Residence in Monaco + US LLC

[Dandyline]

All customers in Europe. Some in the European Economic Area and others in other surrounding countries.

A part of the business is subscription based, but can be transferred to another Stripe account or another payment processor.

Not in one day, but it is a transition that can be completed in 4-6 months without problems. Customers are not subscribed to a single product, there are different products/services that are marketed individually (different brands), even if they are currently marketed by the same company.

Yes, then it's fine.. It's usually the hassle of migrating subscriptions that causes issues.

Just keep in mind that the decline rate might be significantly higher if you are billing EU customers from a non EU company though.

 

[baltic7]

I disagree. Thailand, Malaysia, Panama yes it's cheap. But it's not safe and to say politely these are quite poor countries with not what person with 5m+ net-worth is looking for. There is Singapore , but it's not cheap and it has tax and 60% tax on real estate.

Totally agree. And in Singapore also add between 100% to 320% in cars tax.

 

[scooterguy]

I disagree. Thailand, Malaysia, Panama yes it's cheap. But it's not safe and to say politely these are quite poor countries with not what person with 5m+ net-worth is looking for. There is Singapore , but it's not cheap, it has tax and 60% tax on real estate.
The same with Caribbean. Most of these are 3rd world countries. Sometimes it's just enough to see it for week. Really not for everyone. Maybe except Saint Barthelemy, which can be comparable to Monaco.

Thailand and Malaysia are not poor countries. They are well developed, with great healthcare, are well connected, etc. and are also extremely safe.

Also, lots of people with 5M+ net worth around in SEA. In fact, there are 160K millionaires in Thailand. That's many times the population of Monaco

 

[baltic7]

Yes, then it's fine.. It's usually the hassle of migrating subscriptions that causes issues.

Just keep in mind that the decline rate might be significantly higher if you are billing EU customers from a non EU company though.

Yes, it was exactly the first thing I thought about before evaluating anything.
All these aspects were considered.

 

[jafo]

I know Monaco is small, but living in Monaco doesn't mean you don't have to leave the country. The same as if you lived in Zug or in a residential area of a large capital. In the end, Nice and Cannes are minutes from Monaco.

Bungiurnu!

Man, you are SMART AF! Üncantau

living in Monaco doesn't mean you don't have to leave the country

This is LOST on +99.99% of people who contemplate moving to Monaco. Their "prison" mentality defined by "artificial borders" has baffled me for half a century.
I went to this area a few times in my life and I just laughed at the anencephalic border patrol officers. See for yourself the absurdity of this BS:

Same as with Monaco. One wonders about some people, frankly!

Also, I wrote about Monaco and related things here: Rate the PT Setup
and here: Dubai is dead, any alternative to the free zone 9% tax?
and here: Dubai is dead, any alternative to the free zone 9% tax?
and here: Unlock the Gates of Success: Mentor Group Gold!


Per pieijè, take a trip to Monaco! Everything will become clear AFTER your first week there

If you are serious and you join the Mentor Group Gold (even for one month), I'll send a document to the mods, especially @Sols and @JohnLocke so they can vet it first, and if approved, you can peruse it to rent a place and get your residency in Monaco right away.

Daghe Munegu!
A se revede.

PS. Full Disclosure: I do NOT provide ANY services whatsoever. My business is in my Bio. I have NOTHING to do with the influential Monégasque business person who facilitates the residencies and apartments in Monaco, but many people I know have successfully used his company to get their residency in Monaco. It's cheaper than one can imagine. Even when I got my residency decades ago, I spent more than if I would do it today with him . Also, I've never heard anything negative about him or his company despite decades of business. As a matter of fact, I doubt if he even knows my name.

(PS) ² Dale tio! No seas gilipollas!

I know Monaco is small, but living in Monaco doesn't mean you don't have to leave the country. The same as if you lived in Zug or in a residential area of a large capital. In the end, Nice and Cannes are minutes from Monaco.

I currently live in Tallinn, which I think is much more boring than Monaco, especially in winter. Not to mention the weather and darkness.

This gentleman is keenly aware of artificial borders!

 

[baltic7]

Bungiurnu!

Man, you are SMART AF! Üncantau

This is LOST on +99.99% of people who contemplate moving to Monaco. Their "prison" mentality defined by "artificial borders" has baffled me for half a century.
I went to this area a few times in my life and I just laughed at the anencephalic border patrol officers. See for yourself the absurdity of this BS:

Same as with Monaco. One wonders about some people, frankly!

