Currently living in Malaysia and Dubai, wanting to have another base in Europe - specifically Estonia. Thoughts?

[MiddleEuroAsia]

Hello guys, how are you?. this is my first time registering an email and posting a thread here. So, please be kind

Anyways i'm happy to be a part of this community, and If u don't mind, here is a bit of background about me!

I consider my self a global citizen. i have multiple passports (European, Caribbean, south american...etc) and I'm currently having 2 residencies and living in two bases ( two houses, both owned) ,One in Dubai for my middle east operations and one in Malaysia under MM2H for my Asian activities, and i live in both bases completely completely tax free.

I chose Dubai because it's a zero tax country, and I chose Malaysia because it is a territorial tax country with no CFC rules, so I pay zero taxes on my foreign income.

I also have two online business (completely legal, no shady operations) one is is registered in Hong Kong and the other is a DMCC freezone company registered in Dubai.

So, overall life is good.

My question - operation Europe

now it's time for me to add another base and i'm looking at Europe right now

I was interested in 2 countries. Switzerland and Estonia.

Switzerland is kinda of meh for me right now for various reasons and I might consider it in the future. but for now I'm focusing on Estonia.

i want to actually live part of the year in Eur-I mean Estonia and and I'm sure this will trigger tax residency (and I want that, I want the regular Estonia ID card)

Why I want the regular Estonian ID card? I want it to be able to open local bank accounts and be able to utilize other services as a "legal Estonian resident". I don't want the shiny E-residency that do absolutely nothing.

i will actually rent a house there and I will register my address and this will trigger my tax residency. but I don't want to pay taxes on the dividends that I will receive in Estonia. and I heard that I could receive my dividends tax free "theoretically" as I have local employees, physical offices, pay bills ..etc in the countries that my companies are registered in.

User @JustAnotherNomad said in another thread that there I could do that and i'm asking if he could shine alight in this issue. Or if anyone has an experience regarding paying zero taxes on dividends or the Estonian regular residency in general (not the E-residency). it will be highly appreciated as most of the info in the internet today talks about the E-residency program not the regular one. Thanks in advance!

 

[JustAnotherNomad]

You can only receive dividends tax free if tax has been paid and Estonia taxes worldwide income.

I would go with Cyprus, Malta, Georgia or Lithuania - or Russia. The first three would allow you to receive dividends tax free, even if no tax had been paid. Lithuania and Russia allow you to be resident without being tax resident. You could try to do the same in Estonia, but that would only be possible under a tax treaty, while in Lithuania and Russia, it should be possible under domestic law, which would be much better. But if I were you, I would just go with Cyprus.
In any case, please discuss this stuff with a lawyer and don’t just rely on what I’m telling you. It’s only stuff I’ve read, I don’t actually have practical experience with such a setup.

 

[MiddleEuroAsia]

@JustAnotherNomad thank you so much for getting back to me, I really appreciate it!

what I wanna do is, I want to live a "normal" life. I do this in my other bases too, I have some toys (cars, motorcycles ..etc), go to car tracks, I go to gyms, play mma, go hiking, skydiving, paramotor and other outdoor activities and I try to live 3/4 months in Malaysia and 3/4 in Dubai and the rest travelling around the world. so life is good and I want it to remain that way.

Point is, i want to to do my "routine" activities in Europe too. That's why I considered Switzerland in the first place, as there are lots of nature and outdoor activities, the same goes for Estonia too.

but Cyprus is an island detached from the EU, reputation is kinda of meh and internet speed is miserable and Malta are filled with old money, lots of insufferable boomers and some activities that I'm not interested in.

the "availability" and "wide variety" of services that i'm interested in are not there so It's not just about taxes.

I wanna enjoy the comfort that I have in Malaysia and Dubai in Europe too. and so far Estonia and Switzerland (maybe Andorra- might look into it) are the only European countries that check all the boxes for me. The problem is taxes and as you said I will consult with a tax advisor and will report back here regarding any updates!. Thank you

 

[CaptK]

@MiddleEuroAsia is there a particular reason to go to Estonia.

