Most tax efficient residence in EU: Bulgaria, Romania, Cyprus?

[Dandyline]

For the 5% tax rate on Madeira, the requirement is a 75,000 investment in Madeira, and employing one Madeira resident (which could be yourself, if you become a Madeira resident).

It's only until December 31, 2028, and it only concerns CIT. The most important things are withholding tax on dividends, income tax rate and social contribution rates.

 

[Ade]

It's only until December 31, 2028, and it only concerns CIT. The most important things are withholding tax on dividends, income tax rate and social contribution rates.

100% agree. I often read tips which state ONE single aspect. But it matters all.
Thats why Bulgaria / Cyprus are interesting for many people as its quite straightforward.

 

[Dandyline]

100% agree. I often read tips which state ONE single aspect. But it matters all.
Thats why Bulgaria / Cyprus are interesting for many people as its quite straightforward.

Yes, what i like with Bulgaria is that you can pay a salary each month for a low tax and capped socials, if you earn above a certain amount, the total tax on payroll is even lower than dividends. And you don't need to go through audits.

 

[Ade]

Yes, what i like with Bulgaria is that you can pay a salary each month for a low tax and capped socials, if you earn above a certain amount, the total tax on payroll is even lower than dividends. And you don't need to go through audits.

Yes, I think its somewhere around 13.000€ per month where salary gets more attractive than paying out dividends.

 

[bubbledouble]

What is the effective tax rate above 13000€ salary ?

 

[Dandyline]

What is the effective tax rate above 13000€ salary ?

Its same for the whole amount, Around 11-12%

 

[Odeth]

Good morning Dandyline,

Seems you are well informed in terms of tax residency. I want to found a company. Can you give me some advice?

I am from Germany.

Have a good day.

If you stay within Schengen, Bulgaria is good. You can cash out from 20-30k/month as salary with low tax, don't have to wait for yearly dividends. Easy to maintain tax residency without staying in the country (with the correct setup).

If you want to stay outside of Schengen, Cyprus is good, travel in and out through North Cyprus while it looks like your inside the country. You can take a shareholder loan for 9% interest and then clear it against dividends.

No matter what, always make sure to have the correct setup (yearly rental contract, utilities, arrange monthly cc spending within the country with receipts).

Next try for reply.

 

[Ade]

What is the effective tax rate above 13000€ salary ?

At a monthly salary of 13.000€ it should be around 14,6% total expenses. With rising salary it will get closer to 10,x % because social contributions are capped. For example at 30.000€ monthly you will be around 12% total.

 

[Ade]

@Dandyline If you allow me to ask: Do you have (permanent) residency in Bulgaria / running a company in Bulgaria? Or did you choose another location?

 

[Dandyline]

@Ade Im currently looking into Bulgaria, seems like a solid choice for the EU market.

 

[Marshal]

@Ade Im currently looking into Bulgaria, seems like a solid choice for the EU market.

It certainly is. If you are a high earner and want to stay within EU, Bulgaria is a smart choice. And now since it's joined Schengen it is even more attractive.

 

[Marzio]

And now since it's joined Schengen

Only by air and sea at the moment.

https://ec.europa.eu/commission/presscorner/detail/en/ip_24_1722

 

[Marshal]

Only by air and sea at the moment.

https://ec.europa.eu/commission/presscorner/detail/en/ip_24_1722

Yes, correct. 9 out of 10 times I fly when I travel abroad (saves time and it's cheaper) so it's Schengen for me since 31 March

 

[JohnLocke]

Slovakia has a 7% dividend tax - one of the lowest in EU.

Don't you almost have to be a local to be able to live there peacefully?

 

[Marketint]

Don't you almost have to be a local to be able to live there peacefully?

I think so. Same for countries like Bulgaria. And Hungary. Also for non tourist cities in Asia. Less expats. Less English. Some places it’s better during high season. But it depends on your lifestyle. A peaceful life is for everyone different. I don’t speak Thai and I don’t want a Thai wife. For me it’s a choice and doesn’t mean that I doesn’t like my life here. And is doesn’t also mean that you never have to met with locals but don’t have to integrate. In most countries they are already happy that you come bring money.

And as Schopenhauer said “A man can be himself only so long as he is alone; and if he does not love solitude, he will not love freedom; for it is only when he is alone that he is really free. Constraint is always present in society, like a companion of whom there is no riddance; and in proportion to the greatness of a man’s individuality, it will be hard for him to bear the sacrifices which all intercourse with others demands”

Hard to blame him.

 

[Elonnn]

Yes, I owned a business in Bulgaria. It was very easy. I paid a local accountant to handle everything for me, including setting up a bank account and obtaining a residence card, all for a few hundred euros.

Accounting is slightly more expensive since it requires monthly submissions. Please be aware of the bureaucracy involved. Some examples: Transferring ownership of a car takes a day, and it's the same for a scooter.

They are generally easygoing people, though.


Maybe I was just unlucky. I have more of a western European/Scandinavian look.

How did you obtain the residence card? Did you actually rent/own property there or is there a service provider which could help with this?

 

[mud]

Don't you almost have to be a local to be able to live there peacefully?

Actually Slovakia is on my watch list. I've spent about 6 months there in the past 18 months and its pretty good. Low population, great roads, low cost of living, pretty landscape. More english spoken than Bulgaria (or France where I have residency, for that matter). The low dividend rate is certainly enticing and their desire to attracting foreign workers and investors is a new development. Its more central location in Europe makes is more travel friendly than the Balkans,

 

[bountymounty]

Sounds like a good destination for someone without family and only business in his live.

 

[JohnLocke]

I believe that Slovakia also has some gems where one can live, but I must agree with the above, it is not a place I would immediately take my family to live. I would find other places and live with a higher tax.

 

[mud]

I believe that Slovakia also has some gems where one can live, but I must agree with the above, it is not a place I would immediately take my family to live. I would find other places and live with a higher tax.

Actually I think its an ideal family destination. Unless the idea of bears walking down the street every so often freaks you out.

Its a small population, uncongested roads, lots of nature parks (incl Europes larges volcano), more castles per head of population than anywere in the world, good and cheap food & wine (somehow Tescos Slovakia is like half the price of Tesco UK), super family orientated population (highly christian) and very polite. (After 3 mnths renting a house at €450 a month we ended up with 5 farewell parties including people that didn't have a word of english to speak)

There's more english spoken than here in France.

I like the place and its easy to make friends.