Also, I wrote about Monaco and related things here: Rate the PT Setup
and here: Dubai is dead, any alternative to the free zone 9% tax?
and here: Dubai is dead, any alternative to the free zone 9% tax?
and here: Unlock the Gates of Success: Mentor Group Gold!


Per pieijè, take a trip to Monaco! Everything will become clear AFTER your first week there

If you are serious and you join the Mentor Group Gold (even for one month), I'll send a document to the mods, especially @Sols and @JohnLocke so they can vet it first, and if approved, you can peruse it to rent a place and get your residency in Monaco right away.

Daghe Munegu!
A se revede.

PS. Full Disclosure: I do NOT provide ANY services whatsoever. My business is in my Bio. I have NOTHING to do with the influential Monégasque business person who facilitates the residencies and apartments in Monaco, but many people I know have successfully used his company to get their residency in Monaco. It's cheaper than one can imagine. Even when I got my residency decades ago, I spent more than if I would do it today with him . Also, I've never heard anything negative about him or his company despite decades of business. As a matter of fact, I doubt if he even knows my name.

(PS) ² Dale tio! No seas gilipollas!


This gentleman is keenly aware of artificial borders!

Thanks for the message, very interesting. I am going to read all the information you have wrote and check the video and links.

Of course, how can I access Gold Membership? What less for the help they have given me on this site. I really appreacite the help.

And if the moderators consider it correct, I would be delighted to receive the information you tell me.

P.S.2: Tu eres de España o has vivido en España muuucho tiempo, hahaha.

 

[jafo]

If you're Spanish — the only problem is how Spain feels about Gibraltar. It's a pretty one-sided dispute for the most part, with Spain crying and Gibraltar/UK ignoring. As long as your ties with Spain are cut and you have a genuine tax residence somewhere else (i.e. Monaco), there should be no issues.

Excellent point!

P.S.2: Tu eres de España o has vivido en España muuucho tiempo, hahaha.

¡Casi casi! Mis abuelos agnados son españoles, italianos y portugueses. Cuando era niño, pasé muchas vacaciones de invierno en España visitando a familiares. Mis padres eran inmigrantes obreros en el norte de Europa.

 

[Don]

I hope I've chosen the right section to write this thread, but being a combination of residency + business setup I'm not entirely sure.

I put my situation in context.

I have had a company in Estonia for 2 years. The company is dedicated to online services. I use Stripe as payment gateways to charge my customers.

Last year I paid more than 600k euros in taxes in Estonia when distributing my dividends, and the first year more than 400k euros. This year, according to the forecast, the taxes will exceed 1M euros.

I want to move to Monaco, because although the costs of living in the country are high, by saving taxes I can rent a decent apartment there from my perspective of life for about 200,000 or 250,000 euros a year. And still have much of the money I pay in taxes for personal use.

The idea is to move my business from the Estonian company to an LLC in Delaware, opening bank accounts in the USA. I can rent a small studio in the United States as proof of address if that is necessary for opening bank accounts, since I don't think that cost will be more than 15k or 20k a year.

Something similar to Saas. But not really that.

Monaco can indeed be a great option for personal residence especially from the tax perspective.
However, you might want to take a second look in regards to how to best leverage your Estonian structure, and the benefits of Estonia in the context of international tax planning.

Even by keeping your Estonian tax residence you could easily reduce your taxes substantially by restructuring your business. If you want to maintain a valid tax residence certificate what speaks in favor of Estonia is the absence of need to reside in the country to qualify as a tax resident.
The certificate of fiscal residence in the Principality of Monaco may be obtained by any person meeting the relevant conditions and in particular by any person who resides in Monaco for more than 183 days per year.

As you have realized cashing out profits from your business as dividends in Estonia is far from optimal. Structuring an US LLC to receive royalty payments from an Estonian resident company doesn't seem like a great idea either due to the 10% withholding tax. There are better jurisdictions for this which could offer overall zero tax rate, but then you're still facing the issue of transfer pricing.
However, an US LLC owned by you and structured in an unincorporated partnership with your Estonian entity could result in a close to zero overall effective tax rate.
And there are more structures that could help to optimize your tax position.

