Recommendation Malta or Cyprus?

[Paper Chaser]

Can you be more specific about those banks?

second that question, would be helpful to learn about thise banks!

Recently tried EPB, it was a painful verification process but I got through.
Other banks my Seychelles accountant suggests are:

• Ameria Bank – Armenia
• Caye International Bank – Belize
• Europacific Bank -Puerto Rico
• PAXUM BANK LIMITED- Dominica
• Bank of Asia – BVI
• CIM Banque – Switzerland
• Dukascopy – Switzerland
• Capital Security Bank – Cook islands
• Hermes Bank – Saint Lucia
• Boslil Bank Limited- Saint Lucia
• DBS BusinessCare – Singapore
• OCBC Bank – Singapore
• TransferWise – United Kingdom

If you don’t mind, please let us know how it goes/if they give you any new insight.

Just got my first responses. So it seems like there is no possibility to open MT bank accounts when having a MT corporation which has a SC holding. I really need help with a bank account for my special needs and I think you were right @JustAnotherNomad, there will very few banks to accept a MT corporation with a SC holding. Therefore, CY might work as a holding but as far as I can tell MT should be combined with an UK / IR holding. I will ask my accountants on that.

However, it is possible to avoid taxes by simply using an offshore corporation such as SC / CY etc. due to MT rules; when there is income outside of MT but you're a non-dom you don't have to pay taxes for it or even tell the government how much it is or where it does come from.

 

[Traveler]

However, it is possible to avoid taxes by simply using an offshore corporation such as SC / CY etc. due to MT rules; when there is income outside of MT but you're a non-dom you don't have to pay taxes for it or even tell the government how much it is or where it does come from.

This is incorrect on many levels and nowhere near as black and white as you're suggesting. I'd strongly recommend you to speak to a *qualified* tax consultant before making mistakes that will potentially end up being very costly. Banking seems to be the least of what you need to worry about at this point.

 

[Paper Chaser]

This is incorrect on many levels and nowhere near as black and white as you're suggesting. I'd strongly recommend you to speak to a *qualified* tax consultant before making mistakes that will potentially end up being very costly. Banking seems to be the least of what you need to worry about at this point.

So on which levels would that be incorrect, Sir? I hardly disagree with you regarding the bank account, I will have to open a new thread about this specific problem. It's actually the only problem I'm experiencing so far and I have yet to found a solution for it.

Back to the topic. So this might be the way to go:

When moving to MT permanently you can simply take all your money to MT without having to pay taxes for it. For the first year living there you can just use an offshore corporation if you're running any kind of an international business. You can do whatever you want with that money as long as it doesn't end up in MT. So all you really have to pay taxes for is the money ending up in MT, like for renting, cost of living etc. which would be only your personal taxes. In the second year you can open a MT LTD+UK LTD (holding) or IR LTD (holding) or maybe even some other non-blacklisted EU holding to benefit from the 5% corporation tax rules.

 

[Traveler]

Google the terms "permanent establishment" and "controlled foreign corporation". Then speak to a tax attorney.

If what you're describing was the case then there would be not a single person residing in Malta and paying tax. And almost everybody who happens to own an "international business" would be relocating to Malta immediately. Neither of these, I can assure, is the case

 

[JustAnotherNomad]

I guess the thing is that Malta and Cyprus don’t really enforce the law when it comes to non-doms.

@CuriousUser I thought you were going to talk to a German tax lawyer? I wouldn’t worry too much about the Maltese/Cypriot side.

 

[reesek]

very hard to get accounts in malta these days and they are not worth it

 

[Paper Chaser]

I guess the thing is that Malta and Cyprus don’t really enforce the law when it comes to non-doms.

@CuriousUser I thought you were going to talk to a German tax lawyer? I wouldn’t worry too much about the Maltese/Cypriot side.

Yes, I'm arranging some calls with some internationally based German accountants/tax lawyers at the moment. I'll compare all advices and update this thread/create a new one within the following weeks.

