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/
Why not?
He could pay himself a non resident salary tax free until cash reserves dry out.
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.
What is your decision to setup a new company OP ? do you replace the Estonia company with US LLC ?
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 hot he was able to get audits at $80.
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