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Relocation to Portugal? Or maybe Malta or Andorra?
- Thread starter blast629
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I think you should speak to some advisors from Portugal.
At least with NHR 1.0, they would set up a company for you in Malta or Cyprus and then you would be living off "dividends". This seemed to be working well.
I'm sure they have similar ready-made setups for NHR 2.0, even if you have to pay some local tax for on your local "salary".
At least with NHR 1.0, they would set up a company for you in Malta or Cyprus and then you would be living off "dividends". This seemed to be working well.
I'm sure they have similar ready-made setups for NHR 2.0, even if you have to pay some local tax for on your local "salary".
1. Your income is low(ish), but given your age, I applaud your initiative.
2. Offshore company setups require 2 things; an affordable jurisdiction (taxes/fees) and a forgiving residence jurisdiction (where you live doesn't tax your foreign company). If you have the second, then a UK Company is reasonably cheap to setup and operate and the tax levels are low (if you are/have a decent accountant)
3. The other issue is your personal taxes. To hit that on the head you need a tax free residence that becomes your "taxable residence" and then you can't be anywhere else for more than 182 days of the year. Find a tax haven where you can get residency cheaply. Setup personally there. Keep your Spain residence and maybe get a Portuguese residence. On paper "move" to the tax haven. (Most only require you to be there 1 week or less a year). Then split your year between Spain and Portugal. You now have a 0% personal tax profile. With a zero tax profile, you now can run your business as a not-for-profit (pay your "staff" everything, after other expenses), so it's jurisdiction is less important.
2. Offshore company setups require 2 things; an affordable jurisdiction (taxes/fees) and a forgiving residence jurisdiction (where you live doesn't tax your foreign company). If you have the second, then a UK Company is reasonably cheap to setup and operate and the tax levels are low (if you are/have a decent accountant)
3. The other issue is your personal taxes. To hit that on the head you need a tax free residence that becomes your "taxable residence" and then you can't be anywhere else for more than 182 days of the year. Find a tax haven where you can get residency cheaply. Setup personally there. Keep your Spain residence and maybe get a Portuguese residence. On paper "move" to the tax haven. (Most only require you to be there 1 week or less a year). Then split your year between Spain and Portugal. You now have a 0% personal tax profile. With a zero tax profile, you now can run your business as a not-for-profit (pay your "staff" everything, after other expenses), so it's jurisdiction is less important.
Spend 10 days per year on vacation in the Seychelles or some other tax-free place, then live 177 days per year in Spain and 177 days in Portugal and pay tax in the Seychelles?
And even keep the Spanish residency?
This is not how it works. You also can't pay out 100% of the profits as a salary in most cases if the company is taxable in a high-tax country.
You clearly have no ideas of how taxes work.
Rule 1: GTFO out of Spain
Rule 2: Read rule #1
With 80k you don't have many options as all these setups will eat a big portion of that income.
Doable things are the cheap places like Bulgaria or Montenegro (or Georgia) but you would have to actually move there.
All other setups like Cyprus or Malta would be very expensive for you at that level. They are maybe good places to plan for the future, but right now it might be too expensive.
Rule 2: Read rule #1
With 80k you don't have many options as all these setups will eat a big portion of that income.
Doable things are the cheap places like Bulgaria or Montenegro (or Georgia) but you would have to actually move there.
All other setups like Cyprus or Malta would be very expensive for you at that level. They are maybe good places to plan for the future, but right now it might be too expensive.
Hi, why not live in the Algarve, close to Spain, like in Tavira, only a few minutes from the border?
I was told by the international tax advisors in Tavira, that one can have a Portuguese company, and be taxed "as a personal company transparently" by only 20% (Under NHR) for the income you earn. No social on that. There are articles in Portuguese that confirm that way of taxation that is an option in Portugal, the company to be tax transparent.
The caveat is that you need to pay yourself also a minimum wage salary as you are the director.
It seems much simpler than doing offshore etc for just 100k income, and 100% legal and proper.
I was told by the international tax advisors in Tavira, that one can have a Portuguese company, and be taxed "as a personal company transparently" by only 20% (Under NHR) for the income you earn. No social on that. There are articles in Portuguese that confirm that way of taxation that is an option in Portugal, the company to be tax transparent.
The caveat is that you need to pay yourself also a minimum wage salary as you are the director.
