Cheapest country to establish company with substance?

[aage]

After reading all the stuff around for years, one thing jumps into my eye every time! SUBSTANCE - could we get a complete definition of that it means to have a company with SUBSTANCE ?

Where would it be cheapest to setup such a company without to live in the same country? I believe Romania and Bulgaria as well as Portugal are the main destinations close to Europe.

I believe if we hire a real person director and some worker for a small office, 50 square meter, some signs outside, a phone and electricity we should have the SUBSTANCE part don't we?

 

[bountymounty]

Romania Micro company... would just like know have expert knowledge on how to set this up with substance.

Found the below great article in mentor group gold but still some questions are open:
https://www.offshorecorptalk.com/th...rom-registration-to-real-office-hiring.36168/

 

[aage]

Romania Micro company... would just like know have expert knowledge on how to set this up with substance.

Found the below great article in mentor group gold but still some questions are open:
https://www.offshorecorptalk.com/th...rom-registration-to-real-office-hiring.36168/

I didn't remember to have seen that thread. Romania may be the best choice for now.

According to what else I read any such setup will still not protect you from CRS and get taxed from profits of such structures. But it is a solution to keep your money out of the hands of the taxman until you need it for personal use.

Can someone confirm?

 

[Sols]

Depends on how you set up the substance. If you do it by hiring people and want to keep it within EU (based on the countries mentioned so farr), it's probably Bulgaria. From what I've seen, some other low-tax/low-salary options like Romania and Hungary have payroll and other administrative costs which end up making them cost quite a bit more than Bulgaria.

Outside of EU, Latin America has some interesting options like Costa Rica. Salaries and costs are low, office rents cheap, and it's quite reputable (bordering on unknown/unfamiliar).

According to what else I read any such setup will still not protect you from CRS

Correct, reporting will still take place under CRS.

and get taxed from profits of such structures.

If all you do is act as a passive shareholder, the company would pay its taxes wherever you set up substance. So you can legally avoid local (where you live) corporate income tax this way.

But if you are effectively managing the company, it gets less clear. Shareholders are allowed some influence over how a business is run but you need to be careful not to become a director.

But it is a solution to keep your money out of the hands of the taxman until you need it for personal use.

Depends on who your tax man is but generally, yes, it can work if all you get taxed on are dividends. You can keep deferring those.