Optimal Setup for a Digital Telecommunications Company

[offshshsh]

Hello everyone,

I’m reaching out for advice and feedback on setting up an offshore company for a 100% digital telecommunications business that my partner and I have been developing for about a year.

Context:​

• We generated a net profit of $950,000 this year, with all payments made exclusively in crypto-currencies (BTC, USDT, ETH). It was impossible to set up a credit card system because we don't have a company.
• Currently, our business is not yet declared. However, to avoid potential issues in the future, we want to formalize the structure and comply with legal and tax obligations.
• My profile: I’m currently a resident in France.
• My partner’s profile: Resident in Belgium.
• We plan to change our tax residence in the coming months or years for both personal and fiscal reasons.

Our Objectives:​

1. Tax optimization: Identify a jurisdiction that minimizes tax liability while staying compliant with international laws.
2. Future growth: Prepare a structure that allows us to scale our business internationally without major tax or legal hurdles.

Questions:​

1. Recommended jurisdictions: Which countries would be best suited for our company, given that we operate entirely online and have international clients?
2. Personal tax residence: As founders, which country would be ideal for us to relocate to in order to align our personal and corporate interests?
3. Crypto management: Are there any jurisdictions particularly crypto-friendly in terms of reporting, management, and conversion of funds?
4. Banking and payments: Any suggestions for efficiently handling cryptocurrency payments through compatible banks or financial services?

If anyone has had similar experiences or knows reliable experts who can guide us through this process, your recommendations would be greatly appreciated!

 

[daniels27]

Welcome here and congratulations on such amazing business.

I think in your situations, there are a couple of different approaches.

• No residency anywhere, travelling as much as possible
• Residency in a low / no tax country and operate from there legally
• Residency in a country without PE issues while having economic substance in a country with low / no tax, while just drawing dividends
• Live in a country that simply does not care or cannot care
• Keep it going as usual and pay out some crypto with an invoice for consulting

It mainly depends a bit on your personal preferences where to live.

For the residency in a low / no tax country, you could for example live in Cyprus (about 2%), Gibraltar (flat tax 40k GBP), Portugal NHR, St. Barths, Monaco (not for the French guy though), etc.

Countries with no PE issues or does not care would be like Southeast Asia, South America, etc.

I personally would recommend a Singapore company if you do not have economic substance and can run it tax free, alternatively Cyprus if you prefer the EU. US LLC, I would not necesarily recommend but could be possible.

What countries would you like to live in?
Do you have/need employees?

And another question, what does the company offer? Your business sounds like the next big thing.

 

[offshshsh]

Welcome here and congratulations on such amazing business.

I think in your situations, there are a couple of different approaches.

• No residency anywhere, travelling as much as possible
• Residency in a low / no tax country and operate from there legally
• Residency in a country without PE issues while having economic substance in a country with low / no tax, while just drawing dividends
• Live in a country that simply does not care or cannot care
• Keep it going as usual and pay out some crypto with an invoice for consulting

It mainly depends a bit on your personal preferences where to live.

For the residency in a low / no tax country, you could for example live in Cyprus (about 2%), Gibraltar (flat tax 40k GBP), Portugal NHR, St. Barths, Monaco (not for the French guy though), etc.

Countries with no PE issues or does not care would be like Southeast Asia, South America, etc.

I personally would recommend a Singapore company if you do not have economic substance and can run it tax free, alternatively Cyprus if you prefer the EU. US LLC, I would not necesarily recommend but could be possible.

What countries would you like to live in?
Do you have/need employees?

And another question, what does the company offer? Your business sounds like the next big thing.

First of all, thank you for your response and recommendations.

To answer your questions:

• Employees: Currently, we don't have any employees, but in the future, we might need to hire for support or other operational needs.
• Country of residence: We don’t have a specific preference at the moment. We’re young, which gives us the flexibility to test different countries and find the one that best suits our lifestyle and needs.

Service offered:
We provide VOIP termination services from tier 1 operators to individuals and small businesses on a retail pay-as-you-go model. The creation of a company would allow us to access better pricing, enabling us to offer more attractive rates to our clients. It would also help us expand our business, always focused on the VOIP sector.

 

[daniels27]

We once had a discussion which came to this conclusion

Estonia residence + Estonia holding company + Malta trading company (forming a fiscal unit):
Total effective tax is 5% (corporate+personal)
No need to spend time in Estonia to maintain tax residence

There are probably many other options. Including hiring a director somewhere and then you receive dividends taxfree in a suitable jurisdiction.

Would it be possible to give the management to somebody else and just do "coding"?