It seems much simpler than doing offshore etc for just 100k income, and 100% legal and proper.
Understood.
I just found some articles where I found that VTZ no longer works if you don't live in Georgia, therefore it is automatically discarded.
Thanks for pointing it out!
Seems like the PT company (for IFICI) + LLC is the most reasonable option given the constraints and current income.
How can it be a buffer in terms of the PT authorities?
What I thought instead of freelancer platforms is to use a Merchant of Record.
Therefore the LLC accountancy just has 1 customer (which can even be the same to the PT company).
But I don't know if you are referring to this?
I already spoke with a few. First of all, for the IFICI.
Most of them says it is not doable.
One of them said he is certain is doable via IAPMEI certification. But I need his confirmation in April.
If you any consultant who may help in this, I would be more than happy to get in touch with them.
Basically your suggestion is to get a "paper residency" such as Georgia or Paraguay and then be in other countries for less than 183 days not to trigger the residency there.
Problem is, Spain always tries to bring you back, and they force you to provide proof of your other residency, not just the certificate, but rent, utility bills, and even things like gym subscriptions, grocery shopping, etc.
How could this work?
I am not looking into maintaining Spanish residency (why would I?). I will still be an Spanish citizen however.
Thanks for your message!!
Regarding the leaving of Spain, yes, that is what I am looking for.
I have tried my best to find a reasonable Spanish setup, so to pay, maybe a 30? 35%. I have some tax advisors I personally know and they warm me: you will get inspections from day 0.
We may be able to proof them they are wrong. But likely you will end in court today or tomorrow.
I am young, I am willing to increase my income via hard and extra work. But I am not willing to work from January to June as a whole for them. Just giving your life to them.
That is why I am also trying to get out. Once out, I mean, If at least I can keep 80% of what I make, it makes much more sense to give the extra push to keep on growing. But not in Spain.
Regarding your suggestions, ofc, I know those places are affordable, but I am willing to pay some extra and be on Malta, Portugal or Andorra. I prefer to be near Spain, have Mediterranean culture and sun.
I already lived abroad in Central Europe. It is not for me. My whole life (even if cold on some parts of the year, with negative temp) has been surrounded by sun and it is hard for me to move elsewhere.
Therefore, isn't there any cheap MT/CY "pre-baked" setup for NHRs? Even if setup is more expensive, but running/maintenance costs aren't way too much above 2/3k per year?
A tax advisor recommended me that. Although I told him, wouldn't make a company make more sense? So what you keep inside company, at least the first 50k, are just taxed at a 12.5%. he told me I am right, but usually people prefer to have "personal money".
However, what I am not sure about the social security. The tax advisor I got in touch into, told me that in that case full Social Security was needed to be paid.
Different story on the PT Limited, where you can put you a small manager wage, and take the rest as dividends (correct me if I am wrong).
The use of the LLC basically enables you to get part of your income at a 0%. 20% is already good, but the lower the better as usual!
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Thank you all for your answers, you are truly helping me to get on track!
If you decide for Portugal, Madeira is a better option overall, with a 30% discount on all levels of corporate tax and personal income tax. I believe current minimum CT is at 10.29%. Social Security is at 34.75% and minimum wage for company director is at 522.50 Euro per month (a year in Portugal has 14 months). I believe Azores has a similar scheme.
If you live and work outside of Portugal, in the EU, social security can be paid where you live.
If you live outside of EU, no social security to be paid in Portugal and whatever is applied is up to the country where you are in.
If you live and work outside of Portugal, in the EU, social security can be paid where you live.
If you live outside of EU, no social security to be paid in Portugal and whatever is applied is up to the country where you are in.
Even at the discount of the islands, which is ofc great, mainland Portugal is more attractive to me because I can get in and out by car by myself whenever I want.
Regarding Social Security, it is a key part. I think putting a low salary as manager of the Limited is the best way to avoid a huge hit on social security.
All in all, I am gonna get paid through the PT or US company, so...
Another option for you is US LLC while living in Malta as non-dom: least possibile hassle tax wise, a little more hassle in terms of easiness of visiting Spain (you have to taka e a flight instead of taking a car).
So how would you incorporate? With a virtual office? Don't the PT Tax Authorities check for this?
Also, if you are a sole proprietor and your residency is in mainland Portugal, wouldn't it trigger anything?
This was exactly the alternatives I was looking into before making the decision of Portugal and Malta.
