Question Refusal of 70-90% Income Exclusive in Italy, What Netx?

[A1988]

Just wanted to bring to everyones notice that my request has been refused for 70-90% exemption in Italy stating "I did not move to italy with the intention to take the 70-90% exemption of income". I was involved in Research and Development activity and finished the R&D in 2023 and moved to italy in 2019. Again, I did not make any income in this period in Italy and now when the time came for commercialization of the product I am stuck with this huge blow. I have my R & D in Italy and a business partner based in Italy, hence I moved.
My present situation is that,

1. I would like to move out of italy without creating any problems or trigerring any issue with the tax authorities.
2.I would like to move to either UK, Ireland, Malta (less preferred0 and take advantage of non dom program also I have 2 kids who would start their preschooling.
3. I would like to know if anyone knows if a structure where I pay 0-5% in corporate tax?
4. I have my business partner and R and D in Italy so daily flights would be a plus, ideally within 2hrs and not more.
5. I am expecting capital gains in the next 3-4 years.

Any suggestion or experience of the situation would be very welcome, I would want to stay in the country permanently and want my children to build their life and network in it, I am not really interested in Middle eastern countries as I have lived there and I feel its not best for my children to be exposed to that lifestyle and specially having daughters. I turn 35 in may this year.

sorry for excessive information, just wanted everyone to know that the regime can come up with any kind of excuses to refuse of accept what suits them or their objectives.

 

[A1988]

I don't think there is a country you are searching for
Just pay tax

there is and I will find it. I dont mind paying taxes but I will not pay 43% either.

sadly, anything is better than the EU. If you can’t decide on a country, buy a sailboat and travel the world. Your children will be forever grateful.

okay, thanks for the suggestion

Close to Saudi Arabia... which is their biggest ally? Close to Yemen which is constantly weakened by this alliance? Geopolitically you know nothing.



Message is pretty clear, you messed up the paperwork.



If you're sure your profits will be substantial, move to Malta, incorporate company abroad which have special tax for IP (Cyprus probably). Your kids will learn English in 3 years then move on to some other country.

Buddy, nobody screwed up the paperwork, apparently the law is not that clear and straightforward. They want you to show that you moved to Italy "only" to make use of the exemption. I have clarified with one of the best tax advisors in Italy. Unfortunately, my intention was not to use the exemption but to develop my product for commercialization which took me 4 years and now unfortunately I cannot use the exemption.

Could work well, I still don't get the the great opposition to Europe and the EU. Apparently there is no explanation either.

I agree, I have lived in Asia, seen africa and now live in europe. People have become oblivious of the liberties they enjoy in europe and how the general population and politics is much better than anywhere else on the planet. But, everybody has an opinion of their own which is good.

 

[Marzio]

my intention was not to use the exemption

Then you have nothing to whine about.

I would like to know if anyone knows if a structure where I pay 0-5% in corporate tax?

Move to Malta and use a resident non-domiciled company.

"Companies which are resident but not domiciled (or vice versa) in Malta are subject to tax in Malta on all income and chargeable gains arising in Malta, and on income arising outside Malta which is remitted back to Malta. No tax is payable on foreign income which is not received in Malta and on capital gains arising outside Malta to a company which is not ordinarily resident and domiciled in Malta, even if remitted to Malta."

It's a much simpler setup than having an operating company in Malta (good luck in opening a bank account for that company BTW) plus a holding.

 

[A1988]

Then you have nothing to whine about.



Move to Malta and use a resident non-domiciled company.

"Companies which are resident but not domiciled (or vice versa) in Malta are subject to tax in Malta on all income and chargeable gains arising in Malta, and on income arising outside Malta which is remitted back to Malta. No tax is payable on foreign income which is not received in Malta and on capital gains arising outside Malta to a company which is not ordinarily resident and domiciled in Malta, even if remitted to Malta."

It's a much simpler setup than having an operating company in Malta (good luck in opening a bank account for that company BTW) plus a holding.

thanks for taking the time to answer. Well, I have the right to whine cuz its not well written law and can lead to abuse by the authorities or favouritism on who can and cannot get it. Malta is my second preference and I am seriously considering it. Thanks

 

[Don]

This is the definition of what non-domicile is not.

I would not recommend anyone to have their children build their lives in Europe.

Its easy to see negativity but what do you think is a good choice for a westerner, that you would recommend?

 

[JohnnyDoe]

Its easy to see negativity but what do you think is a good choice for a westerner, that you would recommend?

