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.

 

[ilpablo]

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.

Hi Marzio, can you please explain a bit more about this?
Would a Self Sufficient Residency and an LTD Uk meet this condition?

 

[Marzio]

Would a Self Sufficient Residency and an LTD Uk meet this condition?

I'd say it's perfectly fine but verify this with a Maltese lawyer.

 

[karishi]

Just a remainder: remember to severe all ties correctly with Italy, so:
- remove residency there
- no kids or wifw
- no place on the board of any italian company

But given the money involved I see that you are doing things properly. good luck and good job!

 

[A1988]

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.



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.



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.



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



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.


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.

Thanks for the response, I am seriously considering cyprus too as an option, but with my meeting with a lawyer in malta today I was very impressed, apparently I can end up paying 0% if I pay myself dividends thru a scottish llp. The structure was simple. Corporate tax can be brought down to 2-3% with patent derived income which I have with generous deductions

Just a remainder: remember to severe all ties correctly with Italy, so:
- remove residency there
- no kids or wifw
- no place on the board of any italian company

But given the money involved I see that you are doing things properly. good luck and good job!

thankyou, I am trying my best and also sharing my experience of the process, hope it helps someone who is in a similar boat

Just an update with my meeting with a law firm in malta today, apparently I was offered a 3 tier structure where I pay 2-3% corporate tax with generous deductions and 0% if I pay myself dividends, no limits. Yes the structure is not cheap and maintainence is expensive, approx 10k a year, but still my effective rate is very very low. A trading company with a holding company in malta and finally a scottish lp which would pay me dividends which would be tax free in malta.

Another option proposed was, I move my residency to malta with my wife and kids, have a trading company or a holding company which invests abroad or holds interests and I pay flat 5k tax as non dom and there will be no questions asked on how much money I make or have abroad.

Another important thing mentioned in the meeting was, how easy it is to hire europeans or non europeans in malta and social security contributions are flat 180 euros a month which is quite low plus availability of unskilled and skilled labour at reasonable wages.

Lastly, I discussed bank accounts and how I have heard people having issues with opening bank accounts, I was told that they can refer me some people whom they work with and I dont have to worry too much because I have substance in malta, like my business, residency, family and all vital interests, which makes me 99% eligible without any hassles, but still they said if nothing works in malta they have contacts in switzerland who can open business and personal accounts and it doesnt change anything.

I am still confused between holland, cyprus and malta but malta is looking very attractive for a lot of reasons and reasonable taxation.

If anyone has any ideas or would like to share their experience with me or share their opinion on things that I mentioned I will be happy to discuss.

 

[ExpatCyprus]

Thanks for the response, I am seriously considering cyprus too as an option, but with my meeting with a lawyer in malta today I was very impressed, apparently I can end up paying 0% if I pay myself dividends thru a scottish llp. The structure was simple. Corporate tax can be brought down to 2-3% with patent derived income which I have with generous deductions


thankyou, I am trying my best and also sharing my experience of the process, hope it helps someone who is in a similar boat

Just an update with my meeting with a law firm in malta today, apparently I was offered a 3 tier structure where I pay 2-3% corporate tax with generous deductions and 0% if I pay myself dividends, no limits. Yes the structure is not cheap and maintainence is expensive, approx 10k a year, but still my effective rate is very very low. A trading company with a holding company in malta and finally a scottish lp which would pay me dividends which would be tax free in malta.

Another option proposed was, I move my residency to malta with my wife and kids, have a trading company or a holding company which invests abroad or holds interests and I pay flat 5k tax as non dom and there will be no questions asked on how much money I make or have abroad.

Another important thing mentioned in the meeting was, how easy it is to hire europeans or non europeans in malta and social security contributions are flat 180 euros a month which is quite low plus availability of unskilled and skilled labour at reasonable wages.

Lastly, I discussed bank accounts and how I have heard people having issues with opening bank accounts, I was told that they can refer me some people whom they work with and I dont have to worry too much because I have substance in malta, like my business, residency, family and all vital interests, which makes me 99% eligible without any hassles, but still they said if nothing works in malta they have contacts in switzerland who can open business and personal accounts and it doesnt change anything.

I am still confused between holland, cyprus and malta but malta is looking very attractive for a lot of reasons and reasonable taxation.

If anyone has any ideas or would like to share their experience with me or share their opinion on things that I mentioned I will be happy to discuss.