For all those wondering, here are the companies I've contacted yet:

https://www.drwerner.com/https://www.asset-protection-management.com/https://eurotaxconsulting.com/https://www.stpublius.com/https://www.gruendungskanzlei.eu/http://www.steuerkanzlei.co.uk/https://www.kresse-law.com/

very hard to get accounts in malta these days and they are not worth it

Bank accounts you mean? Why would they not be worth it? Plus, are they any crypto-friendly? Malta is well-known as the cryptos heaven...

 

[realnomad]

Great topic guys. I just feel like give you back some info I got confirmed recently by multiple certified accountants regarding Maltese tax residence.

Yes, you need to be on the island(s) for more than 183 days and be able to prove it... the first year.
If you do not stay in other jurisdictions for more than 6 months you won't lose your tax residency in Malta.

I got the tax residency certificate request form and among the reasons, there is: "not resided in any other jurisdiction outside Malta for more than 183 days during the last 12
months".

You can find the form by googling "malta tax certificate form pdf". I cannot post links yet.
I hope this helps someone

 

[reesek]

Bank accounts you mean? Why would they not be worth it? Plus, are they any crypto-friendly? Malta is well-known as the cryptos heaven...

yes
coz they are horrible
and forget about crypto

 

[Paper Chaser]

Yes, I'm arranging some calls with some internationally based German accountants/tax lawyers at the moment. I'll compare all advices and update this thread/create a new one within the following weeks.

For all those wondering, here are the companies I've contacted yet:

https://www.drwerner.com/https://www.asset-protection-management.com/https://eurotaxconsulting.com/[URL unfurl="true"]https://www.stpublius.com/[/URL]
https://www.gruendungskanzlei.eu/http://www.steuerkanzlei.co.uk/https://www.kresse-law.com/

Current update to all those waiting for my answer, I'm still aware of you!

Forget about those 3 corporations: asset-protection-management.com, stpublius.com as well as gruendungskanzlei.eu - they either appear to be really shady or don't even bother replying to you at all. Be careful if they are partnered with other websites/companies such as drwerner is partnered with steuerkanzlei (didn't know that before - which is positive news by the way!). You might get what you were looking for, but most of the times you will be left-alone completely afterwards. Pretty sure they're one of those b*tches that will even charge you a horrible amount if you want to cut all ties to them. So here is where the good news kick in!

On the other hand, there are 4 really promising companies looking real good: eurotaxconsulting.com, kresse-law.com as well as drwerner.com (mainly focuses on Malta/Cyprus) + steuerkanzlei.co.uk (mainly focuses on UK (England/Ireland/Scottland). I can strongly recommend all of them at this point already even though I'm still in contact with them. They seem to actually care about their clients and will take you by the hand if you're new to this whole thing or if you even want to relocate there (Malta/Cyprus or UK). Drwerner and Steuerkanzlei looking to be my favorite guys that will setup a MT/CY or MT/UK solution to get a working tax scheme of 5% for me.

As soon as I can provide some more details about the whole topic I will come back to this page and update again for a final time and may answer your questions you might have. Until then - stay calm and healthy!

 

[JustAnotherNomad]

Please keep us posted what kind of setup you go for.

 

[Spinat]

@CuriousUser why do you consult German tax specialists if you are looking into Malta and Cyprus, what did I miss in this thread?

 

[JustAnotherNomad]

Germany has exit tax. It’s always a good idea to talk to advisors from the country you’re moving away from as well.

 

[Paper Chaser]

@CuriousUser why do you consult German tax specialists if you are looking into Malta and Cyprus, what did I miss in this thread?

Those mentioned companies/law offices relocated from Germany to Malta/Cyprus/UK in the early 2000s/2010s. So they are aware of German tax laws as well as foreign countries (of which they relocated to, such as MT/CY/UK/and many more). That's a very important reason to look for German-rooted specialists since we Germans do have a very strict government along very very strict tax laws.
Everyone outside of Germany might do the same for his or her specific situation in his or her specific country, but I decided to share this knowledge with you anyways. I mean, since all of those companies/law offices are meanwhile internationally-based everyone can benefit from this thread in some kind of way.

Germany has exit tax. It’s always a good idea to talk to advisors from the country you’re moving away from as well.