The Caribbean, Central America, most of South America, most of the Pacific, most of Africa, most of Asia, a sailboat. There are so many places where you pay little to no taxes and can do your thing without being bothered.

 

[oldtimer2]

sadly, anything is better than the EU. If you can’t decide on a country, buy a sailboat and travel the world. Your children will be forever grateful.

So far fingers crossed we still find Georgia is okay as a place to locate a tech software business, but we watch the trends very very carefully and have lots of experience to draw on to try and manage any changes that might occur. We pay tax and probably more than we could - but safe to pay a bit more and avoid any tightening noose than pay less and get flagged. However, seems you also want a great place to raise your children - and you are happy with UK climate - and you are looking at the old model of {Malta - UK non-dom + Italy (your current country) + one other}... and you are hoping this structure stays low tax for some years ahead. (Nobody can promise it will. If you want non-dom with less risks of it being abolished then Ireland and IoM are not making any noises about abolishing theirs.) In other threads there is discussion about keeping your structure simple to avoid too many variables that can bring your plans undone.

The idea of living in a nice boat is not new and many people do it . ... including my brother did it with his family. But these days - when there is potentially a _lot_ of tax dollars up for grabs - more countries will want to ask about your tax residency unlike the good old days when boat people could just float around in very low tax or even income tax free bliss. Boat people were amongst the first 'digital nomads'. Everything is a compromise eh .

By IoM I mean capped maximum income tax - not non-dom.

I tend to agree with

The Caribbean, Central America, most of South America, most of the Pacific, most of Africa, most of Asia, a sailboat. There are so many places where you pay little to no taxes and can do your thing without being bothered.

Yep. As JohnnyDee has also said... your children will usually thank you for providing them an international upbringing that exposes them to the realities of life more than an upbringing in a safe place in one high end country that might produce closed minds. There is so much more to life... and exposure to foreign cultures is how it's absorbed.. balanced by how you provide stability for the family / partner / kids, as some kids thrive on adventure and others hate change. Like all of this discussion, it all depends on the fine detail specifics of your own personal circumstances and usually advice can only be generalised.

What is your original country of citizenship? What languages do you and your family speak? Does that open any doors or simplify any choices for you?
When considering non-EU countries, especially those that might appear to be outside your comfort zone, then check if they might be able to fall into your personal comfort zone. (by yours I mean you family's.) For example, do they have large expat communities speaking your language that can ease your pathway into that country and culture? Do they have international schools etc etc (or is home schooling your thing)? It's all the usual relation questions / subjects.

Better to throw the net wide but definitely do explore countries that are not already flagged for harsher tax treatment by the countries you will be sourcing money from. Meaning it will be longer before the trend of higher taxes locally or internationally hit those unflagged countries.

A country can be unflagged for all kinds of reasons. For example, the USA has the political strength to get away with lots. Bulgaria has reducing population (especially of young people) and other issues, so the EU will probably allow Bulgaria to stay low tax for some years ahead. In this regards I will mention Georgia again... not everyone's choice at all, but outside the EU and it is still _off_ everyones grey list and is not considered by any tax authority to be running a zero tax or similar haven. From this "not flagged countries" perspective, georgia is an example of the type of country worth a closer look. If you really want to be close to the EU then Georgia is fairly close... again, it's all about your preferences and balancing them for the best compromise result.

And finally remember some countries will no longer give certain tax advantages (like Malaysia and tax free foreign dividends) if the source funds were not already taxed at least a certain amount - can be 15% for some countries, other countries say "if not taxed at similar rates as we tax that type of income". It's the fine details of your money flows that need to be studied and harsher taxation generally is the trend. So best to keep it in mind and try to start with countries and structures that at least currently are not flagged at all (Malta is certainly flagged but still probably an okay choice for a few years to build wealth and then jump to somewhere else) - and Georgia's also probably okay for a few years to build wealth if done carefully - and so are various other countries in the regions JohnnyDee suggested.
Avoid if possible using special status in countries already under risk of known local or international political and tax pressure to change (such as UK non-dom ). Needing to change countries after a few years by choice is better than jumping because the tax man is chasing or about to come knocking on your door. . Avoid thinking you can choose one low tax place now and it will still be your low tax home for the next 20 years. I aq, keeping an eye on this thread because it's a very common situation - a person or family on the verge of making their financial breakthrough and how to make trend savvy choices to maximise the benefits.

