GER + Malta + HK Ltd (Ecom)

[Semma]

Hello

Currently im moving to Malta and im selfemployed in Germany, so I have to close all my accounts bcus I want to live there.

Can I open a HK company (pay income tax there for the company) with a neat account and living on malta paying me a small salary over there so the German law wont hunt me ?

I would use like the credit card of the HK company to buy stuff..

Thanks for your time !

 

[Semma]

Where can I ask to get clarity ? im new to this seems there are many rules..

 

[Suzy Emerald]

note that the Neat account is in HKD currency, not in USD or EUR

 

[Semma]

Yeah I also buy the supply from HK is that bad ?

 

[clemens]

If you move to another country and be a resident there you don't have to pay tax in the country you are moving away from, or what did I miss here?

 

[jackfrost]

The "broad" rules for Germany are like this:

1) you need to move your "point of interest in life" to Malta, the 183+ days rule is just a guideline and not cared about by the Finanzamt as the final "proof". That primarily involes:

- stay in Germany less than 183 days a year
- stay in Germany less than in any other country per year on a per day basis (the night counts, if you are in Germany 2am and leaving 5am the day counts as being in Germany, if you arrive 6am from Malta the day still counts as being in Mata)
- having NO apartment, keys to an apartment, owned property that is not fulltime rented out, room for your own discretion, clothing drawer etc in Germany in general no place that you have access to on your own will and can live in any time you like
- no stake in a Kapitalgesellschaft (everything besides sole tradership, self employment, that is registered in the chamber of commerce like gmbh, ag, etc pp)
- not married to a German living in Germany and especially not having kids with a German living in Germany ( that is game over - you can have kids being unmarried!)
- only visiting Germany on a temporary / leisure basis e.g. to visit family or for medical reasons (especially family visits are explicitly allowed without triggering a point of life conflict)
- cancel all local contracts etc pp although you could keep European things like European wide private health care coverage etc but be prepared for them to argue against that
- ditch German clients (this is something you have to talk about with your lawyer, German clients are fine, working exclusively for one is not etc pp but i am not expert here since i stayed clear of German clients in general)
- don't keep the majority of your money in German bank accounts (most will cancel your bank account anyways as soon as you deregister)
- deregister with city + finanzamt + change passport in Malta (deregistration form from your local city townhall needed)
- fulltime rent an apartment in Malta, don't do funky airbnb contracts etc pp while technically being fully legal the Finanzamt doesn't give a s**t about what is legal or not - they are scum and will use it against you
- proof your life in Malta with regular Instagram, Facebook, whatever posts / pictures and keep all local receipts for groceries, utilities etc pp


If you do that they cannot do s**t and you are fully and legally out of the German income tax system.

Also unless you have a specific requirement to do this funky HK business thing drop that and do the proper Maltese LTD + holding. You will get proper tax ids, certificates etc and can show that you are complying with European tax code, tax your profits at 35%, make full use of the double tax agreements e.g. while working for clients of your Maltese LTD during travel to Germany etc pp.

The Maltese LTD + holding depends on the CFC changes going live in 2019.

 

[jackfrost]

The good thing is if you are below 7 figures they are unlikely to surveil you, really dig that all apart before the statue of limitations anyways (consult a lawyer still - not sure if 5 / 10 years rule applies here). They simply have bigger fish to fry at the moment and will be quite busy for some time. But Germany being Germany and the Finanzamt being the most fucked up IRS organization in the world by far i would still recommend you to follow the rules 150% to be on the safe side as the problem is that there is no explicit law for all of this. They deliberately only put the "point of interest in life" wording in law with no explanation so they can rule any way they want! You only have previous higher court cases that you can use as a guideline and where the above rules i wrote have been more or less established as law to be followed.

 

[Semma]

Hello you two,

thanks for answering !

Im not sure if I like Malta anymore, with that new 2019 Rule it seems like ill have to pay 5000 of that tax - not that nice to start sth new - maybe I have to go to Cyprus or UAE than, I dont care I just want a clean business setup !

Ill def contact a international tax lawyer, are some here that are not that expensive for a quick evaluation ?

 

[jackfrost]

Yes that is not a new 2019 rule that is already in place for 2018.

2019 is a whole other topic - ATAD / CFC is the much bigger issue here.

The 5000 minimum tax is set in stone though anyways.

Cyprus is the same what i have written above. Really move there, follow those rules and you are off the hook.

 

[jackfrost]

Piece of advice: Do not move just for tax reasons especially if you setup a new business and dont know if it will succeed. That might be the wrong route depending on what you have in mind. Everyone that really had to balls to pack and did it will tell you that. You need to have it in you in general / always wanted it.

Also if 5000 a year sounds expensive to you and problematic THIS IS NOT FOR YOU no matter if Cyprus or Malta or anything else. I would say if it does not justify you to spend 10k a year on this and still be like "f**k thats pocket change compared to the benefits" -do n0t do it.

Also do not underestimate things like English as official language in Malta, much better reputation even with all the news around and probably much more compatible with German mindset than greek Cyprus. But that is all subjective of course.

 

[Semma]

Just want clearance, I lived on Malta and Cyprus already for couple of weeks I like both Islands and have friends on both I dont want to make a big mistake to choose the wrong option !

 

[Semma]

My last option would be UAE with a Freetrade zone, I like this country too and wouldnt have any issues to stay there at least 2/3 of the year !

 

[jackfrost]

Couple weeks is not permanently but if you have friends on both that is very important and will help a lot. It seems Malta will not apply CFC rules under 750k profits in which case i would clearly vouch for Malta by far (tested both Islands too, live on Malta, German too). More direct flights to Cyprus though depending on where your family is in Germany. Personally like i have stated in another threads for me importance would be that i travel a lot - no matter if Malta or Cyprus but comes down to your personality and funds.

UAE keep in mind the flights, flight costs and TIME!, setting up shop costs (much higher in total when i checked last year), big problems with EU invoices, banking, VAT etc. Depends on your business. Also keep in mind weather differences although you said you have checked that out.

 

[Semma]

Cyprus needs a double company formation so it would be a Cyprus LTD I have to take care about and a Hong Kong LTD - ill have a talk to my lawyer on friday - seems also it would woukout with a freelancer visa in RAK/RAKEZ and a Hong Kong Limited and maybe a USA LLC later, that seems much more appealing at the moment due to all those changes now Already found some nice places to live there !

Jack thanks for your time it was super easy to understand how you explained it, I was a bit unsure and nervous all the time

 

[jackfrost]

You are welcome. Be careful with US LLCs especially if you travel to the US now and then and/or have US clients.