Country selection advice

[Learner458]

I currently run a proxy service as a one man operation. I currently want to move my company offshore outside of EU since the VAT and taxes are insane. Also move out of EU for limited tax liability. What I currently found was that Nevis LLC seems promising but I’d love to hear your thoughts.

The company is currently revenuing 5 figures and about 75% of the payments are crypto and 25-30% are in card payments. Any suggestions for banking and if you got a better choice then nevis would be much appreciated

Also if you’ve got any personal favourite agencies to go threw, i would love to hear it.

 

[daniels27]

While it works on paper, please note that supplying digital services to EU customers remains subject to EU VAT even if your company is in Nevis.

Why not forget about banking and just only do crypto? Card payments from EU customers are reportable to the EU and they will chase you for VAT in the long run.

 

[Learner458]

Oh I can pay VAT it’s just I am currently paying VAT on all transactions since I can’t prove that my customers aren’t in the EU without comprising on their anonymity so I am sadly paying VAT on all transactions. When I move my company the only VAT paid is the one on the transactions in the EU which I’m fine with.

 

[Learner458]

Since currently it’s 2 forms of evidence to prove non vat liability which can’t be done without as I said, comprimising anonymity.

 

[daniels27]

Oh I can pay VAT it’s just I am currently paying VAT on all transactions since I can’t prove that my customers aren’t in the EU without comprising on their anonymity so I am sadly paying VAT on all transactions. When I move my company the only VAT paid is the one on the transactions in the EU which I’m fine with.

Yes, then any offshore company would do. But where are you living?

 

[Learner458]

Sweden but I’m planning to move in near future so that I am only liable for Swedish earned income.

 

[daniels27]

I think you better move first and then start your business.

What do you mean by Swedish earned income? You work in Sweden as employee?

 

[Learner458]

No but income earned within Sweden like from customers. Also I was thinking it’s better to move the company first since otherwise 20% of my revenue is going straight to VAT

 

[Learner458]

Also which company formation agency would you recommend?

 

[JustAnotherNomad]

No but income earned within Sweden like from customers.

Income isn't sourced in Sweden just because you have Swedish customers. This is only relevant for VAT.
Swedish income would be a salary paid by a Swedish company or a Swedish pension, etc.

Also I was thinking it’s better to move the company first since otherwise 20% of my revenue is going straight to VAT

You have to be really careful about this. If you found the company while you're still in Sweden, the company will be liable for tax in Sweden, especially if the company is just you.
If you move afterwards, you will be moving a Swedish company abroad, which can trigger tax, especially if you sell the company later.

It's better to clearly cut your ties and start fresh.

 

[Learner458]

So basically just take the hit of paying 20% vat for now and then move the company? I mean mostly asking since I am losing out on thousand due to VAT. Also i might’ve framed it wrong, I meant the same thing as you said that it’s money from a Swedish company but I mean the company is in nevis so why does it matter?

 

[daniels27]

So basically just take the hit of paying 20% vat for now and then move the company? I mean mostly asking since I am losing out on thousand due to VAT. Also i might’ve framed it wrong, I meant the same thing as you said that it’s money from a Swedish company but I mean the company is in nevis so why does it matter?

Why 20%? Sweden is 25% VAT. And besides that you need to need to use EU OSS for VAT payments. I am pretty sure that you have the customer's ip address, and the country of the card he used for payment.

And no, you don't take the hit, you take an airplane and fly out elsewhere and take your credit card and pay for your own health insurance, etc. Your are not losing out on VAT, you are paying for the services you receive while you live there.

VAT on digital serivices is due where the customer lives. It does not matter where you incorporate. (Yes, if you have really nothing about the customer, Sweden may ask you to pay VAT on all sales. But that is only if your documentation of customer's origin is bad.)

 

[Learner458]

Yeah but I run a proxy service where all customers care about is anonymity. I mean I really can’t sacrifise their anonymity for a pay day since I value my business measures above everything.

 

[Learner458]

Also sweden is 25% but thats if you divide revenue by 1.25 but i do multiplied by 0.8 so i call it 20%

 

[daniels27]

Yeah but I run a proxy service where all customers care about is anonymity. I mean I really can’t sacrifise their anonymity for a pay day since I value my business measures above everything.

If they sign up without the use of a VPN or by using their credit card, you can of course record that information.

 

[Learner458]

Yes but one issue, most use a vpn and they only providing 1 proof of evidence. I need 2 uncontradicting ones. Also I mean card payments if I’m offshore I’ll just pay it on the cards registered in European banks or card payments in european country origin but that would be at max 10% of payments. I still save VAT on 90% of payments.

 

[daniels27]

Also sweden is 25% but thats if you divide revenue by 1.25 but i do multiplied by 0.8 so i call it 20%

While there are countries where corporate taxes are deductible and others where it is not, I think for VAT and taxes on distributed dividends, the case is clear. Why turn things around? It is like this one (here the other way around):

Post in thread 'Best LEGIT Country to Incorporate to minimise Corporate Tax?'

Sep 6, 2023

Estonia being marketed as 0% tax is one of the biggest scams in this industry. It's true until it's time to distribute profits. Then you're facing a potential net 25% tax bill. Sure, it might say 20% on distribution but if you read the fine prints, you'll find the 20/80 rule. There are use cases for Estonia, though, of course.

Unless you're comfortable committing tax evasion in Canada, it might be too late to take action if the deal has to go through quickly. You're tax resident in Canada and will continue until you stop being tax resident, which doesn't necessarily happen the moment you...

• Sols

• 

 

[daniels27]

Yes but one issue, most use a vpn and they only providing 1 proof of evidence. I need 2 uncontradicting ones. Also I mean card payments if I’m offshore I’ll just pay it on the cards registered in European banks or card payments in european country origin but that would be at max 10% of payments. I still save VAT on 90% of payments.

Then you force them to use an address in the country they are from with their IP. Trust me, they are smart enough to use a VPN from a non-VAT place to finish the order without having VAT added.

 

[Learner458]

Ohh some of my customers really aren’t or actually most. Also I’d much rather have the case be that I don’t have to worry about VAT except for some instances. Also want to move my company for privacy reasons and asset protection reasons.

 

[Learner458]

But I mean would you say that Nevis would be a good option for an offshore company formation?