I guess I could have posted this as a reply to this thread, but it's slightly more specific, so I figured a new thread might be in order.
I don't remember who suggested this originally, was it @TheCryptoAnt or @wellington ?
Anyway, someone mentioned they live in Thailand full time, living off dividends which they receive every couple of years.
So during a "payout year", they just spend less than 180 days in Thailand and their income isn't taxed in Thailand.
As much as I like Thailand, I have been wondering if something similar could work elsewhere (in a first-world country), and Switzerland seems like a good candidate:
For example:
- Set up a company in a low-tax canton like Zug
- Live in a place with low taxes, like Glarus (or wherever taxes are low) - Switzerland is small, so even if you live in the middle of nowhere, it's never far from a major city
- Only pay out what you need to live - not sure if salary or dividends would be better, probably not a big difference
- Optional: Add a holding company in a country without withholding tax (Cyprus, Malta, Estonia, ...) or use a Swiss branch instead of a Swiss subsidiary - the point is that you can transfer dividends to the parent entity without paying Swiss WHT
- The holding company shouldn't be a problem, as long as you have some substance, as Switzerland doesn't have CFC rules, which makes it an ideal candidate (in most other countries, this could be an issue)
- Every couple of years, you move to e.g. Dubai and spend 183+ days there - this is when you cash out from your holding company
- Alternatively, you could also move to Estonia/Cyprus/Malta/maybe Hong Kong?, then you wouldn't even need a holding company, as Switzerland doesn't impose WHT on dividends paid to those countries
- Switzerland doesn't have an exit tax for individuals, so moving abroad shouldn't trigger tax, as long as your business remains in Switzerland
- It's a Schengen country, so if you really live in e.g. Italy, France, Spain... would be hard to track (certainly not in focus for the authorities if you're not a citizen of those countries)
- It's possible to get a binding confirmation from the Swiss tax office that your setup will work, even before you move to the country - it's not like Dubai or Cyprus where three advisors will give you five different answers.
This would allow one to live in a proper first-world country in Europe (not a place like Cyprus or Malta) while paying minimal taxes, basically only 10-11% or so in corporate income taxes + some tax for the money you pay out while living in Switzerland.
Heck, you could probably even set up another entity in a low- or zero-tax jurisdiction and shift profits there, as long as there is some substance, since Switzerland doesn't have CFC rules. For example, Malta only has 5% CIT.
Anything I'm missing?
Also tagging @Marzio since he usually has good ideas.
I don't remember who suggested this originally, was it @TheCryptoAnt or @wellington ?
Anyway, someone mentioned they live in Thailand full time, living off dividends which they receive every couple of years.
So during a "payout year", they just spend less than 180 days in Thailand and their income isn't taxed in Thailand.
As much as I like Thailand, I have been wondering if something similar could work elsewhere (in a first-world country), and Switzerland seems like a good candidate:
For example:
- Set up a company in a low-tax canton like Zug
- Live in a place with low taxes, like Glarus (or wherever taxes are low) - Switzerland is small, so even if you live in the middle of nowhere, it's never far from a major city
- Only pay out what you need to live - not sure if salary or dividends would be better, probably not a big difference
- Optional: Add a holding company in a country without withholding tax (Cyprus, Malta, Estonia, ...) or use a Swiss branch instead of a Swiss subsidiary - the point is that you can transfer dividends to the parent entity without paying Swiss WHT
- The holding company shouldn't be a problem, as long as you have some substance, as Switzerland doesn't have CFC rules, which makes it an ideal candidate (in most other countries, this could be an issue)
- Every couple of years, you move to e.g. Dubai and spend 183+ days there - this is when you cash out from your holding company
- Alternatively, you could also move to Estonia/Cyprus/Malta/maybe Hong Kong?, then you wouldn't even need a holding company, as Switzerland doesn't impose WHT on dividends paid to those countries
- Switzerland doesn't have an exit tax for individuals, so moving abroad shouldn't trigger tax, as long as your business remains in Switzerland
- It's a Schengen country, so if you really live in e.g. Italy, France, Spain... would be hard to track (certainly not in focus for the authorities if you're not a citizen of those countries)
- It's possible to get a binding confirmation from the Swiss tax office that your setup will work, even before you move to the country - it's not like Dubai or Cyprus where three advisors will give you five different answers.
This would allow one to live in a proper first-world country in Europe (not a place like Cyprus or Malta) while paying minimal taxes, basically only 10-11% or so in corporate income taxes + some tax for the money you pay out while living in Switzerland.
Heck, you could probably even set up another entity in a low- or zero-tax jurisdiction and shift profits there, as long as there is some substance, since Switzerland doesn't have CFC rules. For example, Malta only has 5% CIT.
Anything I'm missing?
Also tagging @Marzio since he usually has good ideas.