Monaco has signed up to AoEI, CRS, and it does have a corporate tax + permanent establishment regulations, which haven't been known to be enforced for offshore companies, but often there is at least a theoretical risk that could materialize in the future.
Monaco has a great reputation, and it seems to be somewhat submissive to EU demands to avoid being grey listed, like implementing ubo register.

https://www.lemonde.fr/en/les-decod...principality,crimes, in particular tax fraud,
https://www.offshorecorptalk.com/th...orra-monaco-and-san-marino.43644/#post-286162

Regardless how you move forward, do yourself a favour and seek legal advice to at least understand your risks and how to mitigate them.

 

[jafo]

I don't like Southeast Asia to live in. Great for a couple of weeks of vacation, but for me the Mediterranean climate is what I like the most.

Read what I wrote in the Mentor Group Gold about Asia: Unlock the Gates of Success: Mentor Group Gold!

PS. The reason for the Mentor Group Gold is a HEDGE against the social media saturation effect. For example, look at what happened to Dubai. If people who moved to Dubai kept their mouths SHUT and didn't post millions of "extravagant lifestyles" videos and scream about 0% taxes, Dubai would have continued to be a great place today with 0 taxes, but noooooooooooooooooo.... They wanted to humiliate their brethren left behind as tax slaves by rubbing it in their faces and how they found a way to "game" the system. Even "dumb" animals (e.g. Capuchins) don't like "unfairness"...
Watch the short video (<3min):

Can you imagine what would happen to MC • EPA (LVMH Moet Hennessy Louis Vuitton SE) & their investors if they started showing their cost price & their suppliers for all their outrageously expensive items tomorrow?

PS. As an aside, is anyone here aware of the political influence and state-sanctioned violence MC has in France? You would be shocked! It would make North Korea & Kim Jong Un look like a sedated kindergarten. I can provide the document if anyone is interested

(PS)². Disclosure: I own shares in MC (a long time now) and I'm aware of MC's & France's abuses, but I also profit greatly from this "injustice"

Please hold your judgment as Kim Jong Un and others like him are unwilling and unable to provide the same profits in exchange for my investments

Monaco can indeed be a great option for personal residence especially from the tax perspective.
However, you might want to take a second look in regards to how to best leverage your Estonian structure, and the benefits of Estonia in the context of international tax planning.

Even by keeping your Estonian tax residence you could easily reduce your taxes substantially by restructuring your business. If you want to maintain a valid tax residence certificate what speaks in favor of Estonia is the absence of need to reside in the country to qualify as a tax resident.
The certificate of fiscal residence in the Principality of Monaco may be obtained by any person meeting the relevant conditions and in particular by any person who resides in Monaco for more than 183 days per year.

As you have realized cashing out profits from your business as dividends in Estonia is far from optimal. Structuring an US LLC to receive royalty payments from an Estonian resident company doesn't seem like a great idea either due to the 10% withholding tax. There are better jurisdictions for this which could offer overall zero tax rate, but then you're still facing the issue of transfer pricing.
However, an US LLC owned by you and structured in an unincorporated partnership with your Estonian entity could result in a close to zero overall effective tax rate.
And there are more structures that could help to optimize your tax position.

Monaco has signed up to AoEI, CRS, and it does have a corporate tax + permanent establishment regulations, which haven't been known to be enforced for offshore companies, but often there is at least a theoretical risk that could materialize in the future.
Monaco has a great reputation, and it seems to be somewhat submissive to EU demands to avoid being grey listed, like implementing ubo register.

https://www.lemonde.fr/en/les-decod...principality,crimes, in particular tax fraud,
https://www.offshorecorptalk.com/th...orra-monaco-and-san-marino.43644/#post-286162

Regardless how you move forward, do yourself a favour and seek legal advice to at least understand your risks and how to mitigate them.

According to Monaco's own government official tax website, there is no mention of CFC rules or do I not know how to find this?

Source: Tax in Monaco

 

[Konstanz]

Thailand and Malaysia are not poor countries. They are well developed, with great healthcare, are well connected, etc. and are also extremely safe.

Also, lots of people with 5M+ net worth around in SEA. In fact, there are 160K millionaires in Thailand. That's many times the population of Monaco

That what I thought will get an answer. But the reality is there is no such thing as cheap and good option

 

[Don]

According to Monaco's own government official tax website, there is no mention of CFC rules or do I not know how to find this?

Source: Tax in Monaco

Yes. No cfc rules, but in theory a foreign company could be taxed in Monaco.

 

[baltic7]

Yes. No cfc rules, but in theory a foreign company could be taxed in Monaco.