Wasn't sure if a "simple" LLC would make the job for the non-dom. Reading this it seems like yes, once you pay the 5k € annually to make them "happy".
However, how would you buy property/cars in Malta without "remitting" it to Malta and paying taxes?
Maybe using a 3rd overseas company which could be owned by the LLC? Or what's the way if you want to buy things outside food, services, etc, which you may pay it on your credit card of the LLC?
Thanks again!
It's very simple, you don't.
Why would you buy anything in Malta if in 4 years you will move to GIB?
Even if in GIB you'll pay more in taxes, you will get more freedom in return.
> Seems like the PT company (for IFICI) + LLC is the most reasonable option given the constraints and current income.
For NHR (IFICI in Portuguese) you do not want or need a company in Portugal. NHR is 0% personal tax for foreign income. I have it myself, and find life in the Algarve much better than Spain.
For NHR (IFICI in Portuguese) you do not want or need a company in Portugal. NHR is 0% personal tax for foreign income. I have it myself, and find life in the Algarve much better than Spain.
Afaik, living in Malta without a car isn't a great idea.
I have been there, and the public transport is pretty much non-existent. The alternative is ofc, Uber and so on, but I always value the freedom of your own car.
Maybe a sort of this structure would make sense?
Person
US LLC A Holding
US LLC B (Operative) // European Company (Assets)
In this scenario, the LLC B would get the income and flow to the LLC A.
The LLC A would make capital contributions to the European company. This EU company could buy assets in Malta and make a use agreement on a low price?
(As an EU company probably a Cyprus company would work? Or maybe Estonia?)
Does this make any sense?
Thanks again for the ideas!
The new IFICI is different than the old NHR.
I don't know if you are talking about the new NHR 2.0 (which is called IFICI) or the old NHR 1.0 (which was never called IFICI by the way). My guess is you are talking about the old one. The new one has been just passed out and first requests have started going on march this year.
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To apply for IFICI now you need (it is mandatory) to be employed in Portugal.
In this way, you can either find someone to hire you (or to fake it, I already saw some companies do it at about 4k per year), or make your own company, be the CEO and get certified as one of the IFICI alternatives.
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On the other side of the things. Are you running with a US LLC in Portugal as well?
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And btw, what exact cities of the Algarve would you recommend?
Thanks!!
Whit supermarkets delivering food to your door and the fact that all the action is around St. Julians / Sliema where do you want to go with a car?
Not only traffic is crazy but they also drive like UK so everything is in reverse.
You can pretty much move around by walk and or electric bike.
Also, since the weather is mostly sunny get a motorcycle if you really want to escape.
Hi, I did not know that for NHR 2.0 you need to be employed or self-employed.
It's not clear: https://www.mlgts.pt/en/knowledge/l...for-scientific-research-and-innovation/25760/
In that case, I would do the self-employed if I was you, as it's much simpler and cheaper, I did it. 1st year no social security and 10% tax on 70% of income! If you are under 35 they have even better deal for years.,
About areas, Algarve is quite small. Tavira is very close to Spain and cheaper for property. Faro and surrounding area is very near the lovely airport. Albufeira is very touristic. More west becomes a bit cheaper, but windy. Windy Lagos which is 1 hour from airport is for some reason expensive. The more west you go the colder it gets, in weather and sea temperature, big difference. Properties are most expensive by the coast as they are used as AirBnBs. I saw 120 properties before I bought.
Good forum for Portugal: https://expatsportugal.com/
Pretty much because the idea would be to live outside of that mega crowded places for a more "quieter" day to day, even if want to come on weekends or curtains day to the "crowd".
Probably Rabat, which is near to Medina. Seems a much "enjoyable" sort of village day to day (already went there and liked much more the vibes than the super crowded zones, at least for my everyday life I mean).
Anyhow, I am still curious. Is there any reasonable structure to be paired with MT non dom that might be worth to have a look at?
I mean, if I truly like it there, I wouldn't mind buying a property in the middle of nowhere and establish there.
That is why I am also accounting that!
The problem of opting for the tax incentives of the youngs is that afaik, they are not compatible with IFICI, which means you would be taxed also on dividends.
I checked the youngs tax exemptions as well in the past, but it is really a "short term" solution to my eye, since you will be paying more and more year by year.
What is your setup btw if I may know? Are you a "sole self-employed"?
Thanks again!
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