Sounds like you are doing a great job and have viable options. If I can, just make sure Malta is a place where you would happily spend most or a significant part of your time. I really had mixed feelings and saw many things I didn't like there. I know we are all different, but still...
I think this is even more important than finding the best possible set-up tax-wise, it's where you and your family will be spending time, make sure you have a look around with the eye of someone who is moving if you know what I mean.
It seems you guys will be able to afford a full life, just choose a place which allows you to enjoy what you like

 

[A1988]

Sounds like you are doing a great job and have viable options. If I can, just make sure Malta is a place where you would happily spend most or a significant part of your time. I really had mixed feelings and saw many things I didn't like there. I know we are all different, but still...
I think this is even more important than finding the best possible set-up tax-wise, it's where you and your family will be spending time, make sure you have a look around with the eye of someone who is moving if you know what I mean.
It seems you guys will be able to afford a full life, just choose a place which allows you to enjoy what you like

Actually you are completely right, malta is very small and I still dont know if I can spend the rest of my life in malta or if I would even enjoy living in malta. But, if I go I will be going with a clear aim of getting my work done and achieving my objective. Not rulling out cyprus yet. As they say "never say NEVER".

 

[Marzio]

Just an update with my meeting with a law firm in malta today, apparently I was offered a 3 tier structure where I pay 2-3% corporate tax with generous deductions and 0% if I pay myself dividends, no limits. Yes the structure is not cheap and maintainence is expensive, approx 10k a year, but still my effective rate is very very low. A trading company with a holding company in malta and finally a scottish lp which would pay me dividends which would be tax free in malta.

Another option proposed was, I move my residency to malta with my wife and kids, have a trading company or a holding company which invests abroad or holds interests and I pay flat 5k tax as non dom and there will be no questions asked on how much money I make or have abroad.

I wonder why they didn't tell you about using a resident non-domicile company while paying 5K flat tax as a non dom.

Wait, maybe because they don't earn anything by suggesting that structure? LOL

The most surprising thing is knowing that a SLP will pay dividends, i wonder how would that work since a limited partnership can't distribute dividends but business profits.

 

[CALAY]

You are in the typical situation where a successful entrepreneur is trying DIY solutions for a complex problem…
Respectfully get a very good lawyer (and not someone desperate to sell you a company incorporation) to draft a plan and concentrate on growing your business, trying to do it yourself might look cheaper from far away, but 99% of the time it's either non-compliant or not sustainable...

At CALAY Banking™ we only advise on banking & compliance issues but we often collaborate with this guy: TAX LAWYER OF THE YEAR and he’s seriously creative.
Drop me a DM and I’ll arrange for you an appointment with him (they don’t accept new clients if not introduced by another professional).

 

[A1988]

I wonder why they didn't tell you about using a resident non-domicile company while paying 5K flat tax as a non dom.

Wait, maybe because they don't earn anything by suggesting that structure? LOL

The most surprising thing is knowing that a SLP will pay dividends, i wonder how would that work since a limited partnership can't distribute dividends but business profits.

Thanks marzio for your input. I have sent him an email about this structure and also some of my other doubts. Maybe he didnt suggest this structure cuz 2 of my other partners are in italy and asia. If the company becomes domicile in those countries then it will be a big problem, I havent read the treaties between malta and those countries but since I am willing to move to malta with my family, hire staff who are actually working and have a strong substance in malta why would I want a non domicile company? I am also getting patent box benefit where I actually get 95% deduction so technically I am paying 5% of 5% as taxes after deductions, I dont want to crib about my lawyer making more money and selling multiple structures etc.

As far as SLP is concerned, isnt it distributing business profits as dividends to me? or am I missing something?

Sometimes its better to keep people happy who work with you in my opinion

You are in the typical situation where a successful entrepreneur is trying DIY solutions for a complex problem…
Respectfully get a very good lawyer (and not someone desperate to sell you a company incorporation) to draft a plan and concentrate on growing your business, trying to do it yourself might look cheaper from far away, but 99% of the time it's either non-compliant or not sustainable...

At CALAY Banking™ we only advise on banking & compliance issues but we often collaborate with this guy: TAX LAWYER OF THE YEAR and he’s seriously creative.
Drop me a DM and I’ll arrange for you an appointment with him (they don’t accept new clients if not introduced by another professional).

Thanks for the offer, what do you do exactly? What is calay banking? is it a swiss bank?

 

[Marzio]

If the company becomes domicile in those countries then it will be a big problem

You are mixing together different concepts.

Domicile and residency aren't synonyms.

A company resident non domicile means a company that was incorporated offshore but resident in Malta.

If a company is resident in Malta because is managed from Malta can't be resident anywhere else if the other 2 partners act like silent partners and don't actively manage the company.

As far as SLP is concerned, isnt it distributing business profits as dividends to me?

Only capital companies can distribute dividends

 

[A1988]

You are mixing together different concepts.

Domicile and residency aren't synonyms.

A company resident non domicile means a company that was incorporated offshore but resident in Malta.

