Good low tax place to live/relocate

[user9823671]

just suddenly became very authoritarian.

Latin American locks downs were quite strict. Curfews, everything shut except food shops / pharmacies. Restrictions on days you can leave the house / drive your car. Police / military roadblocks in and out of all towns / villages and cities. Usually the police are very easy to bribe to go about your business, not so with military. Things were LOCKED.DOWN. Ignoring the conspiracies of Bill Gates world domination, 5g mind control experiments, some other evil cabal taking over the planet, the reason was, these are poor countries without the ability to stop their healthcare systems collapsing. Rich western countries were on the brink of failure, what hope would poor developing countries have. I can quite imagine someone going to the military at the checkpoint "I AM FROM <insert_rich_country> AND I DEMAND MY FREEDOMS" being met with a stern, "turn around or your arrested". For everyone that followed the rules there were no problems.

That all said, it does raise the point, that if things do go wrong, you are not at home, you are not in a developed country where certain freedoms / rights you expect exist. As the saying goes "you're not in Kansas anymore". Which may be something for OP to consider. Similarly for the Arab countries. Plenty of cases crop up from people breaking the morality laws whether justified or someone trying to cause issues. Of course not all (same as not all in Panama) are effected, but these things do happen enough to be aware of.

 

[dziter]

Thanks for great explanation.

For Portugal, I can give you the contact information of a tax lawyer. I think the typical NHR structure is a combination of companies in Cyprus and Malta. It costs €5-6k per year for the structure and you pay 5% in taxes in Malta, or something like that. But no tax in Portugal at least. If I remember correctly. But it’s limited to 10 years and I guess there is always a risk that Portugal will decide that the structure was not OK to begin with. But at least you would be one of hundreds of people with this structure, so it’s quite well-tested.

To maintain a company in Malta it's around 5k€ yes. The Maltese tax advisor advised me first time with this NHR but it was fast and I didn't ask anything. So yes, I guess it's popular. I read on internet that Portugal was looking into this kind of setup but right now, it's completely legal right?

Yes, I will be really happy if you share with me in PM (I still can't send PM) this contact. I am always wondering what's the net amount in pocket even under simple NHR. Indeed foreign source income is tax free, but social contributions seem high. And it's rare to find good example on internet or feedback. I have feeling Portugal is selling a dream and it's most of the time more oriented for retirees.

You could actually also check out Italy, they have tax discounts for immigrants. I think you only pay 10% in taxes for 10 years or something like that if you move to Southern Italy.

I checked, you are speaking about Inbound Tax Regime I guess. It seems really interested:
https://www.dlapiper.com/it/italy/i...-tax-incentives-for-attracting-human-capital/https://tax-free.today/blog/residence-in-italy/
I would look more for it and especially on social contributions which are hight very often.

OP really needs to visit these places, as no one can really tell him which is best suited to them

Exactly, sure. I am on it.

 

[JustAnotherNomad]

For anything Portugal related, you should really talk to at least one Portuguese tax lawyer. Better yet, talk to several ones to make sure you’re getting solid advice.
For income to be tax free, you officially can’t work from Portugal.

 

[cyprus123]

As you are into IT business you could setup a virtual zone company in georgia (tax exempt) and be resident in Portugal. According to NHR regulations your dividends from Georgia are tax exempt for 10 years. There is a DTA in place between Portugal and Georgia which makes sure that you can enjoy the NHR benefits.
But you need real substance in Georgia which is fairly cheap plus you can easily hire talented IT staff there.

 

[JustAnotherNomad]

Isn’t there a withholding tax on dividends in Georgia?

 

[JustAnotherNomad]

@cyprus123
What would be the cost for the Georgia company, including substance? Do you still need to have proper accounting? What are hourly rates for senior developers like?
Also just for the record, a DTA isn’t sufficient for dividends to be tax exempt in Portugal, there are additional rules. But I guess it should work if you have proper substance in Georgia.
Edit: Seems like I remembered correctly, there is a 5% withholding tax on dividends. So it’s not tax free at all.

 

[dziter]

Hello,

Thank you for your answer.
Georgia could be a good solution if substance I guess yes. Nowadays, clearly it seems to be: Cyprus/Bulgaria/Georgia the most popular in EU or near EU.

Right now, I am giving a closer look to Cyprus and I take a lot of information everywhere (advocate, expats, tax advisors..).
I will go on site to see how it is and will see.
@cyprus123 : Based on your nickname, don't you recommend Cyprus?

I just discover that accounts need to be audited so I will take that in consideration too because the fees increased depending of number of transactions. Between 1k/1.5K€ and few thousands euros /year.

And I just saw that Cyprus has a special tax regime with Intellectual Property. It should be possible to reduce corporate tax from 12.5% to 2.5%, I am wondering if it can works for IT development.

 

[JustAnotherNomad]

@dziter You should really first decide if you want to do everything by the book or be in a grey area.
If you want to do everything by the book, you should really visit the countries first to see if you like the lifestyle, ideally for a couple weeks each. What good is it if the taxes are low if you hate living in Cyprus? There are posts on this forum from people who complain how much they regret moving to Cyprus because the lifestyle and the car-based culture just isn’t for them.

