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European Nomad IT Contractor - residing in 'naughty' country + tax resident of nowhere - UK LLP -> US LLC setup

#21
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Dont forget 23% VAT in Ireland.

Perhaps an Irish company with a branch office abroad could work better? VAT 0% reverse charge.

You could probably still make it close to 0% tax if you can maintain non tax residence.
 
#22
MementoMori999 said:
Actually, I think I just worked it out

So, we have:
Irish end client
Irish company (mine to create) - functions similar to a payroll/umbrella company
Independent contractor (me) of Irish company, tax resident of nowhere (or a no or low tax jurisdiction)

Then, the process:
  1. Contractor (me) timesheets Irish Payroll company for hours worked
  2. Irish Payroll company invoices Irish end client
  3. Irish end client pays invoice
  4. Irish Payroll company receives payment
  5. Irish Payroll company disperses payment to Independent Contractor (minus 3% service fee - market rate for a payroll service)
  6. Independent contractor (me) responsible for any and all personal income tax liability on this 97%

Irish Payroll company profits are only the 3% service fee - which is taxed at 12.5%


Basically I'll just set myself up something akin to a 1 person Umbrella company. Note - None of the umbrella companies I've spoken to in Ireland will work an overseas employee/contractor, they say it's because their insurance won't cover them. They all want to hire you as an employee and withhold tax, but legally I can't see why they couldn't do this... seems to just be company policy.

Does that sound OK?
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Did you consider the high (25%)withholding tax on dividends from Ireland, unless you can provide a tax residency certificate from a country that has a tax treaty with Ireland?

I'm no expert on Ireland, but it might be problematic paying yourself as an independent contractor when you are the owner and director of the company.

I think a UK Ltd would be the simplest. You can take a tax free salary if you don't live in the UK. Ireland taxes salaries to non resident directors.
 
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#23
Xshore said:
Did you consider the high (25%)withholding tax on dividends from Ireland, unless you can provide a tax residency certificate from a country that has a tax treaty with Ireland?
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No I didn't know this... doesn't sound good. Who does this - is it the bank who withholds the payments?

Xshore said:
I'm no expert on Ireland, but it might be problematic paying yourself as an independent contractor when you are the owner and director of the company.

I think a UK Ltd would be the simplest. You can take a tax free salary if you don't live in the UK. Ireland taxes salaries to non resident directors.
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Yes, that's the weakness here. I'd be creating an umbrella company, be the director of it, and the sole independent contractor also. My understanding is that it's technically legal, but it would raise an eyebrow. At first I thought I could then take on other contractors (and make it a more 'real' payroll umbrella company), but then I thought I could keep hunting around for one that is willing to disperse the full payments to me (no withholding) with a contract saying that I have full tax liability (and pay them an admin fee). The latter is probably easier.

Can a UK Ltd really provide me with a tax free salary (no corporate income tax)? I thought that was only UK LLPs... If so that's well worth investigating

ChatGTP just spat out this...
Non-UK Resident Director Salary: If you, as a director, are not a UK tax resident and perform your duties wholly outside the UK, your salary from the UK Ltd may not be subject to UK income tax.
Click to expand...

I assume this is what you are talking about?

And I can use a Service Office for my UK LTD sole directors and shareholders address?
 
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#24
MementoMori999 said:
No I didn't know this... doesn't sound good. Who does this - is it the bank who withholds the payments?


Yes, that's the weakness here. I'd be creating an umbrella company, be the director of it, and the sole independent contractor also. My understanding is that it's technically legal, but it would raise an eyebrow. At first I thought I could then take on other contractors (and make it a more 'real' payroll umbrella company), but then I thought I could keep hunting around for one that is willing to disperse the full payments to me (no withholding) with a contract saying that I have full tax liability (and pay them an admin fee). The latter is probably easier.

Can a UK Ltd really provide me with a tax free salary (no corporate income tax)? I thought that was only UK LLPs... If so that's well worth investigating

ChatGTP just spat out this...


