€1M+/year dropshipping - FRench resident - Offshore setup ?

[xxx123]

Hi guys,

As written in title, i'm a French resident, doing dropshipping.

For the short story, I've started in december 2018 with 250€ cashflow.
It took me few monthes to learn the job, constitute a treasury, and now i'm doing 50k+/month, with one website, and selling in one country only.

Since I'm working on a second website, and doing translation of the first one, my goal for 2020 (which I think will be reached) is to make at least 100k/month, maybe more. So we are hoping to make 1M+ revenue in 2020.



As you surely know, companies structures in France are very Tax Heavy, reason why i'm thinking about creating some kind of offshore structure.


My first idea was the following :

Open an LLC in Wyoming and create (in my name) a French company which will inovoice the US company, for freelances missions, with an established contract saying that I'm managing the website, advertising, etc...

This way, I keep some kind of legal arrangement, which will allow me to justify, in case of tax audit of my lifestyle, incomes, etc... Also, i'd like to buy a house in the future, and keep my social benefits (social security, pension contributions, etc.).



What do you guys think of this setup?

Can you confirm me that US will not communicate my name to France as the LLC holder?
I know they did not sign CRS, but what about FATCA? From what i understood it only concern US citizen, am I right ?


If you have any advice on other kind of setup, i'd be glad to hear from you !

Thank you for taking the time to read me

Regards,
xxx123

 

[wisdom]

if the llc will be under your name i'm sure usa will report your name to the french tax authorities under the fatca compliance

 

[Fly$]

Also agree Uncle sam's friends will report your name as soon as they can

 

[xxx123]

Aint LLC in states such as Wyoming, Delaware, etc... anonymous? What kind of setup would you recommend?

 

[andres33]

USA is not a solution. There are better solutions not so far

 

[xxx123]

Andres33 : which ones?
I saw your message on my profile, but i cant contact you in PM

 

[andres33]

Andres33 : which ones?
I saw your message on my profile, but i cant contact you in PM

Cyprus residence + Georgia company is better option

 

[fshore]

Fatca reports bank account balances if the account has earned more than $10 yearly in interest. Non interest earning accounts are not reported.
If you file the required 5472 form the irs might report some data to France.

 

[John Andrews]

move out of france mate

if you have a 1 mil+ business you can probably afford it...

 

[andres33]

Cyprus easy non-dom residence is easy to get. With this residence you have good privileges througt differents companies in some jurisdiccions. But the firts step is to get a good tax residence. And for now the easiest for european people is Cyprus

 

[Martin Everson]

It took me few monthes to learn the job, constitute a treasury, and now i'm doing 50k+/month, with one website, and selling in one country only.

If your doing 50k revenue a month and making decent profit currently and your still living in France or using a French company behind the website then you don't need financial advice you need a good psychiatrist...lol .

Get the hell out of France like every other French person with money has done. Don't carry the tax burden for the elite who have already left the sinking ship...lol.

https://www.dailymail.co.uk/news/ar...x-forces-12-000-millionaires-YEAR-France.html
France has Exit Taxation also so once you start doing bigger numbers you will be taxed on totally assets if you then try and leave France....lol. Thats why the rich left ahead of time....lol. Read the full rules in below link.

https://www.impots.gouv.fr/portail/...ns/i-am-leaving-france-do-i-have-pay-exit-tax
--- start quote

If you transfer your residence for tax purposes outside France, you are, under certain conditions, liable for income tax and social levies connected with unrealised capital gains, receivables originating from an earn-out clause, and capital gains realised on the disposal or exchange of securities subject to tax deferral.

This affects your situation if you have been a resident of France for tax purposes for at least six years out of the previous ten prior to the transfer of your residence abroad and if you own stocks or shares whose value is equal to or greater than €800,000 or represents at least 50% of a company's corporate profits.

You are nevertheless entitled to a stay of payment or tax relief in certain circumstances.

As regards transfers of residence for tax purposes outside France as from 1 January 2019, a number of arrangements have been added to this scheme, without retrospective effect for taxpayers having transferred their tax residence prior to this date (Article 112 of the 2019 Budget Act).

---- end quote

 

[romashkavarashka]

if you have a 1 mil+ business you can probably afford it...

or maybe not .....

 

[xxx123]

Hi guys, and thanks for your answers.

Of course, moving out of France is another option i'm thinking about. Had a meeting with a lawyer 2 days ago about it.

I was thinking about Malta or Panama, also with an LLC company (or other?). What do you guys think about those countries ?

 

[Martin Everson]

I was thinking about Malta or Panama, also with an LLC company (or other?). What do you guys think about those countries ?

