New setup - Liechtenstein for personal investment vehicle?

[phyllisjohnson]

Context:

• I own an Austrian limited (GmbH) for a few years now. Personally living in Europe.
• The company is a holding vehicle, mainly invested in the stock market, physical gold and a little crypto + forex trading going on (however the latter mostly disregardable)
• I expect a 7 figure payment due to selling all rights to a (digital) product the company has created years ago but never found use / ways to capitalise until today

As I want to use this payment for further investments on the markets I’d obviously like to reduce the taxes paid to a minimum. I currently do not plan on paying out dividends or salary, as I’ll disregard personal tax residency for the matter of this post. The product can easily be transferred / sold to the new entity before being sold off to the buyer.

I was thinking about Liechtenstein, as that seems to fit my criteria:

• Low to no taxes (corporate tax, dividend/withholding tax)
• Anonymity and asset protection:
  • Mostly anonymity from snooping eyes within my circle
  • I dont mind letting the fiscus know (not evading taxes, merely optimising), however not having to is even better
  • Assets should be protected (not married but might be in the future)
• Stable and tangible jurisdiction (I can actually meet the people administrating my company as nominees)

I won’t be having use for the current holding in AT anymore, so I’m looking for ways to liquidate it and/or bring it into the new entity. The current GmbH has an outstanding loan to the UBO of around 6 figures, the assets in the holding are only 5 figures however. Maybe that can be utilised in some way.

My ask:

• Recommended alternatives to Liechtenstein?
• Which type (Anstalt, Foundation/Trust, GmbH, AG, …) and corporate structure? Enough to get a holding with a nominee or shall I incorporate a Trust owning a holding?
• Any way I can make use of the existing structure? Shall I just liquidate it?
• If the new structure should be anonymous/detached from myself and assets protected, how can I transfer funds (especially going in for further investments)? Shall I keep the Austrian GmbH for this purpose and use it as a proxy to Liechtenstein as thats already known to be mine?

Obviously I will consult experts on this matter supporting the incorporation and legal documents, however I’d like to have an idea and proposal before approaching my advisors.

 

[Martin Everson]

The product can easily be transferred / sold to the new entity before being sold off to the buyer.

Firstly moving an asset out of the company at a below market price to sell via a new structure for 7 figures is clearly profit shifting and will fall foul of BEPS. Secondly you live in Austria (from profile) and company is in Austria which implements GAAR which will trip you up. What your suggesting is nothing more than an abusive practice i.e moving of a company asset to gain a tax advantage via an artificial transaction which falls foul of GAAR rules. You will pay heavily if you go this route and are caught. At some point the money will hit an account and as UBO will get reported to your taxman under CRS possibly. If they decide to look into the source of that income and they see the asset was transferred out of the company and into a new structure to generate 7 figures you will get problems under GAAR big time. You will have had to provide all the paperwork (agreements) to the bank to bank any new structiure and transaction so a paper trail is there for the taxman to gather and see exactly what I have said took place i.e a structured transaction designed to obtain a tax advantage took place which is against GAAR.

My ask:

• Recommended alternatives to Liechtenstein?
• Which type (Anstalt, Foundation/Trust, GmbH, AG, …) and corporate structure? Enough to get a holding with a nominee or shall I incorporate a Trust owning a holding?
• Any way I can make use of the existing structure? Shall I just liquidate it?
• If the new structure should be anonymous/detached from myself and assets protected, how can I transfer funds (especially going in for further investments)? Shall I keep the Austrian GmbH for this purpose and use it as a proxy to Liechtenstein as thats already known to be mine?

Also your thinking here is overkill in terms of what you want to achieve. Sounds very expensive and not sure it will even achieve its goal in 2024.

 

[phyllisjohnson]

Firstly moving an asset out of the company at a below market price to sell via a new structure for 7 figures is clearly profit shifting and will fall foul of BEPS. Secondly you live in Austria (from profile) and company is in Austria which implements GAAR which will trip

Thanks for the honesty, clearly underestimated the idea I had. Definately not trying to achieve something illega).

Also your thinking here is overkill in terms of what you want to achieve. Sounds very expensive and not sure it will even achieve its goal in 2024.

That makes sense, however looking a few years ahead I might be harder to then start restructuring my setup and detaching personally (no ownership) than it is at the moment.

However I am missing the experience to properly asses that.

Can you point me to resources or give advice personally on a way forward?

 

[Martin Everson]

Can you point me to resources or give advice personally on a way forward?

What you need is professional advice from a good local private bank or specialized M&A type firm on how to conduct the transaction in most efficient way for both parties to the transaction.

 

[CyprusLawyer101]

Points rsised from Martin Everson are accurate, however this may still be structurable and not fall foul of any anti avoidance provisions.

 

[EliasIT]

Points rsised from Martin Everson are accurate, however this may still be structurable and not fall foul of any anti avoidance provisions.

what you want to say is that you would be able to help with restructuring the guy's operation in Cyprus without to get him into troubles?

 

[CyprusLawyer101]

what you want to say is that you would be able to help with restructuring the guy's operation in Cyprus without to get him into troubles?

Yes, this is what I am saying though still the logistics of it have to be assessed.

 

[Shories]

Doing this setup you would be liable to an audit by the Austrian authorities or even the authorities of the country you currently reside in. With that being said, your best option would be to change your current tax residency and then finish with the sale of the assets, for example Cyprus non dom regime would be something that would be ideal for your situation.

In regards to anonymity you can setup a trust in Cyprus, who would be the owner of the assets

 

[mytoofood]

In regards to anonymity you can setup a trust in Cyprus, who would be the owner of the assets

According to what I've read in some of the mentor group gold threads and public forums, it's no longer enough to protect your assets from authorities or creditors.