If a company is resident in Malta because is managed from Malta can't be resident anywhere else if the other 2 partners act like silent partners and don't actively manage the company.



Only capital companies can distribute dividends

thanks, I will take this up with my lawyer. It would be perfect for us if we can utilise holland or luxemburg in the structure, just so that it gives a great reputation to the company and also patents are more safe in these jurisdictions and have good standing globally.

 

[CALAY]

Thanks for the offer, what do you do exactly? What is calay banking? is it a swiss bank?

Nope, we’re purely INTRODUCERS.
CALAY Banking™ is NOT a bank, nor does it provides banking services.
Some of the other professionals on this forum will remember it by its previous name, FBS Banking.
CALAY LTD offers international bank/broker introductory services and account opening assistance, corporate administration introduction services.
We spend most of our time ensuring that any use of a bank will be able to last in time.
Too often entrepreneurs are setting up solutions that get quickly blocked and end up with blocked funds and spending a LOT of time dealing with the issue.

We avoid that by either directing you to an institution we believe will serve your needs or to a third-party professional to completely review and correct your setup so you can concentrate on making money, not dealing with compliance…

We also constantly monitor banks so when we feel a bank / EMI is posing a risk we advise our clients to switch. Having been in existence since 1997, we lived through a lot of bank failures, the latest being EPB, a bank we advised urgently leaving already back in August 2021…

You are mixing together different concepts.
Domicile and residency aren't synonyms.
A company resident non domicile means a company that was incorporated offshore but resident in Malta.
If a company is resident in Malta because is managed from Malta can't be resident anywhere else if the other 2 partners act like silent partners and don't actively manage the company.

Only capital companies can distribute dividends

I agree with Marzio 100%.
There is:

-What you think you can do
(Google is your worst enemy, closely followed by lots of unscrupulous paper companies shops that will be very eager to tell you what you want to hear)

-The reality of the complexity of the laws
(as illustrated by Marzio, the real place of establishment of ANY legal entity is NOT defined by it’s place of incorporation but by it’s place of MANAGEMENT)

-and Finally, the ‘real life' test of being able to implement it
(even if your setup is 100% legal and compliant, it doesn’t mean that you’ll be able to open/maintain all the accounts needed for the setup to work and for your financial interest to be safeguarded)

Your problem is not very complex, but there are so many traps and pitfalls it can cost you dearly.
They are plenty of very experienced professionals here, best advice is to appoint one to do all the due diligence and pave the way to your financial freedom.

 

[A1988]

You are mixing together different concepts.

Domicile and residency aren't synonyms.

A company resident non domicile means a company that was incorporated offshore but resident in Malta.

If a company is resident in Malta because is managed from Malta can't be resident anywhere else if the other 2 partners act like silent partners and don't actively manage the company.



Only capital companies can distribute dividends

Thanks for suggesting non domicile company, you saved me thousands of euros in maintainence cost, i dont know how to thank you for that suggestion, I am really grateful really. I thought I was the smartest, but I am NOT . If you know a very good law firm who is not greedy then please let me know, seems like I was in wrong company.

Nope, we’re purely INTRODUCERS.
CALAY Banking™ is NOT a bank, nor does it provides banking services.
Some of the other professionals on this forum will remember it by its previous name, FBS Banking.
CALAY LTD offers international bank/broker introductory services and account opening assistance, corporate administration introduction services.
We spend most of our time ensuring that any use of a bank will be able to last in time.
Too often entrepreneurs are setting up solutions that get quickly blocked and end up with blocked funds and spending a LOT of time dealing with the issue.

We avoid that by either directing you to an institution we believe will serve your needs or to a third-party professional to completely review and correct your setup so you can concentrate on making money, not dealing with compliance…

We also constantly monitor banks so when we feel a bank / EMI is posing a risk we advise our clients to switch. Having been in existence since 1997, we lived through a lot of bank failures, the latest being EPB, a bank we advised urgently leaving already back in August 2021…




I agree with Marzio 100%.
There is:

-What you think you can do
(Google is your worst enemy, closely followed by lots of unscrupulous paper companies shops that will be very eager to tell you what you want to hear)

-The reality of the complexity of the laws
(as illustrated by Marzio, the real place of establishment of ANY legal entity is NOT defined by it’s place of incorporation but by it’s place of MANAGEMENT)

-and Finally, the ‘real life' test of being able to implement it
(even if your setup is 100% legal and compliant, it doesn’t mean that you’ll be able to open/maintain all the accounts needed for the setup to work and for your financial interest to be safeguarded)

Your problem is not very complex, but there are so many traps and pitfalls it can cost you dearly.
They are plenty of very experienced professionals here, best advice is to appoint one to do all the due diligence and pave the way to your financial freedom.

