Is it better to setup an offshore company for freelancer?

[senty]

Hi, I am a young freelancer (programmer) and permanent tourist/digital nomad for the past 2 years. Now my income has been rising and I'll clearly need to declare it/pay taxes and I wanted to ask for your advice about the optimum way. There are lots of opinions online but I couldn't figure out how to achieve the best deal.

I am both UK citizen & Cyprus citizen & North Cyprus citizen. I am living in the EU as a tourist (without becoming tax-resident anywhere). However, my clients are from US mainly.

For the past week, I have been researching the options; and apparently there are 2 options - self-employed or LTD or offshore LTD. These are all new to me so if I have any misunderstandings, please please correct me.

My findings are:
- For the UK, if I opt in as self-employed, £0-30k is liable to 20% tax - and first £11.500 is allowance. I am not sure if foreign-earned money is tax-free.
- For Cyprus self-employed, apparently first €19.5k is %0 tax. And it is said that "income from employment outside Cyprus is not taxable" - on Europa

- If I decide to create a UK limited company (one director/owner), the corporate tax comes in - which is 19% - (and as far as I understand I will be the employee of the limited company at the same time). I read about one tactic which is having a salary to the director of £11.500/yr and also there is £5000 tax allowance for dividends - which makes £16,500 tax free.

- Also there is a offshore company option in North Cyprus free-zone - which is %0 corporate tax for foreign-earned money but I'll still need to pay my income tax somewhere.

I doubt combining North Cyprus LTD & Cyprus for income tax may be an issue because Cyprus doesn't recognize North Cyprus, have no clue.

I'd be grateful for any inputs. What would you do if you were in my shoes?

 

[Uillians]

I have company in HK and I use a debit card from the company account.
Some sales I receive with PayPal from a personal account and I transfer to a personal bank account, and make a personal income tax return in my country, with low value to enter the government subsidy.

 

[senty]

I have company in HK and I use a debit card from the company account.
Some sales I receive with PayPal from a personal account and I transfer to a personal bank account, and make a personal income tax return in my country, with low value to enter the government subsidy.

So at the same time, you are also registered as self-employed in a different country than HK?

 

[negon]

Where are you tax liable if you don't live anywhere more than 183 days within the EU ?

 

[senty]

Where are you tax liable if you don't live anywhere more than 183 days within the EU ?

That is my question - I think for now nowhere. I haven't been earning much so I didn't declare it before. I am concerned about it now so it won't cause bigger problem in the future because I started earning good amounts just recently ($15-25k).

My question is - where should I do it? should I do it via offshore ltd or self-employed? What is the most optimum way so that I can save some on taxes? What would you do if you were me?

 

[Uillians]

That is my question - I think for now nowhere. I haven't been earning much so I didn't declare it before. I am concerned about it now so it won't cause bigger problem in the future because I started earning good amounts just recently ($15-25k).

My question is - where should I do it? should I do it via offshore ltd or self-employed? What is the most optimum way so that I can save some on taxes? What would you do if you were me?

The ease of you not wanting to pay taxes correctly and very simply, here in Brazil
Most of it gets by the offshore company and a small part by the personal account.

 

[negon]

That is my question - I think for now nowhere. I haven't been earning much so I didn't declare it before. I am concerned about it now so it won't cause bigger problem in the future because I started earning good amounts just recently ($15-25k).

My question is - where should I do it? should I do it via offshore ltd or self-employed? What is the most optimum way so that I can save some on taxes? What would you do if you were me?

Tell me do you live anywhere more than 183 days at a time? If not you don't have to pay tax but considered a nomade!

 

[senty]

Tell me do you live anywhere more than 183 days at a time? If not you don't have to pay tax but considered a nomade!

I lived in Spain (for around 200 days~) however I believe as a tourist - without using any health-service or applying to tax number - I rented a house just like airbnb and they didn't ask for my tax ID and stuff.

However, I have left 2 months ago and now in Greece as a tourist. I am not sure if I will settle here either for more than 183 days.

My freelance money is going into my personal bank account in the UK (or from Paypal/Transferwise to my UK bank). I am pretty confused if they will freeze my UK bank account, in fact I didn't live there for the past 4 years (just barely visited for 1 month maximum in the 4 year span).

 

[senty]

Bump.