 

[JustAnotherNomad]

As far as I know, Estonia always considers you tax resident once you’re resident, and taxes your worldwide income. But tax residency can be shifted to another country under a tax treaty, as long as your center of life is there and not in Estonia or wherever you’re living. A good lawyer should be able to help with that. If you go down that route, it should be possible in pretty much any country, including Switzerland, as long as there is a tax treaty with the UAE/Malaysia. But I guess a certain risk will always remain, you’d always have to prove that your center of life is not in Europe.

Why not Russia? Russia doesn’t consider you tax resident, unless you spend 183+ days in the country, no matter how close your ties to the country are otherwise. I’ve heard they are considering lowering this to 90 days, but that’s still plenty. Should be really low risk from a tax perspective. It just wouldn’t give you a Schengen visa, if that’s relevant.

Lithuania has more vague rules, but I guess it should still be fine. There may be other countries in Eastern Europe with similar rules. Slovenia maybe? I haven’t checked.
Maybe Ireland as a non-domiciled resident?

 

[MiddleEuroAsia]

@MiddleEuroAsia is there a particular reason to go to Estonia.

@CaptK Yeah I like Estonia because the way they handle things - I don't know - it's just ..different!?

My main reason for being in Europe is to be closer to my European clients and the European market in general. In Estonia Everything is being handled digitally, The laws are crystal clear and just easy to navigate. investing there is easy and there are lots of VCs and investors there, networking is easy, the tech industry is booming and that's good for me.

Also i'm thinking about incorporating my third company ( a real managed company) in Romania because taxes are low and the tech talent are there.

I just wanna be away from southern Europe. I tried to live there, believe me ( I was born there lol), but their bureaucratic hell is a fucking mess and and our governments behave like the most entitled peace of s**t and our leaders forget what we stand for, but I think this was a thing from the past.

Asia is just something else man - their whole attitude is just different towards foreigners, they could survive without any interference from the west. And Singapore, this beautiful Gym, besides my bank accounts there, I bought lots - I MEAN LOTS - of gold there and i just swap my gold with fiat back and forth and sometimes use my gold as a collateral and borrow loans against it and all this are being done smoothly without snarky assholes asking me questions that are extremely invasive for no fucking reason.

and eastern Europe is beautiful, they wanna do business and they want to succeed and get their name out there.
Look at Georgia, extremely easy to do business and open a bank account. Estonia have that + a booming tech industry and great networking which exactly what I need besides my usual hobbies that are there too.

 

[MiddleEuroAsia]

As far as I know, Estonia always considers you tax resident once you’re resident, and taxes your worldwide income. But tax residency can be shifted to another country under a tax treaty, as long as your center of life is there and not in Estonia or wherever you’re living. A good lawyer should be able to help with that. If you go down that route, it should be possible in pretty much any country, including Switzerland, as long as there is a tax treaty with the UAE/Malaysia. But I guess a certain risk will always remain, you’d always have to prove that your center of life is not in Europe.

@JustAnotherNomad Yeah the problem with that Is, i don't travel around the world all the year the way I used to do in the past. I like to have bases for my operations in every continent. So Malaysia for Asia, Dubai for middle east and now Estonia for Europe (maybe Colombia/mexico/Uruguay/panama as a base for south america in the future?).

In terms of Europe, what I mean as a base is that i will rent a property in Estonia (maybe buy If i like it?) So I will pay bills, I will go to the gym, do my usual outdoor activities and just live a "normal" life the way I live in my other bases. That's just what I want to do in this chapter in my life.

So, It will be hard to prove that my center of life is not in Estonia, but maybe I could prove that i live in one of my other bases (malaysia/dubai) longer than in Estonia! So, maybe that will work?. I will have to check with a lawyer/tax consultant to see if this will work. i'm not in a hurry anyway, I just like to explore my options.

Why not Russia? Russia doesn’t consider you tax resident, unless you spend 183+ days in the country, no matter how close your ties to the country are otherwise. I’ve heard they are considering lowering this to 90 days, but that’s still plenty. Should be really low risk from a tax perspective. It just wouldn’t give you a Schengen visa, if that’s relevant.

Russia is not an option now as my investors won't like it If i lived there, even if my companies is incorporated elsewhere. Also the relationship between Russia and the rest of the world is on a thin Ice and I don't want to take risks in the time being.
So, Russia is not an option for nowI and I won't have a need for a Schengen visa as I have a European passport.