For Panama once you go there opening accounts in Europe or elsewhere will become a nightmare. Do your home work and find out beforehand banks and EMI's that will accept Panama residency before considering it. You can start by checking if Panama residency is accepted with your existing banks and EMI's etc.

 

[andres33]

Everson is totaly right. Panama residence and panama companies are bad to work in others countries. And cost for resdicence is arround 5000 + 2 or 3 travel.
Malta don't resolve the problem. In first instance in Malta you can't work with a company without substance. In Malta you will have CFC rules. So imposible to operate company like LLC or IBC. In Malta you pay for all the money that you will enter in the country over 8000€. By transfer, cash or by payment cards. Also you will pay if you have capital gains over 35000€. And like that many problems. And finaly to get a tax certificate you will need to proove really that your are living more than 183 in the island, and you will need to prove that you live center is in Malta. Is very dificult to get this certificate in Malta. The banks are very complicates and they will control you all your movements. You will need to justifie all banks movements
Cyprus is other world. Very easy for all. Possible to get all the documents in less that 1 week. No CFC rules. To get the tax certificate you need to spend only 60 days in the year. Not necessary in one time. You can do it in some travels. A company pay only 12,5% tax and with a good accountant you can deduct almost 70% of the 12,5% in justified expenses. The are only 2 taxman in the island. With adecuate structure with diferents companies you can get 0% tax.
To finish. Avoid lawyers in France that don't know perfectly the system. Try to inform yourself about the new european law named DAC6. With this law all the tax advicers in EU like Lawyers, gestionaires, notaries, etc.., must to comunicate to the tax authorities all the people who want or are checking for a tax optimisation. The notaries are doing this more than 1 year and nobody know that. But now many countries are appliying this DAC6. In 2020 all EU will do it. So take care with lawyers

 

[GrumpyMess]

No CFC rules

CFC rules are the same in Cyprus and Malta.

With adecuate structure with diferents companies you can get 0% tax.

What structure are you talking about? the only adecuate structure is 12,5% tax, all others are in the grey area and can result to fines.

 

[andres33]

CFC rules are the same in Cyprus and Malta.

.

In Cyprus no CFC rules for invidividuals. Only for companies. Try to inform you

CFC rules are the same in Cyprus and Malta.


What structure are you talking about? the only adecuate structure is 12,5% tax, all others are in the grey area and can result to fines.

I reffer a structures combined with others companies in others countries. And no black o grey listed countries. The non dom residence in Cyprus + Cyprus company + other structure in Georgia for exemple, can be very interesting. But not only Georgia; there are other jurisdiccions with interest if you know to combine all. Finallly the UBO will be a Cyprus resident and this has very good advantage.

 

[GrumpyMess]

In Cyprus no CFC rules for invidividuals. Only for companies. Try to inform you

A tax resident company is a company whose management and control is exercised in Cyprus. There is no need for cfc law since any company whose management and control is exercised in Cyprus is a Cyprus resident company. There are no exceptions for doms or non doms, thus it's a grey area.

I reffer a structures combined with others companies in others countries. And no black o grey listed countries. The non dom residence in Cyprus + Cyprus company + other structure in Georgia for exemple, can be very interesting. But not only Georgia; there are other jurisdiccions with interest if you know to combine all. Finallly the UBO will be a Cyprus resident and this has very good advantage.

It sounds like reflections and not like a proper structure.

 

[Mark Rucken]

I would go with a resident Cyprus company. Pay 12.5% profit tax and you are good. Easy as that. I am sure that is less than what you are currently paying in France. With a clean business, healthy turnover and resident CY company you can get an account in a reputable bank in Cyprus, just hire a good introducer that has a contract with the bank.

 

[andres33]

A tax resident company is a company whose management and control is exercised in Cyprus. There is no need for cfc law since any company whose management and control is exercised in Cyprus is a Cyprus resident company. There are no exceptions for doms or non doms, thus it's a grey area.


It sounds like reflections and not like a proper structure.

try to inform you better

https://ec.europa.eu/taxation_customs/tax-common-eu-list_en
https://ec.europa.eu/taxation_customs/sites/taxation/files/eu_list_update_12_03_2019_en.pdf
When I talk about non cfc rules for individuals I refer to the possibility to get to manage a company in other country without substance and this company will be part a struture of a cyprus company. But perhaps this is a little to complicate for you.
Try to informe you better. I was maltese resident and now I live in Cyprus. I know what I talk. I have 2 well structured business in no black or grey listed countries and I pay only 1,75%. annual tax.
If you get to find a good advicer to inform you, provably you will get understand how to proceed