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Relocation to Portugal? Or maybe Malta or Andorra?
- Thread starter blast629
- Start date
That 7.5% is on corporate or personal level?
Could be an option, although I never were to Bulgaria, Idk if I would like it.
PT and MT I already kind of saw I could make a life there.
On the other hand, if that 7.5% is on a corporate level, what are the requirements? Could make sense if setup and maintenance is cheap as a safer alternative for NHR than the US LLC without the extra accounting/maintenance costs of a Maltese Limited.
Issue is I plan to go in and out of Spain every once in a while.
Usually I have to conduct 1 monthly meeting in person, but I usually know the date with very few time (maybe 3 days).
Exactly. That is why Andorra and Portugal were on tier 1, and Malta as a tier 2.
Tier 2 because it is at least acceptable, flights from 30€ and 3 hours trip. Sort of okayish.
Tier 3 would be flights with scale such as Cyprus.
You got a point. Anyways, it is always great to know alternatives in case the other may not work for whatever the reason.
Thank you all again!
Let's be clear, if you live in the EU, wherever you set up your company does not allow you to avoid Social Security so, for example, NHR in Portugal (which is also available in the islands), will still make you liable to SS. No one escapes the SS. Know your history. 
If you are just trying to minimize your expenses with taxes, I would not look into Portugal for my tax residence as SS is pretty high. Eastern Europe countries would be the best option, allowing you to get the European Health Card which gets you access to the health system in any EU country.
If you are just trying to minimize your expenses with taxes, I would not look into Portugal for my tax residence as SS is pretty high. Eastern Europe countries would be the best option, allowing you to get the European Health Card which gets you access to the health system in any EU country.
No this is sole trader where you can get 7.5%, it’s reduced to this amount for generalising expenses so you can add no further expenses, normally 10%. Lots of people combine Bulgaria with an Estonian company.
People don’t really consider Bulgaria, it’s seen as a poor country which isn’t exactly true. It’s one of lowest taxed countries in Europe with great access to EU. Also you can bill your clients with your Estonian company and put the minimum through the Bulgarian system and pay 10% dividends along with being eligible for European Health Card for peace of mind.
Not forgetting you need to rent a flat in Malta and Andorra both of which are thousands per month especially in Andorra it has gone crazy with prices. I imagine anything under 1,000 EUR that isn’t some tiny sofa bed flat is impossible now.
Where as in Bulgaria you can get massive apartments for 200/300€ a month.
People don’t really consider Bulgaria, it’s seen as a poor country which isn’t exactly true. It’s one of lowest taxed countries in Europe with great access to EU. Also you can bill your clients with your Estonian company and put the minimum through the Bulgarian system and pay 10% dividends along with being eligible for European Health Card for peace of mind.
Not forgetting you need to rent a flat in Malta and Andorra both of which are thousands per month especially in Andorra it has gone crazy with prices. I imagine anything under 1,000 EUR that isn’t some tiny sofa bed flat is impossible now.
Where as in Bulgaria you can get massive apartments for 200/300€ a month.
Of course, I know social security is a big hit in the EU. In fact, as of now, in Spain, for my level of income, the hit is bigger than the income tax itself.Let's be clear, if you live in the EU, wherever you set up your company does not allow you to avoid Social Security so, for example, NHR in Portugal (which is also available in the islands), will still make you liable to SS. No one escapes the SS. Know your history.
If you are just trying to minimize your expenses with taxes, I would not look into Portugal for my tax residence as SS is pretty high. Eastern Europe countries would be the best option, allowing you to get the European Health Card which gets you access to the health system in any EU country.
That is why i want to pair a US LLC or MT Ltd: to avoid Social Security Costs.
Understood. Basically a 10% rate, but since you get "misc expenses" deduction of 25%, you end up with an effective 7.5% rate, right?
Not an option I would consider as main as of now, but certainly interesting and to be taken into account.
Regarding the housing, that is the main reason I am more into looking PT or MT than Andorra. The Andorra real state market is skyrocketing, and i mean, it won't go lower, because it is a very small place, and with more and more tax hells in the surroundings, it is going to get worse and worse...
On the other hand, I spoke to the lawyer. It seems like IFICI is going to take longer, since the AT can wait until may for the first approvals/rejection for the IFICI regime, so still nothing really clear on that side.
However, regarding the setup, it seems like both Cyprus and Malta setups are fairly common, and they are both, in his words, safer than the US LLC, being the catch the CIT on the Cyprus (12.5% and raising to 15%); and the high running costs of MT companies.
For this matter, I opened this post, just to keep it "nice and tidy"; trying to find out if any of you know about MT company costs: https://www.offshorecorptalk.com/th...orporation-formation-setup-maintenance.47462/
This way the risks can be better weighed. I mean, if CIT in Malta is roughly 5%, and with all expenses I may be looking at a 10% (both taxes + costs) it could be sort of okayish.
Thank you all again!
Don't consider the 5% Malta as a long term solution. The government will probably change the 5% full imputation to a homogenous system that is the same for everyone (Maltese and non Maltese).
So again, I wouldn't consider it as a long term strategy.
But anyway, I don't think Malta can be considered a "long term" choice in any case. (unless you are Maltese or have a Maltese wife/children).
As for the costs of formation, management, accounting etc. especially in a place like Malta, it is better to go directly to the territory, look for small accountants' offices in some secondary village and find some good deals.
