Recommendation Malta or Cyprus?

[jackfrost]

In general you do not have to declare any foreign income/assets that you do not remit to Malta as an ordinary Malta non-dom resident + tax resident.

For 2018 that will change a bit that there is the 5000 eur minimum tax for "ordinary" non-doms. This does not apply if you use any of their 15-25k a year residency schemes which will get you out of the 183 days rule but only make sense for small amount of people as residing only a few days will create problems with other countries etc pp.

That minimum tax is on the basis that you earn more than 35.000 eur in foreign income outside of Malta. If you just pay the 5k all is good.

If you don't pay it and claim that you generated less than 35k foreign income then they might / will inspect you and you will have to proof your foreign income is less.

In general the tax law probably has provisions for them to inspect you and ask for your foreign income etc but they have that anyways with the new reporting standards around the world.

In your tax declaration however only your Maltese sourced (physically being on the island no matter who you work for e.g. remote outside of Malta), any foreign income remitted to Malta as in transferred to Maltese bank account, payed with credit card, ATM withdrawal and in theory cash brought into the country so basically any form of electronic or cash currency being spent or brought into the Maltese jurisdiction e.g. a bank account is declared and taxed (except for some passive things etc).

So the usual "ordinary" non-dom will be paying 5k which will include remitted money (rent etc unless you moved to Malta with substantial previous assets which are remitted tax free), keep all the money in foreign accounts (as said previously using Maltese banks is batshit crazy anyways except for BOV but still 0 reason usually for this) and call it a day no matter what kind of foreign income is being generated.

 

[JohnLocke]

Please keep the posts within this thread strictly yo the topic starters title or I will have to close this thread!

 

[Macky]

Cyprus non-dom is the way to go.
Malta is facing issues with tax refunds, and you need to have a proper structure in place which makes it more expensive if you dont make 6-figures a year.

 

[jackfrost]

This. If you have the money (imo you should not think about this under 6 figures anyways) hands down Malta, under 100k Cyprus.
Structures are as simple as it gets btw.

 

[negon]

Any time Cyprus over Malta, I don't know hwy people at all consider Malta for their offshore company setup! Only if you are in some sort of banking biz and you have high figures available to invest then Malta is worth it, otherwise forget it.

 

[jackfrost]

@devnull update on the current refund situation. backlog is about 1 year so what you do is you file your company tax return for 2018 now but you do not pay until either 1) revenue asks you to pay which means they have processed your filing / claims and you are already in front of the backlog or 2) is is final payment date June 2020.

Overall you are currently looking at about 1 month between payment and getting the refund in either scenario. This is for 100k+ actual tax payment amounts. Smaller sums get processed faster.

And yes, looking back and looking at the "leakage"... Cyprus is definitly not the way to go if you make enough money for either scenario...

 

[myhand]

And yes, looking back and looking at the "leakage"... Cyprus is definitly not the way to go if you make enough money for either scenario...

So you say Malta is better in that situation?

 

[jackfrost]

I could be wrong but i don't see the numbers working for Cyprus at all if you make a healthy profit + the Maltese system is so easy and clear cut. At the end of the day operating, living etc expenses will be similar and more likely to be a rounding error in the big scheme of things so it comes down to 5% + 5k minimum payment vs 12.5% + income tax on fair market salary.

Malta you will need the second company which is a piece of cake both financially + 0 time effort both in setup and upkeep.

Cyprus you have the issue of only dividends etc to be non taxed and to play by the rules you will have to earn a fair market salary at least which will be taxed - on top of the 12.5% corp rate. This is big.

So it is 1) more difficult 2) more grey zone and 3) much more expensive if you have the profits that you -should- be having before going on such a venture.

Cyprus does have its 60 days for tax residency + easier remittance rules going although the latter is subjective as pretty much anything that is older than a couple years can be remitted to Malta tax free too so kind of a null point.

60 days is a nice thing if you travel a lot but you might again run into problems with your passport country, other country you stay in for longer. Malta btw will not check those 183 days... they will not check at all really to be honest unless yøu apply for the actual tax certificate (WHICH IS A MUST people thats why nomad life blah blah does not work at all). They will then ask you for receipts or bank statements of your card that you swipe in Malta to support the fact that you are actually living on the island and spending money there apart from just having a rental contract.

But going by the rules yes Cyprus has the 60 days going for itself if you travel a lot. I have to kind of manage my year a bit to make sure with all my travels i still hit my 183+ days on Malta (yes i make sure to really hit 200).

Cyprus might be easier if you require local banking instead of EU banking (again i wouldnt bank in either country...) although both Lombard and BNF seem to be easy to get fully insured regular bank accounts for both private + corporate lately.

 

[GrumpyMess]

down to 5% + 5k minimum payment

Is it 5k minimum payment for a non dom residence?

they will not check at all really to be honest unless yøu apply for the actual tax certificate (WHICH IS A MUST people thats why nomad life blah blah does not work at all). They will then ask you for receipts or bank statements of your card that you swipe in Malta to support the fact that you are actually living on the island and spending money there apart from just having a rental contract.