 

[A1988]

So far fingers crossed we still find Georgia is okay as a place to locate a tech software business, but we watch the trends very very carefully and have lots of experience to draw on to try and manage any changes that might occur. We pay tax and probably more than we could - but safe to pay a bit more and avoid any tightening noose than pay less and get flagged. However, seems you also want a great place to raise your children - and you are happy with UK climate - and you are looking at the old model of {Malta - UK non-dom + Italy (your current country) + one other}... and you are hoping this structure stays low tax for some years ahead. (Nobody can promise it will. If you want non-dom with less risks of it being abolished then Ireland and IoM are not making any noises about abolishing theirs.) In other threads there is discussion about keeping your structure simple to avoid too many variables that can bring your plans undone.

The idea of living in a nice boat is not new and many people do it . ... including my brother did it with his family. But these days - when there is potentially a _lot_ of tax dollars up for grabs - more countries will want to ask about your tax residency unlike the good old days when boat people could just float around in very low tax or even income tax free bliss. Boat people were amongst the first 'digital nomads'. Everything is a compromise eh .

By IoM I mean capped maximum income tax - not non-dom.

I tend to agree with

Yep. As JohnnyDee has also said... your children will usually thank you for providing them an international upbringing that exposes them to the realities of life more than an upbringing in a safe place in one high end country that might produce closed minds. There is so much more to life... and exposure to foreign cultures is how it's absorbed.. balanced by how you provide stability for the family / partner / kids, as some kids thrive on adventure and others hate change. Like all of this discussion, it all depends on the fine detail specifics of your own personal circumstances and usually advice can only be generalised.

What is your original country of citizenship? What languages do you and your family speak? Does that open any doors or simplify any choices for you?
When considering non-EU countries, especially those that might appear to be outside your comfort zone, then check if they might be able to fall into your personal comfort zone. (by yours I mean you family's.) For example, do they have large expat communities speaking your language that can ease your pathway into that country and culture? Do they have international schools etc etc (or is home schooling your thing)? It's all the usual relation questions / subjects.

Better to throw the net wide but definitely do explore countries that are not already flagged for harsher tax treatment by the countries you will be sourcing money from. Meaning it will be longer before the trend of higher taxes locally or internationally hit those unflagged countries.

A country can be unflagged for all kinds of reasons. For example, the USA has the political strength to get away with lots. Bulgaria has reducing population (especially of young people) and other issues, so the EU will probably allow Bulgaria to stay low tax for some years ahead. In this regards I will mention Georgia again... not everyone's choice at all, but outside the EU and it is still _off_ everyones grey list and is not considered by any tax authority to be running a zero tax or similar haven. From this "not flagged countries" perspective, georgia is an example of the type of country worth a closer look. If you really want to be close to the EU then Georgia is fairly close... again, it's all about your preferences and balancing them for the best compromise result.

And finally remember some countries will no longer give certain tax advantages (like Malaysia and tax free foreign dividends) if the source funds were not already taxed at least a certain amount - can be 15% for some countries, other countries say "if not taxed at similar rates as we tax that type of income". It's the fine details of your money flows that need to be studied and harsher taxation generally is the trend. So best to keep it in mind and try to start with countries and structures that at least currently are not flagged at all (Malta is certainly flagged but still probably an okay choice for a few years to build wealth and then jump to somewhere else) - and Georgia's also probably okay for a few years to build wealth if done carefully - and so are various other countries in the regions JohnnyDee suggested.
Avoid if possible using special status in countries already under risk of known local or international political and tax pressure to change (such as UK non-dom ). Needing to change countries after a few years by choice is better than jumping because the tax man is chasing or about to come knocking on your door. . Avoid thinking you can choose one low tax place now and it will still be your low tax home for the next 20 years. I aq, keeping an eye on this thread because it's a very common situation - a person or family on the verge of making their financial breakthrough and how to make trend savvy choices to maximise the benefits.

Thankyou for taking the time to share your views and experience. I know people who have used the dutch sandwich and it worked pretty well. Apparently I like the holding company using the participation exemption and keeping the gains or distributing dividends. I am keen to go to malta also cuz of the close proximity but I dont like islands, I come from a very big city unlike my wife. After speaking to lawyers there I think the regime is pretty good and clean, maybe the EU might not let it be for a long time, but at the moment it works. SO, I and my wife will be moving as having a shareholdoing along with 2 other partners in the operating company in malta and our shareholding will be in a holding company in either cyprus, gibralter or estonia which will own our share in the operating company, the maltese company will then pay 35% tax and refund request will be asked by the holding company in either of the 3 places and the gains will be sent back to me in malta tax free. Yes, malta will issue a tax certificate of 35% tax paid and will not question if I bring that money back to malta thru my holding company. Again, me and my wife will build substance for sure, this is pretty clear and verified by a lawyer. NOW, I am not a fan of malta and how small it is but it definitely has a lot of advantages since I can see my business partner in the morning and take a flight and be back by night. Now, for my children I think UK will be better from an education standpoint (me and my wife speak english at home and a bit of italian) but they turn 1 in february so I have another 2-3 years where they go to a proper school. Again, malta non doms have to pay a minimum of 5k euros in tax if you make 35k euros or more, which is not bad.