 

[dziter]

@JustAnotherNomad : Thanks for your feedback. I totally agree with you.
To be honest, I want to be as much as possible legal and not too much in grey area.
Being honest, I already see some problems with my current taxation and fight for things which are not my « faults ». So I can’t imagine if I was in grey area.

I totally agree about the car-based culture etc. As I said, I am going in few weeks to see that, definitely. There is no doubt.
First, I was interested about Malta and it seems that Cyprus became more popular. So that’s why. And I didn’t see myself living in a place like Bulgaria or Georgia first and not far from EU. So not a lot of options. That’s why, in my mind it’s still : Cyprus/Portugal (but seems tricky) and Italy the regime you told me seems really good.

I will do some search but if you have topics in mind with people complaining after living in Cyprus here, I am really interested.

Thank you for everything.

 

[JustAnotherNomad]

If you consider Portugal/Italy, I would advise you to talk to tax lawyers from those countries directly and ask for their recommendations.
I would simply go for a model they have experience with, where you’re not the only one using it. It’s just easier when you know hundreds of others are doing the same thing, the local tax lawyers will know how everything works and there is just less risk.
You will still pay some tax, but you can live with a high standard of living and won’t have to worry about the reputation of the country you’re living in. The way we have understood your preferences, I wouldn’t recommend you to go for some untested structure to save a few perfect in taxes. If “everybody” does Italy+Malta, do Italy+Malta, not Italy+Georgia, even if it sounds a bit cheaper.

 

[cyprus123]

@JustAnotherNomad:
The costs in Georgia are relatively low compared to other jurisdictions. You need to do proper accounting though, it can be arranged for around 150 Euros per month.

There is a 5% withholding tax in Georgia, right.

I personally know senior developers in Georgia working for 700 to 900 EUR fix monthly salary, but it always depends on the experience and negotiations. For bigger teams it is better to go to Ukraine, but you will a different environment there.

 

[Traveler]

But you need real substance in Georgia which is fairly cheap plus you can easily hire talented IT staff there.

Having hired several IT staff in Georgia I can say from direct experience that nothing could be further from the truth.

Talent is few and far between, and you can forget about salaries anywhere close to the Georgian averages when talking about senior dev staff. To give you an example, I recently advertised a senior PHP dev position with a great benefits package and very high salary through all of the major job portals, and got a grand total of 6 CVs in the span of a month, of whom 2 were worth interviewing.

Expect to pay salaries comparable to Eastern and Central Europe, to put a lot of effort into the recruitment process and even then, to be dealing with a lack of work ethic. Which isn't to say it's not worth it. It very well can be. But it's certainly not as rosy as some people will lead you to believe.

Whoever says that talent is easy to find and/or affordable here either doesn't have any direct experience or is trying to mislead you, mostly with the intention to sell you services.

 

[cyprus123]

@Traveler: I guess it depends what you compare it with and your personal network as from my experience the best candidates you'll find through contacts not from job ads. As I mentioned for big teams it might not be the right place, but to hire one or a few talented people it is a great place imo.

 

[averagebloke]

surprised not to hear more about Bulgaria and Montenegro on this chat...CT rates below 10%; 5% for dividends in Bulgaria. Great nature in both. I wouldn't worry about language..that's part of the fun, and anyway there are loads of digital nomads in both...I'm trying to work out which is better too.

 

[dziter]

@averagebloke : Montenegro seems under estimated. To be honest, I was thinking about this place for holidays and when I saw the CT rates I was thinking to move out there. On paper, it seems great. But I never went so first it's important to visit of course and to know if it's suitable for yourself.

From what I understood in the forum, the cons are:
- Small possible corruption
- Bureaucracy
- Not english speaking

Did you study/visit a little bit this country or look for incorporation?

 

[cyprus123]

Montenegro is a nice option, in my opinion a bit small to live there permanently and there are withholding taxes on dividends. Apart from that a beautiful place to reside and do business from.

 

[dziter]

@cyprus123 : Just curious about where is a good place for you to live there "permanently"?
(Your nickname and signature is giving some tips but it can be totally different too).

 

[cyprus123]

First it depends on lifestyle in my opinion. Taxation shall be second.

Cyprus, Georgia and Portugal are my favorites in the European region, all of them combining many advantages. Relaxed lifestyle, beautiful property options, acceptable climate at least for the extended summer period and a fair and relaxed tax mindset (and rates).

 

[Dread Pirate Roberts]

I'd suggest Vanuatu. Island in the South Pacific, 80% English-speaking population, tax haven, overall a pretty good choice.

 

[topleaders]

Take a look at Croatia, with a good accountant and structure you'll end up at 10% tax with lots of possible deductions. It's similar to a Czech sole proprietorship as written above.

more info: Administrative aspects of freelancing from Croatia

I'm from Croatia and that's simply impossible lol