Georgia (Tbilisi) a good place to move as a company?

[Don]

If the PE is anyways in Cyprus and you regardless will be paying the 12.5% CT then why have an Estonian company and not just a local Cy LTD? Is it just to avoid GESY and extra filing requirements? If I'm not mistaken the 2.65% GESY is capped anyways.

I understand the benefit of a multi jurisdiction structure. Do you have any recommended lawyers that can set up this 2 jurisdiction structure? Please pm.

Yes happy to help. Im involved in legal services with offices in both Cyprus and Estonia.

Please clarify this too: If i have an Estonian company with a Bulgarian branch, the effective tax is 10%. Bulgaria also has a 5% dividend tax however if the Bulgarian company sends the profits to the Estonian company. the Est company can redistribute this to shareholders tax-free? So I would in essence avoid the 5% dividend tax?

yes, exactly.

Also, Capital gains from trade in listed securities (shares, tradable rights) on regulated markets in the EU and equivalent markets specified in the legislation are not subject to taxation. For that to be true, would I need to set up the brokerage account with the Estonian entity or the Bulgarian branch?

yes, e.g., for Interactive Brokers that means just creating a subaccount for the PE (branch) in different jurisdiction

 

[Marshal]

I see lots of different countries that might or might not be good.

• Bulgaria
• Cyprus
• Georgia
• UAE
• Romania
• and more

Among those countries I would choose Bulgaria. Sofia would be your best bet if you take into consideration taxes, living expenses, location, food, healthcare etc. It's certainly not perfect, but there is no perfect place really.

 

[JimBeam]

Among those countries I would choose Bulgaria. Sofia would be your best bet if you take into consideration taxes, living expenses, location, food, healthcare etc. It's certainly not perfect, but there is no perfect place really.

I would also pick Bulgaria.

Reasons why I would discard other countries:
- UAE to expensive for you (setup ~10k, travel, hotels... it just adds up)
- Cyprus - to expensive for 50k/year profits (only accounting and audit can cost you 3-5k/year or even more)
- Romania - they change rules often so not worth the risk
- Georgia - looks nice on paper but seems distant and too close to Russia

In Bulgaria things seem simple 10% CIT, 5% divs, part of EU, everything there is still cheap (or cheaper compared to rest of EU), you pay your taxes there and you're good to go.
You can always access Turkey and Greece for some sun and sea and Romania for some trips in the nature.

Also, don't try to complicate things with two companies (with Estonia).
It's just not worth the hustle.

 

[Funal]

Thanks everyone for the answers. Especially @Marshal and @JimBeam
I reconsidered everything and Bulgaria might be the better option. In the EU, closer market, stability and good cost of living.
As for a two company sheme: Im not someone who wants to pay zero tax. 10-15% is totally fine.

Will collect more information to compare between Georgia and Bulgaria. If anyone wants to share their experience of those two, its very welcome

 

[blancmon229]

I would also pick Bulgaria.

Reasons why I would discard other countries:
- UAE to expensive for you (setup ~10k, travel, hotels... it just adds up)
- Cyprus - to expensive for 50k/year profits (only accounting and audit can cost you 3-5k/year or even more)
- Romania - they change rules often so not worth the risk
- Georgia - looks nice on paper but seems distant and too close to Russia

In Bulgaria things seem simple 10% CIT, 5% divs, part of EU, everything there is still cheap (or cheaper compared to rest of EU), you pay your taxes there and you're good to go.
You can always access Turkey and Greece for some sun and sea and Romania for some trips in the nature.

Also, don't try to complicate things with two companies (with Estonia).
It's just not worth the hustle.

Bulgaria is my favorite and it is cost effective and simple to set up. The only thing I'll add is if you become a tax resident there and start making more than 400,000 euros in profit , you'll most probably be put on a watch list by the mafia as Bulgaria is still highly run by the mafia and corrupt. Although, the corrupt part I don't really mind as it is extremely efficient.

Doesn't always happen, but if you start making a lot and living fancy just keep that in mind.

 

[backpacker]

- Georgia - looks nice on paper but seems distant and too close to Russia

Georgia was a good place until a few years ago. Latest with the start of the RU/UA war and the influx of RU draft dodgers it has become all but comfortable.
If you do not have any personal connection to the country, stay away.
There are much better and easier options out there.

In a similar note, Armenia has no tax on capital gains for tax residents.

Careful, taxes are applicable!
It has already been discussed years ago -> Question - Armenia - weird CGT
As weird as it sounds, it's true.