As far as substance is concerned, I just have 1 business partner in Italy and R&D, one partner is in Asia and I will be out of italy along with my wife too. Again, I spoke to a very experienced tax attorney in Italy and I was told its better to exit Italy thru malta or UK and then maybe leave europe completely cuz these big high tax countries dont like if you leave the EU completely and go to a place like dubai/ bahamas etc which have 0 tax and open cases against you to pay or consider you as a tax resident for 4-5 years. I am already paying a pension to myself without my company making any profits, thats the reality.

I am 34 and a father of 2 and really worried for my kids and sometimes dont sleep overthinking about their future, which is common for my generation. Thankyou for sharing your views.

 

[JohnnyDoe]

Consider Singapore

 

[patterson]

Buddy, nobody screwed up the paperwork, apparently the law is not that clear and straightforward. They want you to show that you moved to Italy "only" to make use of the exemption. I have clarified with one of the best tax advisors in Italy. Unfortunately, my intention was not to use the exemption but to develop my product for commercialization which took me 4 years and now unfortunately I cannot use the exemption.

Interesting. I was looking to use this exemption in a few years and already talked to an Italian lawyer. So to use the exemption, you would need to move to Italy, apply right away and not do anything else?

 

[Mike Forman]

sadly, anything is better than the EU. If you can’t decide on a country, buy a sailboat and travel the world. Your children will be forever grateful.

I do agree anywhere is better than Europe if you value liberty and don't want the government interfere all the time in your life with having for everything a rule and taxation.

Even living in China you felt more free before..although those times have changed.

It's a personal matter and Europe definitely has a lot of nice things to offer, if you don't mind the interference in jour life by the government and if you follow the herd accepting that you should work half of your life full time to pay autorities that make some more ridiculous rules and chase you for any rule you don't follow.

Most people don't realize this and are happy with their lives in Europe. Once you realize that it is not normal that the government dictates you on every aspect in life what to do and you have to give away 2/3rds (tax+social security+vat) of your earnings to them, you get a different view on Europe.

 

[rdec237]

Switzerland would be a good place to consider, especially for an Italian. Easy to incorporate etc. I'm around Zug, the lowest tax canton, can support in a variety of ways if you want to explore

 

[karishi]

Just wanted to bring to everyones notice that my request has been refused for 70-90% exemption in Italy stating "I did not move to italy with the intention to take the 70-90% exemption of income". I was involved in Research and Development activity and finished the R&D in 2023 and moved to italy in 2019. Again, I did not make any income in this period in Italy and now when the time came for commercialization of the product I am stuck with this huge blow. I have my R & D in Italy and a business partner based in Italy, hence I moved.
My present situation is that,

1. I would like to move out of italy without creating any problems or trigerring any issue with the tax authorities.
2.I would like to move to either UK, Ireland, Malta (less preferred0 and take advantage of non dom program also I have 2 kids who would start their preschooling.
3. I would like to know if anyone knows if a structure where I pay 0-5% in corporate tax?
4. I have my business partner and R and D in Italy so daily flights would be a plus, ideally within 2hrs and not more.
5. I am expecting capital gains in the next 3-4 years.

Any suggestion or experience of the situation would be very welcome, I would want to stay in the country permanently and want my children to build their life and network in it, I am not really interested in Middle eastern countries as I have lived there and I feel its not best for my children to be exposed to that lifestyle and specially having daughters. I turn 35 in may this year.

sorry for excessive information, just wanted everyone to know that the regime can come up with any kind of excuses to refuse of accept what suits them or their objectives.