This! Thanks again for warning me about this so I can prepare all further steps from now! And yeah, ofcourse I will let you know as soon as I finally got some answers!

Curious, why do you stick with MT + Holding? Non-Dom in CY is much better in my opinion. Offshore dividends aren't taxed too but you can also bring them into the country which isn't allowed in MT. Sure, the cooperate tax is 12.5% not 35% minus 30%. But the non-dom status is guranteed for 17 years here while MT could kill it in the next 3 years if you are unlucky.

It's simply for the reason that I want to relocate to MT myself, CY ain't that much of an attraction to me personally.
Nothing is for sure nowadays. So speaking of >guaranteed for 17 years< doesn't seem to be a valid argument in this case. I rather go for the lowest tax structure in the EU for the longest time possible than the second lowest one dreaming of the next 50 years to be exactly like this. If times change, and yeah you're prolly right they will, so do I (and I'm pretty sure most of the companies relocating/relocated in these kind of countries). Plus, when it comes down to the personal preference it's MT for me. That's all.

---

By the way, did you guys know Madeira (Portugal) is the very last EU tax heaven alongside Malta these days?

 

[Marzio]

Madeira (Portugal) is the very last EU tax heaven

Yes if you want to invest 75K + hire at least a person and pay 5% corporate tax. If you have to pay 5% tax then Malta is probably better.

 

[Paper Chaser]

Yes if you want to invest 75K + hire at least a person and pay 5% corporate tax. If you have to pay 5% tax then Malta is probably better.

You only need to invest 75k if you hire less than 5 people within the first 2 years of establishment. Plus, being a CEO already counts as a hired person so you don't have to hire anyone else unless you don't want to invest 75k.

 

[Silvio]

Curious, why do you stick with MT + Holding? Non-Dom in CY is much better in my opinion. Offshore dividends aren't taxed too but you can also bring them into the country which isn't allowed in MT. Sure, the cooperate tax is 12.5% not 35% minus 30%. But the non-dom status is guranteed for 17 years here while MT could kill it in the next 3 years if you are unlucky.

If they kill the non-dom in Malta their island will be empty within a week and they know it. I'd trust MT way more than I will trust an Russian-laundromat-turned-country that stole 30% of its depositors cash straight from the bank account (nothing against Russians, but as @Martin Everson says if there are lots of Russians expect problems in the future).
And about bringing dividends into the country: why would you ever bring money into MT (or CY for that matter)? The whole point is to get residency there, in order to be able to bank in more reputable places.

 

[Martin Everson]

If they kill the non-dom in Malta their island will be empty within a week and they know it.

Exactly

And about bringing dividends into the country: why would you ever bring money into MT (or CY for that matter)? The whole point is to get residency there, in order to be able to bank in more reputable places.

Exactly

 

[Paper Chaser]

Alright guys, I did some research and got some first responses from the companies mentioned above.

Although I'm only relating to Germany right now, this might be applicable to similar (high-tax) EU countries, too! However, I strongly advise you to additionally research about your home country!

So let's start.

When moving from Germany to a low-tax country like Malta, Cyprus etc. you first have to cut all ties but you also have to give up your German company (if you got one) unless it becomes just a Holding of your new offshore corporation(s)/structure(s). Since I don't have a German company myself I won't and can't even go any further in detail.

Secondly, you need to stay in your new country for at least 12 months. Staying abroad for less than 12 months - only if you want to return to Germany permanently again though - could potentially bring some huge troubles since the German government would treat you as a temporarily emigrated person. That being said, you would have to pay German taxes even if you weren't located in Germany for the last 12 months. Ofcourse, you are allowed to travel in this time, but the point is you really need to live in your new country for quite some time IF you will sooner or later return to Germany permanently again.

Regarding the 183-days-rule, this rule only applies once you're living abroad for more than 12 months else it won't protect you.