If I have not misunderstood your goal, you really need to move outside of the EU to a country that doesn’t tax worldwide income, then yes you can have a company abroad and minimize your tax burden.
I come from the same place as you and I personally love Dubai, not for tax reasons but everything else. Understand it’s not everyone’s cup of tea but if you’re looking for a “cheap” country with a very high quality of life that’s the best I found for myself. I’ve looked through the entire European landscape before as well as some Asian countries. I’ve put myself into planes and visited the places and spent time there without acting like a tourist. This is my best advice to you. Life is more than taxes.
How you generate your income should also be part of this equation as it will make a lot of difference to which jurisdictions will be happier to receive you. Do you have real clients who you provide services to? Do you trade financial markets? Crypto? Etc etc
I come from the same place as you and I personally love Dubai, not for tax reasons but everything else. Understand it’s not everyone’s cup of tea but if you’re looking for a “cheap” country with a very high quality of life that’s the best I found for myself. I’ve looked through the entire European landscape before as well as some Asian countries. I’ve put myself into planes and visited the places and spent time there without acting like a tourist. This is my best advice to you. Life is more than taxes.
How you generate your income should also be part of this equation as it will make a lot of difference to which jurisdictions will be happier to receive you. Do you have real clients who you provide services to? Do you trade financial markets? Crypto? Etc etc
Life is not about taxes indeed. And you love Dubai? Have you been in Dubai already during the summer?
Indeed It is. That is why I am looking into an expert in that matter.
If I get the confirmation it seems that it might be not that hard (probably a matter of ""networking"" / contacts)
Dubai, as of now is not what I am looking for. Neither is Paraguay or similar American places.
My current business needs (only partially) a close 1:1 and sometimes I need to meet in person for a day every month or two, but with few time. That is why cheap fast flight or road connections are a must.
Maybe in some years my work will be different so I could sort of live more far away.
Same question. Dubai, afaik is very expensive, very consumer centric and sort of hell in summer.
But always happy to read more.
Pretty much none solution Is long term these days. EU, OECD, and all sort of entities putting pressure here and there, looks like everybody is trying to make the world a tax hell as big countries...
It would be nice to make a long term choice, but really, is there any chance to do that?
Thank you all again!
With such a low income, it's best to follow the advice here and otherwise only consider places like Bulgaria or Montenegro, both extremely cheap to live in and with flexible tax rules.
I’m assuming services are then rendered in Spain, at least partially. What do you think hacienda will say about convoluted setups to provide the exact same services you are currently providing? I can very easily imagine a transparent entity such a US LLC being taken into Spanish jurisdiction because part of the revenue comes from services rendered there. Especially in Spain, I wouldn’t try to outsmart them. Not because they’re that smart, it’s just they can turn your life into hell through the process. Just my two cents.
I'm not sure about the Spanish rules, but they would usually have to find a PE in order to tax foreign companies. If you just come and visit for a day to meet a client, I can't imagine they would be successful. And moving to a treaty country should lower the risk further.
The more important thing is that, as far as I know, Spain has strict rules about accepting that you are no longer a Spanish tax resident. If you move to the UAE (blacklisted jurisdiction), they will just say all your income is still taxable in Spain.
So it would probably make the most sense for OP to move to an EU country.
Yes of course, that is what I am looking for.
So far Andorra has been partially discarded due to high real state costs, and well, the nomad visa/permit is pretty much impossible to obtain. Otherwise 50k are needed to be deposited to the AFA.
Therefore the conclusion of the post is basically Malta or Portugal if want as near to Spain as possible.
If don't mind getting more to the East, more options open: Bulgaria, Romania, Georgia, Montenegro, North Macedonia... All of them cheap in costs and low in taxes... But more far away.
Ah well, then you escape those bad months!
Partially, Spain is giving problems to people with NHR status discussing their residence, but it is rarely related to LLCs (except they know the LLC existed before you leaving Spain).
Usually I have been reading people having trouble on pension, insurances, banking, etc having income tax withholding tax, they saying they want the tax not to be applied "in origin" and Hacienda saying, we don't care about the CDI because you are a NHR. We are gonna keep applying income tax withholding to that.
However, afaik, that is for income with direct origin in a Spain entity. I would probably face these issues if I had passive income arising from Spain.
But I guess that would not happen here.
Anyhow, I think a partial workaround to avoid appearing in the accounting records of customers would be to use a Merchant of Record or a FreeLancer platform, to further hide the real entity behind...
Just thinking out loud.
Only problem as a I said is that Spain is excluding people with NHR because they say it would not apply the CDI for those people (except for the brother of the Prime Minister, who is a NHR, "lives in Portugal" -in a house which can not be livable-, works for a Spain public institution with a public salary and he is 100% legal according to Hacienda. You know, typical rule of law and lack of corruption in Spain lands...).
I think no one had problems with 3rd party countries companies though, it is usually more related to income arising from Spain banks, insurances, etc.
Regarding the blacklisted jurisdictions, it is ofc much better to avoid them. They can be a headache already if moving to EU, I could not imagine moving to a blacklisted country...
On this side of things, that is why I have always tried to avoid buying real state in Spain for now. They love to use it against you.
If I were to buy it in future, I would probably do it through an offshore company with a nominee director to at least, mitigate part of the risks... They are always trying to rip off
Thank you all again!
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