So you are italian and thought it was a good idea to open a company in Italy?Everybody is fleeing from Italy, and I mean the big companies ( Exor, Campari, they are all dutch companies ) but there is still people who think that it's a good idea to open a company in italy and don't get fucked. you are not alone, I have friends which are in similar situation.
I think that Italy is exactly the last country where I would grow up my children, if I had any, but that's a different thing, from a fiscal point of view, there is little info about what this is about.
I mean there are two separate parts, which is your personal income and the company income: if you move yourself out of italy, but all the rest remains in italy, so you have no substance outside of italy, for tax purposes I think that the tax authority could consider the company an Italian company. It depends from a lot of factors, but if you have 1 people of the company in Cyprus and 20 in Italy, it's difficult to say that this is a Cyprus company.
same applies for tax purposes, if you are resident in Cyprus or Malta or Dubai, you can't be in Italy for more than 183 days. But also you can't have the princpal place of your business interests in Italy either, so to make this look believable, you would have to move most of the company outside of italy, have substance somewhere else.
The biggest problem is that the tax authority is watching you, since you applied and where refused, so every move you make will be scrutinized, you are an italian, you know the rules, you should be like a ghost, the longer, the better.
So I think you should get professional advice, there are too many variables, and I am not a professional, but your situation looks complicate. At the end of the day it all depends on how much money you are going to do, how it's structured....
I have friends about your age who did millions working for an Italian company and making money in shares, and they only paid 11% as the company was not a public company and they used a 11% tax for partecipations ( Rivalutazione partecipazioni e terreni 2021, proroga per il versamento dell’imposta sostitutiva. ) but not sure how long it will last

 

[A1988]

Consider Singapore

no thanks, i will stick to italy rather.

Interesting. I was looking to use this exemption in a few years and already talked to an Italian lawyer. So to use the exemption, you would need to move to Italy, apply right away and not do anything else?

no, you should get a rulling from the guardia di finanza (tax authority of italy) before moving or simultaneously. Please do that before.

no thanks, i will stick to italy rather.


no, you should get a rulling from the guardia di finanza (tax authority of italy) before moving or simultaneously. Please do that before.

or agenzia entrate, please speak to a good commercialista in milano. avoid all other regions when it comes to these things in italy.

no thanks, i will stick to italy rather.


no, you should get a rulling from the guardia di finanza (tax authority of italy) before moving or simultaneously. Please do that before.

or agenzia entrate, please speak to a good commercialista in milano. avoid all other regions when it comes to these things.

So you are italian and thought it was a good idea to open a company in Italy?Everybody is fleeing from Italy, and I mean the big companies ( Exor, Campari, they are all dutch companies ) but there is still people who think that it's a good idea to open a company in italy and don't get fucked. you are not alone, I have friends which are in similar situation.
I think that Italy is exactly the last country where I would grow up my children, if I had any, but that's a different thing, from a fiscal point of view, there is little info about what this is about.
I mean there are two separate parts, which is your personal income and the company income: if you move yourself out of italy, but all the rest remains in italy, so you have no substance outside of italy, for tax purposes I think that the tax authority could consider the company an Italian company. It depends from a lot of factors, but if you have 1 people of the company in Cyprus and 20 in Italy, it's difficult to say that this is a Cyprus company.
same applies for tax purposes, if you are resident in Cyprus or Malta or Dubai, you can't be in Italy for more than 183 days. But also you can't have the princpal place of your business interests in Italy either, so to make this look believable, you would have to move most of the company outside of italy, have substance somewhere else.
The biggest problem is that the tax authority is watching you, since you applied and where refused, so every move you make will be scrutinized, you are an italian, you know the rules, you should be like a ghost, the longer, the better.
So I think you should get professional advice, there are too many variables, and I am not a professional, but your situation looks complicate. At the end of the day it all depends on how much money you are going to do, how it's structured....
I have friends about your age who did millions working for an Italian company and making money in shares, and they only paid 11% as the company was not a public company and they used a 11% tax for partecipations ( Rivalutazione partecipazioni e terreni 2021, proroga per il versamento dell’imposta sostitutiva. ) but not sure how long it will last

Thankyou for taking the time to share your view, well I did not have any other option than forming the R & D company in italy due to my business partners. I have spoken to one of the best lawyers in Italy and they have suggested dutch holding company to own the production company in italy and claim participation exemption when we sell the company which would take another 4-5 years maybe but not less than 3 for sure. I will have to move out of italy with my wife and kids very soon before I form the dutch holding. I am mostly moving to malta, its close and very very tax friendly plus cost of living is not out of the roof like switzerland and dubai, I am sure i will be able to make and keep some cash with me. The problem with good lawyers is that they offered me another new option, I can claim 90% income exemption as a researcher for 11 or 13 years if I have 2 minor kids which I do and an R and D company which I also do, it depends on me but still capital gains will be taxed at 26%. And btw, I am not italian ( I might take the italian passport thru my wife who is italian) but thats it. I am of asian descent. lets not get in to those details as its irrelevant. But yes, I am standing out too much in Italy which I dont like.