Scenario 1: Relocating from Germany to Malta for 1 1/2 years (18 months), then relocating back to Germany due to let's say the lack of single women in Malta. Speaking of this scenario, you have fulfilled the minimum stay and won't have to pay any additional taxes when returning. However, make sure that you can prove your past permanent stay on Malta just in case the German government wants additional explanations/proofs about your situation (=> 183-days-rule kicks in => prepare yourself for a lot of paperwork)!

Scenario 2: Relocating from Germany to Cyprus for 11 months, then relocating back to Germany due to let's say the lack of cloudy days in Cyprus. Speaking of this scenario, you didn't fulfill the minimum stay so you're basically just gambling. Most of the times the German government will ask you to pay additional taxes in such cases. Don't ever gamble against a government.

Next point is renting/buying real estate in different countries while living abroad. Alright so that's as tricky as the minimum stay I just explained. Again, you better live abroad for quite some time first (speaking of the 12 months minimum) before creating new ties to Germany. You can basically rent/buy real estate in ANY country, just keep in mind you can (and high likely will) be asked by those countries you rent/buy real estate in for proofs of your centre of life (=> 183-days-rule). So as soon as you start investing into real estate, you got to have your s**t together and prepare for alot of paperwork.

Scenario 1: Renting a flat in Germany for let's say the purpose of having a 2nd stay or just a holiday home. Assuming you already have fulfilled your minimum stay in Malta. Speaking of this case, you will constantly have to prove your centre of life still is in Malta. You could even travel all year long - as long as you can prove you don't stay in Germany for more than 182 days - but that would be hell of a lot of paperwork though.

Scenario 2: Buying a house in Germany for investment purposes. Assuming you already have fulfilled your minimum stay in Cyprus. In this case you can either use your house as a 2nd stay/holiday home, which will simply result in the same paperwork massacre mentioned in scenario 1, or you're renting it out. Now this is where the fun begins. Renting out won't result in a loss of your tax advantages either, but the money gained through your investment (doesn't matter if you're gaining rental fees or re-selling the house for a higher price) will always be subject to German taxation. So besides hiring a new secretary for your paperwork you should also consider hiring another German-based tax consultant in this case.

So generally speaking, you can rent or even buy as many properties in as many different countries as long as you've got your s**t together (absolved minimum stay, constantly collecting and providing proof of centre of life) without losing your tax advantages. Just make sure you got yourself a good bunch of new secretaries and as many tax consultants as there are countries you're connected with.

I will add another post tomorrow regarding the non-dom status and potential offshore structures, which might be more interesting for most of you.

Stay tuned.

 

[Paper Chaser]

Here we go again.

Although I'm only relating to Malta right now, this might be applicable to similar (low-tax) countries like Cyprus, too! Again, you should always do the additional research about your particular situation!

When relocating to Malta you can make use of the non-dom status most of the times. Like some users already suggested the Maltese government don't really watch over non-doms. You can literally check a single box field on your tax files to make use of the status and that's it. This invites you to heavily abuse the system in many different ways. However, the downside is if you run into troubles with your home country Malta will let you down high likely and won't do s**t for you even if you were an honest business man legitimately paying taxes.

Relocating to Malta as a trader owning a tax-free offshore company in let's say Seychelles. Things like that won't work out anymore because Malta, Cyprus etc. apply to the CFC rules since last year, too! If you don't have the right setup (Malta LTD + UK Holding or Malta LTD + Cyprus Holding for example) you won't be able to save any taxes, but actually commit tax evasion in Malta instead.

Every European country will join all of the EU agreements time after time. It's really just a matter of time. Tax evasion instead of avoidance was never a wise thing to do, but even avoidance in offshore-friendly countries like Malta or Cyprus gets harder by the day. Be careful with your setup! Know the rules of country A AND country B OR know a tax consultant who knows.

Is there anything you guys would like to know or did I miss out on some questions? Just let me know.

By the way, I will go with drwerner.com who are partnered with steuerkanzlei.co.uk. They're 2 German brothers (one residing in Malta leading drwerner.com and the other one residing in UK leading steuerkanzlei.co.uk) who know very well of the taxation systems around the world. Their websites are translated into English as well and they ofcourse do look for international clients, so I can strongly recommend those 2 companies to anyone being in a similar situation!