Thank you let me check this one also, any idea if they have any PE rules? No need resident agents? 1 director 1 shareholder 100% foreign owned works for them? And can make bank account online for company? And paypal recieving, stripe or other local payment gateways exists company can use?
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Estonia taxing undistributed profits in 2026 where people will go to now?
- Thread starter Nw1
- Start date
Their tax law sounds like waiting to find points to get company to pay tax though for example;
a) dividends paid by a company to its shareholders,
b) deemed dividends,
c) costs comparable to dividends,
d) conditionally distributed profit (payments with the aim of actual profit distribution).
According to the general rule, loans issued to related companies are considered as deemed dividends and are subject to taxation. However, there are certain rules that allow exempting such loans:
a) if the loan is issued by the shareholder to the tax payer, or
b) if the loan is issued to a foreign subsidiary of a company, or
c) if the amount of issued loans does not exceed the amounts of received loans from unrelated persons, or
d) for the loans issued in the taxation year, if at the beginning of the year, the com-pany doesn’t have undistributed profit;
e) loan maturity is up to 12 months.
Has anyone who has a Latvian offshore company got any tax audit from tax authority stating transactions on statement falls to above catergory when claim foreing income waiver? Or are they not really that bad as the tax code sounds and simply approve submitted tax returns without any hassle?
Yes. Foreign applicants can get the right to obtain a short-term residence permit in Georgia through the purchase of the real estate within the country worth over $100,000. Georgian law allows the acquisition of any property approved by the government, except for the agricultural land.
https://international.holdings/en/residency-by-investment/georgia/
Well. If they accept that then fine. I can tell you that most other countries in Europe won't allow unjustified salaries, especially for inactive companies losing money year by year. A business is still defined to be a venture making profit.
That's true but profits are the results of sales and you can't generate sales without invsting in assets and people.
People needs to be paid even if there are no sales.
I agree this situation can't last forever but depending how much cash reserves the company has, it could be enough.
Yes. 1m in one company can drain like that. A bit more to by adding expenses from other businesses into it.
But if you then have 1001 companies in that country and each employs you at 10k as director, they could continue it that you are getting paid 10m in director fees per year, all for inactive companies without income and then simply reclassify those fees as deemed dividends and then you are busted.
Such games are well-known as they have been used excessively to avoid wht on dividends. Also, don't try to drain it with loans to personal accounts, this game is known too.
No. He does not like US LLCs. He prefers real companies, not those transparent ones.
Also, he did not like spending more than the 150 EUR renewal fee and the 80 USD audit fee per year. Hard call. But Latvia or Georgia may fit the bill.
Yes, OP's year has 1001 nights. Proceeds of each night deposited into different company.
That's how he was able to get audits at $80.
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Yup and can use that money for expenses or simply lend out the money to other companies which need the money after having sold/gifting shares to the other company. So the corporates will simply self sustain themselves and grow in value overtime. And one day when decide i need to exit/cash out I can do so through the best jurisdiction
I meant what amount Georgia will consider to be HNWI? So can know how much not to have so will not be considered a resident, not to go and be a resident
Doable but since still not citizen of tax free country and too lazy at present to move and jump through citizenship hoops, not a good idea to take money out plus regulators can use it as a way to slap you with fines too since the above method is a creative loophole and not how they thought their tax code to be used
Decision is to find a place like Estonia where new sales/revenue can be parked into using foreign income tax waiver along with all following requirements met;
| Access to Local Card Processors with Pay-As-You-Go Per Sale Commission Basis |
|---|
| PayPal Receiving Capability if have a plus |
|---|
| Stripe Availability if have a plus |
|---|
| Wise Business Availability if have a plus |
|---|
| No WHT on Undistributed Profits/Retained Earnings |
|---|
| 1 Director, 1 Shareholder (100% Foreign-Owned) |
|---|
| No Quarterly Documents Submissions or Advance Tax Payments |
|---|
| Year-End Submissions Only |
|---|
| No Resident Local Agent Requirement (Might be flexible if cheap and matches nearly all other requirements) |
|---|
| Tax-Free US Client Payments via Foreign Income Waiver |
|---|
| Low Penalties for Document Submission Delays |
|---|
| Low Incorporation and Annual Renewal Costs (<= $100-200) |
|---|
| No Taxes on Undistributed Profits |
|---|
| Can open bank accounts for company completely online |
|---|
The problem there is that lending to controlled parties bears an imminent risk of being reconsidered as hidden distributions. Also, you may have to pay proper interest back to the lending company to avoid the unpaid interest from being considered distributions.
The HNWI think is probably a waste in your case. We have discussed it here:I meant what amount Georgia will consider to be HNWI? So can know how much not to have so will not be considered a resident, not to go and be a resident
https://www.offshorecorptalk.com/th...a-while-living-in-2-european-countries.43158/
You can get some totally fake tax resident certificate with it, which you don't need nor will it help you much. Otherwise, I have not understand what exactly you want to achieve with it. Please explain again in this case.
I guess this will be hard. But again, what number of companies are we talking about. At 1001, there are viable options where you won't spend more than the 1001 * ($200 + $80 for the audit).
Seychelles, Belize, St. Kits or use a service like @MichaelUniq or @AlexPCS or @Creocree all three of them could setup something where you get the services your require but don't have to care much about the rest.
Your budget is 80$ per year per company is that true or are the others producing noise ?Yup and can use that money for expenses or simply lend out the money to other companies which need the money after having sold/gifting shares to the other company. So the corporates will simply self sustain themselves and grow in value overtime. And one day when decide i need to exit/cash out I can do so through the best jurisdiction
I meant what amount Georgia will consider to be HNWI? So can know how much not to have so will not be considered a resident, not to go and be a resident
Doable but since still not citizen of tax free country and too lazy at present to move and jump through citizenship hoops, not a good idea to take money out plus regulators can use it as a way to slap you with fines too since the above method is a creative loophole and not how they thought their tax code to be used
Decision is to find a place like Estonia where new sales/revenue can be parked into using foreign income tax waiver along with all following requirements met;
Access to Local Card Processors with Pay-As-You-Go Per Sale Commission Basis
PayPal Receiving Capability if have a plus
Stripe Availability if have a plus
Wise Business Availability if have a plus
No WHT on Undistributed Profits/Retained Earnings
1 Director, 1 Shareholder (100% Foreign-Owned)
No Quarterly Documents Submissions or Advance Tax Payments
Year-End Submissions Only
No Resident Local Agent Requirement (Might be flexible if cheap and matches nearly all other requirements)
Tax-Free US Client Payments via Foreign Income Waiver
Low Penalties for Document Submission Delays
Low Incorporation and Annual Renewal Costs (<= $100-200)
No Taxes on Undistributed Profits
Can open bank accounts for company completely online
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