Switzerland would be a good place to consider, especially for an Italian. Easy to incorporate etc. I'm around Zug, the lowest tax canton, can support in a variety of ways if you want to explore

good option but cost of living is ridiculous in switzerland. I would use their banking for sure.

I do agree anywhere is better than Europe if you value liberty and don't want the government interfere all the time in your life with having for everything a rule and taxation.

Even living in China you felt more free before..although those times have changed.

It's a personal matter and Europe definitely has a lot of nice things to offer, if you don't mind the interference in jour life by the government and if you follow the herd accepting that you should work half of your life full time to pay autorities that make some more ridiculous rules and chase you for any rule you don't follow.

Most people don't realize this and are happy with their lives in Europe. Once you realize that it is not normal that the government dictates you on every aspect in life what to do and you have to give away 2/3rds (tax+social security+vat) of your earnings to them, you get a different view on Europe.

I think europe still is best overall for a lot of things than 1, I can criticise almost any country in the world, no place is perfect. Yes taxes are high but you will not find a more civilised place in the world with high quality of life and less poverty.

 

[karishi]

I think europe still is best overall for a lot of things than 1, I can criticise almost any country in the world, no place is perfect. Yes taxes are high but you will not find a more civilised place in the world with high quality of life and less poverty.

Europe has some very good implementation of Welfare state, but that doesn't apply to Italy, where nothing works. All the anglo saxon countries + France are good place to live if you like a working welfare state. Spain is so and so but it's much better than Italy, and Italy and Greece are where you go to f**k the system. At the end of the day I totally agree with you that no place is perfect, you just have to understand what each country has to offer and what are the trade offs. I don't want kids, I don't believe in welfare, I don't believe that justice is fair, so I live in Dubai, and just go to europe as a tourist.
Anyway, back to topic, the last offer didn't sound so bad, 26% on capital gain is not unreasonable. At the end of the day, look at what remains in your pocket and not at what you are leaving on the table. If you bring home 3 or 30 millions and leave 1 or 10 on the table, at the end is not so bad. I mean, beside the money, take into consideration where would you want to live long term and grow your kids. If for some strange reason that I can't understand, the answer is Italy, that deal is not so bad.

 

[A1988]

Switzerland would be a good place to consider, especially for an Italian. Easy to incorporate etc. I'm around Zug, the lowest tax canton, can support in a variety of ways if you want to explore

how much are we talking in terms of corporate and personal tax? and capital gains?

Europe has some very good implementation of Welfare state, but that doesn't apply to Italy, where nothing works. All the anglo saxon countries + France are good place to live if you like a working welfare state. Spain is so and so but it's much better than Italy, and Italy and Greece are where you go to f**k the system. At the end of the day I totally agree with you that no place is perfect, you just have to understand what each country has to offer and what are the trade offs. I don't want kids, I don't believe in welfare, I don't believe that justice is fair, so I live in Dubai, and just go to europe as a tourist.
Anyway, back to topic, the last offer didn't sound so bad, 26% on capital gain is not unreasonable. At the end of the day, look at what remains in your pocket and not at what you are leaving on the table. If you bring home 3 or 30 millions and leave 1 or 10 on the table, at the end is not so bad. I mean, beside the money, take into consideration where would you want to live long term and grow your kids. If for some strange reason that I can't understand, the answer is Italy, that deal is not so bad.

no I am not thinking of being in italy long term, I have achieved what I wanted to achieve in Italy and now is the time to exit for me i think. I am looking at making around 5m-8m euros approx in cap gains and 26% is quite high considering my expenses are 50k a year all inclusive, its like 20 years of expenses gone in taxes for me if I end up making 5mil.

 

[ExpatCyprus]

Hi! I'm Italian and currently living in Cyprus as a non-dom. I own a small online business and the set-up is pretty simple with an LTD company incorporated here.
Taxes: 12,5% on profits, 0% on dividends plus 2,65% social insurance. If you have to pay yourself a small salary you enjoy a no-tax area up to 19,5K (you will pay social contributions though, a bit over 30% but the minimum salary is 500 Euro, so...).
There are good international schools, good food and the weather is lovely throughout the year. Decent and inexpensive health care too cause there are plenty of retired people who moved here from northern Europe.
I am in Paphos area and there are direct flights to anywhere in Italy March to October, to BGY and FCO during the "winter". It's a Ryanair 3 hours flight, cheap and effective.
The non-dom status requires that you have a place to live available all year round and spend at least 60 calendar days a year on the island. It lasts for 17 years and you can pause it should you move out of Cyprus and resume it once you are back.

