Request for Advice: Offshore Company Planning and Creation

[Vangor]

Hello everyone!
I'm new here and just starting to learn about offshore companies. I'm thinking about creating an offshore company, and I'm hoping you can give me some advice.

Here's what I'm trying to do:
I want to set up a company that legally pays less in taxes. I plan to work as a contractor for this company, or maybe just get dividends from it.
But, I've heard that offshore companies sometimes have problems. For example:

1. It can be difficult to send or receive money from offshore banks.
2. Being a contractor can be complicated because of the banking problems.

Right now, I'm living in the EU (but I don't have an EU passport). I plan to move to South America in the future.
Can you give me advice on what kind of company structure I could create to meet my goals? And do you have suggestions about what countries and banks I could use?

Thanks for your help!

 

[Marzio]

what kind of company structure I could create to meet my goals?

None until you stay in EU because any offshore company will be considered tax resident in the place where you reside.

 

[Vangor]

None until you stay in EU because any offshore company will be considered tax resident in the place where you reside.

I plan to move to Argentina in few months, and will loose my EU residency.

In my head overall plan looked like that:

1. Some offshore like company (Georgia f.e.) which is used for all contact remote work
2. Some local Argentinian company that work on contract vase with it (here I pay local taxes)
3. Or me directly work on offshore company

As per you comment, I will still have to pay all taxes for company in Georgia in Argentina?

 

[Marzio]

I will still have to pay all taxes for company in Georgia in Argentina?

Your Georgian company, if managed from Argentina, it will become tax resident in Argentina unless you hire at least a director in Georgia.

The Georgian company will pay 20% tax Georgia on dividends distrubution (15% CIT + 5% WHT) and you'll pay taxes on dividends received in Argentina at personal income tax rates.

The Argentine company will pay Argentine corporate income tax + persoal income tax on dividends distribution.

In other words your plan doesn't make any sense.

 

[Vangor]

Taxes in Georgia under small business statut will be 1%
Good point about director, that make sence to consider it. Then it will be 1% in Georgia and 11% in Argentina as contractor to Georgian company.

 

[Marzio]

Taxes in Georgia under small business statut will be 1%

Yes, for freelancers (not companies) with a turnover up to $165K

https://expathub.ge/tax-freelancers-individuals-small-businesses-georgia/

11% in Argentina as contractor to Georgian company.

Ok then go ahead and tell us how it went!

 

[Vangor]

Part of freelancer or small business kinda OK for me (except ability to pay dividends and reporting every month)
Working as Monotribute from Argentina to Georgian company - this is still something I looking to figure out if it's possible. I will consult with the lawyer from there.

But overall it was an example of structure I aiming for.
Maybe you know how to do it differently and better?

Reside in low tax country - it's and option as well, but I more aim to citizenship + nomad life after.

 

[Don]

Are you an Argentina citizen and moving back to Argentina?

 

[Marzio]

Maybe you know how to do it differently and better?

This depends on what your business is.

Are you an Argentina citizen and moving back to Argentina?

I don't think so, he said he is aiming for citizenship.

 

[Vangor]

Are you an Argentina citizen and moving back to Argentina?

Marzio is right, I'm not, aiming to obtain it, that's why won't be able to reside in tax free zone.
Also don't want to pay 140% taxes they have there, but ok to pay reasonable taxes on Monotributo(like micro business) (40k$ per year taxable income allowed there)

 

[Don]

Marzio is right, I'm not, aiming to obtain it, that's why won't be able to reside in tax free zone.
Also don't want to pay 140% taxes they have there, but ok to pay reasonable taxes on Monotributo(like micro business) (40k$ per year taxable income allowed there)

Argentina is actually one of the best countries for expats with paper residencies.

In 2 years, you can get citizenship, so you should potentially be able to optimize like this:

• Move to Argentina in January (you should not become a tax resident until the next year as the first 12 months are exempt).
• Tax for individuals in Argentina is assessable on a calendar-year basis.
• Be a tax resident in Argentina for one year (pay yourself through EOR service, which will invoice your offshore company).
• Get citizenship, suspend the EOR, establish tax residency somewhere else (ideally where your offshore company is, as you can leverage this to your advantage), and start the lifestyle of a digital nomad.

 

[Vangor]

Sounds like a good plan @Don, thank you! At least my idea was not crazy
Can you recommend some countries for offshore? I thought of Uruguay, since it's nearby and can relocate there easy after, heard on this forum that Panama also could be an option.

 

[Don]

Sounds like a good plan @Don, thank you! At least my idea was not crazy
Can you recommend some countries for offshore? I thought of Uruguay, since it's nearby and can relocate there easy after, heard on this forum that Panama also could be an option.

For practical purposes, please let us know your current citizenship, level of income, and type of business.

 

[Vangor]

RU citizen, EU resident, income ~100k, type of business - contract work IT related

 

[Cloudbanck]

RU citizen, EU resident, income ~100k, type of business - contract work IT related

Ok, if you are Russian it makes sense to do what it takes to get another citizenship. And 100k is too low to make it worthwhile to buy a Caribbean island citizenship, and anyway they dont accept russians much anymore, and Argentina is probably better even if it cant be renounced and takes longer (but still very quick by global standards).

And once you have Argentinian citizenship, you can set up a US LLC and work from Paraguay, Uruguay, Panama, Bahamas, Albania, UAE or whatever country you like with no/low tax or territorial tax (that de facto dont tax one-man-with-a-laptop companies). Or be a digital nomad living and working from multiple such countries and you can even throw in a high tax country for a limited time.

Or actually the US LLC can be set up even before you have Argentine citizenship.

 

[Vangor]

@Cloudbanck thanks for detailed answer.
Do you think US LLC will be better than EU (Cyprus, Georgia (non EU but close)) or UAE company for time being in Argentina (and potentially working via EOR as @Don suggested)?

 

[Marzio]

At least my idea was not crazy

Well the part of invoicing yourself as a Georgian freelancer while being tax resident in Argetina it's crazy.

Do you think US LLC will be better than EU

US LLC is better than any EU company anytime.

 

[Cloudbanck]

US LLC is better than any EU company anytime.

Unless clients require EU company.

 

[Marzio]

Unless clients require EU company.

He said he is in IT and US LLC invoices are accepted without problems.

Clients that require an EU company should go f**k themselves

 

[Vangor]

Well the part of invoicing yourself as a Georgian freelancer while being tax resident in Argetina it's crazy.

Got it, I need it to be other format(not freelancer company) and in another country and it should have some other director(local) to make it work through EOR
Is it possible to do via US LLC?