I did more readings on the forum; however the more I read, the more confused I get.

Is a Cyprus LTD better for a freelance (software) business? or a Northern Cyprus (Free-zone) LTD and creating a bank account in Bank of Cyprus/UK (as far as I understand, you can setup a bank account in a different country) is better ?

 

[Rprox]

Hi, I am a young freelancer (programmer) and permanent tourist/digital nomad for the past 2 years. Now my income has been rising and I'll clearly need to declare it/pay taxes and I wanted to ask for your advice about the optimum way. There are lots of opinions online but I couldn't figure out how to achieve the best deal.

I am both UK citizen & Cyprus citizen & North Cyprus citizen. I am living in the EU as a tourist (without becoming tax-resident anywhere). However, my clients are from US mainly.

For the past week, I have been researching the options; and apparently there are 2 options - self-employed or LTD or offshore LTD. These are all new to me so if I have any misunderstandings, please please correct me.

My findings are:
- For the UK, if I opt in as self-employed, £0-30k is liable to 20% tax - and first £11.500 is allowance. I am not sure if foreign-earned money is tax-free.
- For Cyprus self-employed, apparently first €19.5k is %0 tax. And it is said that "income from employment outside Cyprus is not taxable" - on Europa

- If I decide to create a UK limited company (one director/owner), the corporate tax comes in - which is 19% - (and as far as I understand I will be the employee of the limited company at the same time). I read about one tactic which is having a salary to the director of £11.500/yr and also there is £5000 tax allowance for dividends - which makes £16,500 tax free.

- Also there is a offshore company option in North Cyprus free-zone - which is %0 corporate tax for foreign-earned money but I'll still need to pay my income tax somewhere.

I doubt combining North Cyprus LTD & Cyprus for income tax may be an issue because Cyprus doesn't recognize North Cyprus, have no clue.

I'd be grateful for any inputs. What would you do if you were in my shoes?

 

[Rprox]

Hi Senty, may I ask you for some advice or anyone on the forum. I will highly appreciate it if you can direct me, Its regarding offshore work, I have been researching this for months now but nothing has transpired out of my persistence.

 

[CyprusLaw]

Hi Senty, may I ask you for some advice or anyone on the forum. I will highly appreciate it if you can direct me, Its regarding offshore work, I have been researching this for months now but nothing has transpired out of my persistence.

Hi Rprox, what is you question?

 

[Rprox]

Hi Senty, may I ask you for some advice or anyone on the forum. I will highly appreciate it if you can direct me, Its regarding offshore work, I have been researching this for months now but nothing has transpired out of my persistence.

Hi Rprox, what is you question?

I posted this before posting a thread but my question relates to finding offshore work as a skilled IT professional and which portals are recommended? as a lot of my applications over the past few months were rejected by US, UK and Canadian based companies even though I fit the job criteria. I am not a resident in any of the aforementioned countries. This may seem like a spoon feeding request but I honestly never had a clue that I need to establish an offshore company first.

 

[Rprox]

Hi @Rprox
If i read well, you might need to incorporate a company thru which you will provide such consultancy services. A company which is allowed to conduct international business. there are several jurisdictions which offer such vehicles along with a bank account. you can consider jurisdictions such as Mauritius or Seychelles.

Thank you @offshoresetups, I highly appreciate the replies. I will look into those juristictions and will read up more about the tax components too. I noticed the packages includes all those vehicles, I understand that I may still be taxed in my resident country so local tax might be something I am unable to avoid as I am alreeady paying tax as a perm employee. Hopefully able to relocate when all this works out well.

 

[Rprox]

Thank you @offshoresetups, I highly appreciate the replies. I will look into those juristictions and will read up more about the tax components too. I noticed the packages includes all those vehicles, I understand that I may still be taxed in my resident country so local tax might be something I am unable to avoid as I am alreeady paying tax as a perm employee. Hopefully able to relocate when all this works out well.

Hi @offshorsetups, "Jurisdictions suh as Maritius and Seychelles" - I am reading up some rules and write-ups around some set-ups, if I had a company in any of the above jurisdictions, would I still be able to conduct business for a client in the UK per say?, or would this mean that I need to have an company setup in the UK? also some of these UK-based companies will offer work inside IR35 and outside IR35 and would I still be able to offer my work to the UK companies..