I'd say this solution meets most of your requirements. Depending on where you decide to live you'll find city life, country life, beach life... there's a bit of everything and it's not a huge shock for someone used to living in Italy. Everything is close and you drive from one end of the island to the other in less than 3 hours.
The cost of living varies a lot, Limassol can get pretty expensive, while anywhere a few KM out of any city is like the south of Italy.
In my area, you could rent a modern 3 bed 2 bath villa with a private pool for 1.500-2.000 Euro, a decent 2 bed flat in a complex for 800-1.000... now many Russians are flowing in and long term rentals are going up, but it's still affordable.
As you would expect in a small island, locals are sometimes not exactly modern and open-minded, but there's a large international community. And very few Italians, which I personally like.
Well, get in touch if you want to know more, I'll happily share my personal experience.

Cheers!
Ric

 

[A1988]

Hi! I'm Italian and currently living in Cyprus as a non-dom. I own a small online business and the set-up is pretty simple with an LTD company incorporated here.
Taxes: 12,5% on profits, 0% on dividends plus 2,65% social insurance. If you have to pay yourself a small salary you enjoy a no-tax area up to 19,5K (you will pay social contributions though, a bit over 30% but the minimum salary is 500 Euro, so...).
There are good international schools, good food and the weather is lovely throughout the year. Decent and inexpensive health care too cause there are plenty of retired people who moved here from northern Europe.
I am in Paphos area and there are direct flights to anywhere in Italy March to October, to BGY and FCO during the "winter". It's a Ryanair 3 hours flight, cheap and effective.
The non-dom status requires that you have a place to live available all year round and spend at least 60 calendar days a year on the island. It lasts for 17 years and you can pause it should you move out of Cyprus and resume it once you are back.

I'd say this solution meets most of your requirements. Depending on where you decide to live you'll find city life, country life, beach life... there's a bit of everything and it's not a huge shock for someone used to living in Italy. Everything is close and you drive from one end of the island to the other in less than 3 hours.
The cost of living varies a lot, Limassol can get pretty expensive, while anywhere a few KM out of any city is like the south of Italy.
In my area, you could rent a modern 3 bed 2 bath villa with a private pool for 1.500-2.000 Euro, a decent 2 bed flat in a complex for 800-1.000... now many Russians are flowing in and long term rentals are going up, but it's still affordable.
As you would expect in a small island, locals are sometimes not exactly modern and open-minded, but there's a large international community. And very few Italians, which I personally like.
Well, get in touch if you want to know more, I'll happily share my personal experience.

Cheers!
Ric

thanks for taking the time to share your experience about cyprus, well it looks pretty attractive, whats the catch? I am currently in malta and quite impressed by the weather and people, meeting some lawyers tomorrow to see if a structure can be worked out. My business will probably net 1m - 5m a year approx but my problem is capital gains, I am expecting roughly in the range of 5-10m euros in 5 years. What are the conditions of non-dom in cyprus? In malta there is a minimum 5k euros needed to be paid if above 35k euros a year. What about banking in cyprus? I am hearing in malta its difficult again the lawyers or accountants never give the correct picture or I will not take their word for it. Is english the official language in cyprus? Is it more expensive than malta? how does the social security contributions and 2.65% social insurance work? I am also considering holland which allows participation exemption for holding companies and 5 year non resident status with 30% exemption from income.

 

[Don]

thanks for taking the time to share your experience about cyprus, well it looks pretty attractive, whats the catch? I am currently in malta and quite impressed by the weather and people, meeting some lawyers tomorrow to see if a structure can be worked out. My business will probably net 1m - 5m a year approx but my problem is capital gains, I am expecting roughly in the range of 5-10m euros in 5 years. What are the conditions of non-dom in cyprus? In malta there is a minimum 5k euros needed to be paid if above 35k euros a year. What about banking in cyprus? I am hearing in malta its difficult again the lawyers or accountants never give the correct picture or I will not take their word for it. Is english the official language in cyprus? Is it more expensive than malta? how does the social security contributions and 2.65% social insurance work? I am also considering holland which allows participation exemption for holding companies and 5 year non resident status with 30% exemption from income.

