Low tax, low cost with good freedom setup: Romania vs Bulgaria is the final match?

[halaba]

5% is final.

Your post is too short. It must contain a minimum of 30 characters and above. your curent characters is 12

 

[gnud]

5% is final.

Your post is too short. It must contain a minimum of 30 characters and above. your curent characters is 12

That's a better deal than Andorra for businesses with high profit margins.

Have an employee there (cheap), establish an economic substance, and no EU country can appropriate the company with CFC rules, you can reside anywhere. No need for residency visa and waiting months for permissions, freedom to move around.
Reside in Malta, pay yourself dividends, never transfer them directly to Malta, and pay ~6% total tax.

Seems too good to be true though. Is this it or am I missing something?

 

[halaba]

You are just missing some bureaucracy obligations that can be annoying to deal with, mostly in the first year.
Several visits to the local tax office to submit some documents for VAT registration etc. (In case your accountant don't want to do that)
And the monthly accounting is also something that not everybody is used to also requirement to print and keep your accounting data.
I would suggest an accountant, but for few invoices smartbill can be enough to do it yourself.
There are several things that will cost you money and time on the way.

And I don't have any idea about your plan with malta, but if you are not resident according to that video you have to pay 16% instead.

 

[Marzio]

Is this it or am I missing something?

Yes, you are missing that if you create a holding company that owns the Romanian company in a country that doesn't have withholding tax on dividends and allows the parent-subsidiary directive, you could be paying 1% total.

 

[gnud]

Yes, you are missing that if you create a holding company that owns the Romanian company in a country that doesn't have withholding tax on dividends and allows the parent-subsidiary directive, you could be paying 1% total.

Holy s**t that's incredible. Thanks for the tip!

 

[gnud]

You are just missing some bureaucracy obligations that can be annoying to deal with, mostly in the first year.
Several visits to the local tax office to submit some documents for VAT registration etc. (In case your accountant don't want to do that)
And the monthly accounting is also something that not everybody is used to also requirement to print and keep your accounting data.
I would suggest an accountant, but for few invoices smartbill can be enough to do it yourself.
There are several things that will cost you money and time on the way.

And I don't have any idea about your plan with malta, but if you are not resident according to that video you have to pay 16% instead.

That's no big deal for me. If the costs are fixed and not a percentage of profit, I'm fine with that. Thanks for your info.

I wanted Malta to cash out dividends periodically (non-dom regime will grant me 0% capital gains tax). If it's the 16% withholding I'll have to accumulate and move to Romania after a few years to cash out to get 5% only. Not as convenient but better than giving up 50% where I live right now.

 

[1nomad]

"Note: we had a small error of explanation in our video, taxes on dividends for both expats and locals are 5%, in most cases"

 

[sujoe]

A micro company in Romania has several limitations, one of them is that no more than 20% of revenue can come from consulting, and the company can't operate in capital markets. So the structure is only good if you're selling products.

I think this requirement is removed few years ago. It is not the case anymore

 

[Maolaoadviser]

It seems to me as well, but some people still prefer Bulgaria (i've also many friends which have chosen to setup the company and their fiscal residency in Sofia, Bansko or Plovdiv and I'm trying to understand why).

Also Bulgaria (except Sofia) seems to have less good flights connections than other cities in Romania, like Timisoara, Bacau, Iasi and Cluj.

I heard good stuff about Brasov, but since there isn't an airport and it's far away from the border too, i would choose probably Timisoara.

Edit the flights connection with Timisoara are very good with italy, but quite limited with other countries.

Hi, do you know anything about Bulgaria's 183 day stay resident requirement? How can i avoid that and still be considered a resident of Bulgaria for tax purposes

 

[Maolaoadviser]

Hi @halaba ! So are you happy with your choice about Romania?

Do you really live there or you setup your stuff just for tax purposes?

I'm probably gonna do the same move...

May I ask you which city did you choose?

Hi, do you know anything about Bulgaria's 183 day stay resident requirement? How can i avoid that and still be considered a resident of Bulgaria for tax purposes