I assume this is what you are talking about?

And I can use a Service Office for my UK LTD sole directors and shareholders address?
Click to expand...
Your Irish Ltd should withhold the taxes, no the bank doesn't do it.

UK doesn't tax salaries paid to non residents. And this includes directors salaries, but careful about spending any time in the UK then.
The Ltd company still has to pay tax on the company's profit. However the profit might be small after it has paid the salary to you.
 
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#25
MementoMori999 said:
I want to have the best reputation possible, so I was planning to make both the UK and US entities the same name. The business name is not anonymous and easily tied back to me ('I' am the business, e.g. 'Smith Consulting').
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For best reputation ever and not located in the EU you better go for a Swiss AG as an foreigner you will have your great benefits which local Swiss people don't have.
 
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#27
JimBeam said:
Could you list the benefits? Thx.
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Certainly, I can do that. It's quite clear that you can handle a company differently if the company is not in the same country as you are registered in. This applies not only to Switzerland but to all countries. It seems like authorities are more indifferent as long as it's about smaller amounts and seals, as they know that so far, it's almost impossible to get anything out of going after them.

And what specific things this could be, of course, I will not elaborate on here or for that matter in a PM either.
 
#28
I work in IT with US and UE companies, I have a San Vincent and the Grenadines LLC ( 1000$ per year ) + UAE Residency with Remote Work visa ( 1000$ per year ). My LLC uses Wise as the only bank.
No taxes so far and never had any issue with people working with me, as my company is not blacklisted. Torunaround is 150-200k USD. For me it's the easiest possible setup. I Live as a digital nomad between Ibiza - dubai - Milan - other places.
 
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#29
karishi said:
I work in IT with US and UE companies, I have a San Vincent and the Grenadines LLC ( 1000$ per year ) + UAE Residency with Remote Work visa ( 1000$ per year ). My LLC uses Wise as the only bank.
No taxes so far and never had any issue with people working with me, as my company is not blacklisted. Torunaround is 150-200k USD. For me it's the easiest possible setup. I Live as a digital nomad between Ibiza - dubai - Milan - other places.
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exact what I mean. If you don't live in the same country as where your company is registered you don't have to worry as much as if the opposite.
 
#39
karishi said:
I work in IT with US and UE companies, I have a San Vincent and the Grenadines LLC ( 1000$ per year ) + UAE Residency with Remote Work visa ( 1000$ per year ). My LLC uses Wise as the only bank.
No taxes so far and never had any issue with people working with me, as my company is not blacklisted. Torunaround is 150-200k USD. For me it's the easiest possible setup. I Live as a digital nomad between Ibiza - dubai - Milan - other places.
Click to expand...
so this setup is no longer available because Wise doesn't work with San Vincent and the Grenadines? Any other decent EMIs?
Anyway suppose I do a US LLC being resident in UAE, I imagine there are more banking options then. Won't UAE consider this a CFC (Controlled foreign corporation) and there will be a need to declare it and pay 9% profit tax in UAE?
 
#40
Don said:
There are setups with Estonia that can provide a 0% overall tax (e.g., salary paid to non-residents).
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What is some setup like this?

EliasIT said:
Certainly, I can do that. It's quite clear that you can handle a company differently if the company is not in the same country as you are registered in. This applies not only to Switzerland but to all countries. It seems like authorities are more indifferent as long as it's about smaller amounts and seals, as they know that so far, it's almost impossible to get anything out of going after them.
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Tax residence of company in different country will be in country you are registered in so tax will be same. Advantages are more than tax?

karishi said:
UAE Residency with Remote Work visa
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How long do you have to spend in UAE to keep residency?

karishi said:
why?So far I have never had any issue with Wise, my business is 100% legit and they have done a lot of KYC with me and I always passed it. Worst Case Scenario my UAE bank asked me to move my company account to them
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If Wise cancel your account because of SVG what will be your backup?
 
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