 

[JimBeam]

Bulgaria is my favorite and it is cost effective and simple to set up. The only thing I'll add is if you become a tax resident there and start making more than 400,000 euros in profit , you'll most probably be put on a watch list by the mafia as Bulgaria is still highly run by the mafia and corrupt. Although, the corrupt part I don't really mind as it is extremely efficient.

Doesn't always happen, but if you start making a lot and living fancy just keep that in mind.

Just stay under the radar and you'll be fine (so no fancy cars, no Rolex watches, no designer clothes) and nobody will notice you and you'll be fine.

 

[yngmind]

Thanks everyone for the answers. Especially @Marshal and @JimBeam
I reconsidered everything and Bulgaria might be the better option. In the EU, closer market, stability and good cost of living.
As for a two company sheme: Im not someone who wants to pay zero tax. 10-15% is totally fine.

Will collect more information to compare between Georgia and Bulgaria. If anyone wants to share their experience of those two, its very welcome

Thanks everyone for the answers. Especially @Marshal and @JimBeam
I reconsidered everything and Bulgaria might be the better option. In the EU, closer market, stability and good cost of living.
As for a two company sheme: Im not someone who wants to pay zero tax. 10-15% is totally fine.

Will collect more information to compare between Georgia and Bulgaria. If anyone wants to share their experience of those two, its very welcome

In the case of Bulgaria, it will be 10% CIT, and 10% PIT

 

[Dandyline]

In the case of Bulgaria, it will be 10% CIT, and 10% PIT

10% CIT OR 10% PIT

 

[Don]

10% CIT OR 10% PIT

+5% WHT (dividends)

 

[Dandyline]

+5% WHT (dividends)

I assume it's either only 10% PIT if you pay a salary or 10% CIT + 5% WHT if you choose to do profit and send dividend.

 

[JimBeam]

I guess is that if you're employed by your company you have to pay yourself a minimal salary (currently at 780 BGN - around 310 EUR) and on top of that you would pay all the contributions (tax, pension etc) and that totals 927 BGN (about 475 eur/month).

So this averages at about 6k EUR/year and for that money you get pension and basic (state owned) health insurance.
Beyond that you can take everything else as dividends at 5%.

 

[blancmon229]

I guess is that if you're employed by your company you have to pay yourself a minimal salary (currently at 780 BGN - around 310 EUR) and on top of that you would pay all the contributions (tax, pension etc) and that totals 927 BGN (about 475 eur/month).
View attachment 5335

So this averages at about 6k EUR/year and for that money you get pension and basic (state owned) health insurance.
Beyond that you can take everything else as dividends at 5%.

Thanks for that. So effectively you can highly reduce taxes in Bulgaria by just taking minimal salary+dividends. Of if you would c ombine that with a Cyp non-dom and your PE is in Cyp, possibly you can avoid the 5% dividend tax completely and just pay 10% corporate tax in BG. Plus , you can take up to 2.5% deductions in BG so total tax rate would be around 7.5%.

I heard that Bulgaria is expecting to switch from the BGN to EUR as the local currency. In that case what would happen to those with BGN? Will Bulgaria just have 2 currencies, or will people with BGN need to exchange the BGN to EUR at the central bank in Sofia?

 

[JimBeam]

Croatia did this recently (switched to euro) and they had 3 months period where you could easily convert remaining funds into EUR.
They can do it even after but in these 3 months the prices of goods and services could be paid in both currencies.

Bulgaria should switch to euro on Jan 1st 2025.
One thig is certain: switching to euro leads to initial increase in the consumer prices so factor that in.
Once they switch the things will get a bit more expensive there.

 

[blancmon229]

Croatia did this recently (switched to euro) and they had 3 months period where you could easily convert remaining funds into EUR.
They can do it even after but in these 3 months the prices of goods and services could be paid in both currencies.

Bulgaria should switch to euro on Jan 1st 2025.
One thig is certain: switching to euro leads to initial increase in the consumer prices so factor that in.
Once they switch the things will get a bit more expensive there.

Interesting, thanks. Will Bulgarian banks allow you to deposit both currencies? What happened in that regard in Croatia?

 

[JimBeam]

Interesting, thanks. Will Bulgarian banks allow you to deposit both currencies? What happened in that regard in Croatia?

Yes, they'll allow use of both currencies for 3 months and after that they'll migrate fully to EUR.
I was in Croatia recently and all prices are now in Euros (but you can see them also displayed in HKR as well but now only EUR is accepted).
Croatia adopted euro on Jan 1st 2023.