Thanks for taking the time to write, I am most likely looking to start a non dom company in malta, I want to know if you can offer bank accounts in switzerland and singapore for a maltese non dom company? or which jurisdictions you suggest? How much do you charge? and the timelines?

Just upgraded my account as I didnt wanted to be a freeloader and wanted to support the community and offshore corp as it has been an amazing resource. Thankyou.

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.

I have contacted this law firm (the one in the link), hopefully they give me good advise and optimisation on capital gains and income.

 

[CALAY]

I want to know if you can offer bank accounts in switzerland and singapore for a maltese non dom company? or which jurisdictions you suggest? How much do you charge? and the timelines?

That's the trouble you will face:
A Maltese non-dom company is very unlikely to offer the level of compliance required by a Swiss bank.
As discussed earlier, even with the company registered in Malta, banks will want to know WHO runs it and how?
So if it's you running it from your country of tax residence, the company is technically subject to taxation in that country. No serious bank will onboard you because they can be accused at a later stage to be complicit in tax evasion.
That's why you need a good lawyer to anticipate those details even before incorporating anything anywhere.

For the banks to be able to onboard you without risking their reputation, they'll have to spend time and man-hours building a strong case on your behalf.
They will only do that IF they are financially incentivised to do so.
Giving them a mandate on wealth management is a good way to achieve this, but in Switzerland that will be a minimum of €1M under management.

We'll gladly help you choose the right banking partner, but right now you don't have a bank issue, you have a compliance issue.

I have contacted this law firm (the one in the link), hopefully they give me good advise and optimisation on capital gains and income.

I'm afraid they will not take you on as a client directly.
They require a professional introduction (your current lawyer/accountant for example, or professionals like ourselves).

I can draft an introduction letter for you, I would need to have a free 30mins zoom meeting with you to get all the information correct so I pass on a neat file to the Lawyers.
You can use the chatbot on our website to get access to our online calendar.

 

[Marzio]

Thanks for suggesting non domicile company, you saved me thousands of euros in maintainence cost, i dont know how to thank you for that suggestion, I am really grateful really.

I have contacted this law firm (the one in the link), hopefully they give me good advise and optimisation on capital gains and income.

Please report your experience with them!

 

[A1988]

Please report your experience with them!

Sure I will, btw if you are in malta, BEERS on me......

Sure I will, btw if you are in malta, BEERS on me......

Just an update, i am currently in dubai with my wife and kids and my wife is equally liking dubai with malta, i am in dubai to avoid the winter of italy for a month and then I return, hopefully I dont end up changing my mind on malta.....

 

[A1988]

UPDATE - Going back to italy and planning to spend some time in malta after that, I considered Dubai as an option too but i guess malta fits my situation much better, i will however maintain my residency in dubai if god forbit another coronavirus situation happens in europe. I have a feeling that dubai might introduce personal income taxation starting from 5-10%, either way i pay less income and personal taxation in malta plus it has lower cost of living plus its closer to italy.

Also, dubai introducing 9% corporate taxation has been a big turn off for me. I will be going to malta and looking for houses soon to spend sometime, hopefully i dont get too bored of the island, any suggestions or personal experience of anyone living or have lived in malta would be welcome.

 

[Konstanz]

why you think Dubai would introduce personal income tax?
Many people would just leave Dubai in such case

 

[A1988]

why you think Dubai would introduce personal income tax?
Many people would just leave Dubai in such case

People were going to leave when they intrioduced vat at 5% and corporate tax at 9% but guess what, the uncertainty and political turmoil in most of the developed and developing world has made dubai the magnet of the rich, no crime, cheap labour, good connectivity and low taxes.

The writing is on the wall, sooner or later there will be personal income tax with generous deductions or maybe starting with territorial taxation, thats how they do it, they will try to milk as much as they can till the end.

Either way, I not considering dubai for my business, I can structure it in such a way that neither my taxes or cost of living is higher than dubai.

 

[A1988]

why you think Dubai would introduce personal income tax?
Many people would just leave Dubai in such case

You have to give me some credit for my intuition about dubai and them introducing personal income tax.

Anyways, just an update I am not moving to malta as its too small for me. Cyprus holding company is still in consideration. I am considering spain now with the beckham law to save on capital gains tax on the sale of my company / patents. Any experience or knowledge idea about the beckham law would be helpful. Again, my company and holdings will all be outside of spain.

Again I know and understand its foolish and stupid to move to spain to save on taxes but I think the beckham law is fantastic tool to be a resident of spain but still not a resident and enjoy amazing weather and lifestyle. I am considering living in marbella or malaga. I can consider gibraltee holding company or cyprus holding company with beckham law. I would be glad to hear ideas and opinions.