Lithuania has more vague rules, but I guess it should still be fine. There may be other countries in Eastern Europe with similar rules. Slovenia maybe? I haven’t checked.
Maybe Ireland as a non-domiciled resident?

Lithuania seems nice, I haven't checked it yet! what are their tax rates ? Is it similar to Estonia? Did you travel there before?

I've visited Slovenia before and It's a nice country with great people. But I couldn't see myself living there unfortunately!

I heard Ireland mentioned before? What is it their non-dom status? is It similar to the UK one? I will have to look into it.

anyway thanks for the great tips, I highly appreciate it!

 

[JustAnotherNomad]

So, It will be hard to prove that my center of life is not in Estonia, but maybe I could prove that i live in one of my other bases (malaysia/dubai) longer than in Estonia! So, maybe that will work?. I will have to check with a lawyer/tax consultant to see if this will work. i'm not in a hurry anyway, I just like to explore my options.

It would all depend on the tax treaty, I guess. Definitely talk to an accountant. I guess it can work if you can demonstrate that you don’t work in Estonia. Otherwise the best you can hope for would probably be that you only pay tax in Estonia for the days you spend there.

Lithuania seems nice, I haven't checked it yet! what are their tax rates ? Is it similar to Estonia? Did you travel there before?

Nope, haven’t been there. I believe their corporate tax rate is 5% up to EUR 300k in revenue, 15% otherwise. Personal tax rates should also be 15-20% if I’m not mistaken. I’ve heard that digitalization is similar to Estonia.

I heard Ireland mentioned before? What is it their non-dom status? is It similar to the UK one? I will have to look into it.

It should be similar, but I haven’t checked the details.

Let us know what you find out, please!

 

[MiddleEuroAsia]

@JustAnotherNomad
UPDATE:

I've sent an Email to kpmg, and they got back to me with awesome news.

First of all, they referred me to the estonian DTT page and as you can see, UAE and Hong Kong are on this page.

and they told me that there are more than one way to not pay any taxes in Estonia and live there as a regular resident not e-resident.

they told me that the best one for my case is to use the Double tax treaty that exist in UAE and Hong kong for my advantage.

for example:

I have real company with a real substance In UAE and have an office and everything, not only that but also I OWN a house there and pay bills and stuff. Compare that to Estonia where I have no company and the only thing I have there is I rent the house that I live in for the period that i live there. So, I would say that my center of life is is UAE not in Estonia, plus I won't live in Estonia more than 3 or 4 months anyway, so KPMG said that it's an easy case for me.

And for my Hong Kong company, I told KPMG that i don't live there BUT i have a real substance there. So they told me that i will be able to use the DTT between Hong Kong and Estonia and as long as I don't have any Estonian customers I won't pay any taxes to the Estonian taxes and customs board.

So as you can see, I can now have a base in Europe without paying any taxes there. So, this is a major win for me.

Cheers

 

[JustAnotherNomad]

Great news! How much did you pay for this advice from KPMG?

 

[lavel]

what do you figured out?

@Admin is this to be moved to general business talk?

 

[Jade33]

@JustAnotherNomad
UPDATE:

I've sent an Email to kpmg, and they got back to me with awesome news.

First of all, they referred me to the estonian DTT page and as you can see, UAE and Hong Kong are on this page.

and they told me that there are more than one way to not pay any taxes in Estonia and live there as a regular resident not e-resident.

they told me that the best one for my case is to use the Double tax treaty that exist in UAE and Hong kong for my advantage.

for example:

I have real company with a real substance In UAE and have an office and everything, not only that but also I OWN a house there and pay bills and stuff. Compare that to Estonia where I have no company and the only thing I have there is I rent the house that I live in for the period that i live there. So, I would say that my center of life is is UAE not in Estonia, plus I won't live in Estonia more than 3 or 4 months anyway, so KPMG said that it's an easy case for me.

And for my Hong Kong company, I told KPMG that i don't live there BUT i have a real substance there. So they told me that i will be able to use the DTT between Hong Kong and Estonia and as long as I don't have any Estonian customers I won't pay any taxes to the Estonian taxes and customs board.

So as you can see, I can now have a base in Europe without paying any taxes there. So, this is a major win for me.

Cheers

thats great in theory, hopefully in the field you have the same luck