i.e. you might establish a company in Cyprus, get a resident permit (“yellow slip”), be employed, get TIN (tax identification number), etc. However, the bank or other payment institutions might exchange information. For example, if you open an bank account and still use your German “utility bill” the Bank would identify you as a German tax resident and send information on automatic basis (under CRS).