Are there any good loopholes?

 

[1nomad]

besides 5k tax, do you have to pay any social contributions, health insurance etc? Can you run Seychelles IBC as a non-dom resident?

 

[yndzone]

tax and vat refund in Malta works very well. and if you make profict in hk and dont bring money to malta, you dont need to pay any tax in Malta for that.
UAE company and live in thailand?ahahaha yes i am

 

[JohnLocke]

besides 5k tax, do you have to pay any social contributions, health insurance etc?

Does someone know if there is such things to pay? I would be nice to know about all taxes applicable to run a foreign business in Malta.

 

[jackfrost]

If you are not employed and register as self sufficient + provide a private health insurance certificate (any private EU health insurance usually covers all of the EU no matter the residency) you are not liable to any social security, health care whatever taxes.

you are also not liable to the 5k in some cases.

the 5k "expat" tax is like this:

- if you do declare enough income / REMITTED funds to malta that at least a 5k eur tax payment a year would be generated Malta will ask you to declare your world wide income and if that is above 35k - even if not remitted to Malta - you will have to pay a 5k flat tax no matter what. this does not go above 5k no matter how much money you make.

So in theory there are ways to get around that 5k personal tax but it is absolutely not worth it. for fucks sake you are pretty much tax free no matter the income. pax the damn 5k and they wont look into you, you wont need to declare world wide income etc pp

Just declare enough money remitted to Malta a year that it covers exactly those 5k and then you can also use that + a few receipts to request your official tax certificate which is crucial to not fall into the stupid "digital nomad" trap.

No other taxes besides the 35% 6/7th corporate taxes refund which works out to 5% unless you are dealing with immovable things like real estate / renting out.

 

[jackfrost]

besides 5k tax, do you have to pay any social contributions, health insurance etc? Can you run Seychelles IBC as a non-dom resident?

none of these things if you are not employed / register as self sufficient

no idea about seychelles but yes you can run foreign companies but you should do so through a Maltese company that is being held by a foreign company that is tax exempt e.g. gibraltar etc. CFC rules will come into play otherwise

 

[jackfrost]

Is it 5k minimum payment for a non dom residence?


Are there any good loopholes?

the 5k is if you declare less than 35k worldwide income and in general less remitted money etc that a tax bill < 5k would be generated. you would then have to declare all your world wide income and if it is >35k you would have to pay the 5k minimum tax (not more no matter the income)

I won't suggest loop holes but i have yet to hear of anyone being checked in detail about his flights, days on the island, etc pp.

The only time i have ever heard of people being checked / encountered it myself is when you request your private tax certificate (crucial for your citizenship country). They will ask you for bank statement or credit card statement or receipts or gym membership etc to kind of proof that you are at least somewhat living on the island and spending money there.

I have not heard of people being desicted by the day and i have heard of people just taking grocery etc receipts from friends / people they know.

But this is all hear say and my own experience.

I do stay 183+ days on the island and protocol that + keep bags of grocery etc receipts.

Also real rental contract of 12months+ is needed.

 

[GrumpyMess]

Thank you for sharing your experience. The 5k only tax payment is quite an advantageous deal together with 5% corp tax, but I can't imagine myself living on a tiny island for a 180 days. I would like Cyprus to have such a good tax regime

Also real rental contract of 12months+ is needed.

As far as I know it has to be minimum 10k contract

 

[1nomad]

none of these things if you are not employed / register as self sufficient

no idea about seychelles but yes you can run foreign companies but you should do so through a Maltese company that is being held by a foreign company that is tax exempt e.g. gibraltar etc. CFC rules will come into play otherwise

Yes, CFC rules, but non-dom company is taxed just for a local income. Theoretically even though your seychelles company becomes a local non-dom company, you still don't have to pay tax if incomes are from abroad, right?

As for 180 days staying. I think if you pay 5k tax, Maltese tax authorities never tell you "keep your money, we found out you were here only 179 days"

 

[Andrei636]

Whilst my company formation process in Malta, my lawyer tells me often different stories, every time when i come forward. At the beginning, i wanted everything on one MT company, they told me, i should seperate my grey-area business to external offshore company in Hong Kong and my MT company should be a web services and web administration company instead.

As a maltese resident, if you own an offshore trading company and manage it from malta, malta does not look into it to tax it at 35%?
would you advice malta for crypto trading ?

 

[JohnLocke]

Do you mean that in your scenario explained there will be no taxes if you do business using a Cyprus, Seychelles or any other offshore corp?

 

[georgio]

Yes, you are right.
I mean you may be fully exempt from CIT in UK if you are living in other country.

Where did you hear this? If you have a UK limited company, you pay Corporation Tax. Do you have any gov.uk link? Or you are talking about dividend tax?