You can also check estonia-malta fiscal unit structure, with effective 5% tax, and indefinite tax deferral. Adding Cyprus or UAE holding in the mix would probably not hurt either. Perhaps you dont need EU structure at all?
Maybe keep personal tax residency in Cyprus or UAE to avoid further tax on dividends, depending on where you don't mind staying for minimum ~90 days/year.

 

[A1988]

You can also check estonia-malta fiscal unit structure, with effective 5% tax, and indefinite tax deferral. Adding Cyprus or UAE holding in the mix would probably not hurt either. Perhaps you dont need EU structure at all?
Maybe keep personal tax residency in Cyprus or UAE to avoid further tax on dividends, depending on where you don't mind staying for minimum ~90 days/year.

considering cyprus as an option, I am avoiding UAE for now but I do have second residency there and a company. I dont want my kids to be exposed to UAE, holland offers a very good holding company regime which I am seriously considering. Malta seems to be a good option but their non dom comes with CFC and permanent establishment issues which I dont want.

You can also check estonia-malta fiscal unit structure, with effective 5% tax, and indefinite tax deferral. Adding Cyprus or UAE holding in the mix would probably not hurt either. Perhaps you dont need EU structure at all?
Maybe keep personal tax residency in Cyprus or UAE to avoid further tax on dividends, depending on where you don't mind staying for minimum ~90 days/year.

I am meeting some more lawyers tomorrow and will update with more useful information about malta, appreciate your inputs.

 

[ExpatCyprus]

thanks for taking the time to share your experience about cyprus, well it looks pretty attractive, whats the catch? I am currently in malta and quite impressed by the weather and people, meeting some lawyers tomorrow to see if a structure can be worked out.

I didn't like Malta's atmosphere in general (personal opinion ofc), and most of all they don't offer the "minimum 60 days" option to be a non-dom resident if I well remember. But I didn't investigate a lot since I didn't want to settle there anyway.

My business will probably net 1m - 5m a year approx but my problem is capital gains, I am expecting roughly in the range of 5-10m euros in 5 years. What are the conditions of non-dom in cyprus? In malta there is a minimum 5k euros needed to be paid if above 35k euros a year.

As far as I know, capital gains are not subject to any taxation for a non-dom in Cyprus, no limit. I am a much smaller fish than you so I didn't look into the 6 digits range, but I have never bumped into anything like a threshold when searching.

What about banking in cyprus? I am hearing in malta its difficult again the lawyers or accountants never give the correct picture or I will not take their word for it.

Well, personal experience: banks are SLOW. I managed to open with the Bank of Cyprus in 4 weeks after sending them every imaginable document. They are ok but if you end up classified as an "International Business" they will charge quite a lot. I switched to Revolut which became available again months ago and it's fine for my small transactions. I heard good things about Hellenic bank too.

Is english the official language in cyprus?

It is, as a former British colony English is spoken everywhere from public offices to the kiosks selling their fruit and vegs

Is it more expensive than malta?

I was in Malta several times only as a tourist so I can't compare. I can tell you that Cyprus' cost of living changes dramatically depending on where you want to be, as I said. Renting or buying property in Limassol can be more expensive than in Milano, while the countryside can be cheaper than any small village in Sicily. Cars are more expensive but insurance and property tax are way cheaper than in Italy. Gas is much cheaper (Petrol <1,4 Euro now), but... you don't really need a fancy car unless you especially like it. It's fun to have a 4x4 cause you can drive anywhere no limits, and it's fun exploring.
Local food is super cheap and often "Km 0", imported goods are more expensive than back home.
Internet is very expensive both home and mobile but we are used to super cheap prices in Italy. I am doing good with my Italian SIM and the roaming because I am travelling back and forth all the time and my fiber at home is included in the rental.
Don't expect anything like "Amazon Prime" though, life runs slower... but personally I enjoy a much more relaxed lifestyle than in Moscow where I used to live. I see this as an advantage.
If you are going to make millions as you say, I wouldn't bother about the cost of living in either Malta or Cyprus honestly.

how does the social security contributions and 2.65% social insurance work? I am also considering holland which allows participation exemption for holding companies and 5 year non resident status with 30% exemption from income.

You pay 2,65% (GESY) on both dividends and salary. This lets you use the local health system which is not bad at all and rather inexpensive.
You pay social contributions (pension) on salary only, that's why I gave myself the lowest possible salary and use the dividends whenever I need cash. You can extract dividends at any time during the year.
I found a good tax advisor too, they are an average-sized firm of approx 20 people, very competent and always available to help. Nice people I must say. But again my needs are quite basic, nothing fancy or problematic.