Having substance, I understand that Monaco does not care if the company from which dividends are received is in a jurisdiction with 0% corporate taxes.

What would be that way to structure the company in Estonia to pay almost 0% taxes?

Regarding seeking legal advice, I agree. Can you recommend any?

Searching for it myself randomly doesn't make sense to me, there are many advisors who can even structure things in a way that I will have problems in the future.

 

[jafo]

No cfc rules, but in theory

You scared me for a minute there.
Decades in Monaco and nobody ever mentioned this. As my other posts mentioned, I didn't expand into Zug to pay gift taxes to CH...I mainly needed to appease Chinese banks & some clients.

 

[scooterguy]

That what I thought will get an answer. But the reality is there is no such thing as cheap and good option

Those slums represent like 0.1% of the population. Extreme poverty is almost non-existent in Thailand nowadays.

100% of the people have access to electricity: https://www.macrotrends.net/countri...to electricity is the,a 0% increase from 2020..

99.5% of the population have access to water: Thailand | Department of Economic and Social Affairs.

Unemployment rate is below 1%: https://www.macrotrends.net/countri...refers to the share,a 0.11% decline from 2020.

100% of the population have universal healthcare, and Thailand ranks very high in healthcare in the world.

Safety is really high, with crime, and especially violent crime and murder being extremely low. The big cities of Thailand are much safer than the big cities of Europe.

Maybe you were in Thailand decades ago and have a distorted vision of what's currently going on. The reality nowadays is that most people are not millionaires, but the vast majority of the Thai population live a standard low middle class life.

And, in any case, no one goes to Thailand to live a middle class life, or live in the slums with the bottom 0.1%. One goes to live with the top 1%.

But that's the same when you go to Milan for the 100k flat tax rate, or any other country in which you are looking to improve your life.

 

[jafo]

What would be that way to structure the company in Estonia to pay almost 0% taxes?

I want you to think long and hard about this...

Do you really think that Estonia, earning +1M from you, is going to "allow or accept" that you "restructure" & then not pay them anymore?

That's like saying: My wife (or ex-wife), who is earning +1M from me, is going to "allow or accept" that I "restructure" & then NOT pay her anymore.
Really?

¡Joder tío!

 

[baltic7]

Those slums represent like 0.1% of the population. Extreme poverty is almost non-existent in Thailand nowadays.

100% of the people have access to electricity: https://www.macrotrends.net/countries/THA/thailand/electricity-access-statistics#:~:text=Access to electricity is the,a 0% increase from 2020..

99.5% of the population have access to water: Thailand | Department of Economic and Social Affairs.

Unemployment rate is below 1%: https://www.macrotrends.net/countries/THA/thailand/unemployment-rate#:~:text=Unemployment refers to the share,a 0.11% decline from 2020.

100% of the population have universal healthcare, and Thailand ranks very high in healthcare in the world.

Safety is really high, with crime, and especially violent crime and murder being extremely low. The big cities of Thailand are much safer than the big cities of Europe.

Maybe you were in Thailand decades ago and have a distorted vision of what's currently going on. The reality nowadays is that most people are not millionaires, but the vast majority of the Thai population live a standard low middle class life.

And, in any case, no one goes to Thailand to live a middle class life, or live in the slums with the bottom 0.1%. One goes to live with the top 1%.

But that's the same when you go to Milan for the 100k flat tax rate, or any other country in which you are looking to improve your life.

I understand that Thailand is not the worst place in the world. And even for some people it can be paradise.

But you have to like living in Southeast Asia. For many reasons I don't like it. Very far from my family, a climate that is not entirely pleasant for me, far from Europe which is where I like to spend time, a problematic time zone with my business, a visa that is really a tourist visa for 5 years ( Thai Elite Visa), for these and some other reasons I rule out my residence in Southeast Asia.

 

[scooterguy]

I understand that Thailand is not the worst place in the world. And even for some people it can be paradise.

But you have to like living in Southeast Asia. For many reasons I don't like it. Very far from my family, a climate that is not entirely pleasant for me, far from Europe which is where I like to spend time, a problematic time zone with my business, a visa that is really a tourist visa for 5 years ( Thai Elite Visa), for these and some other reasons I rule out my residence in Southeast Asia.

I know you don't want to live in SEA, I'm not trying to convince you. I was just arguing with Konstanz

Btw there is a 15-year Thai Elite too (still not trying to convince you, just sayin').

Still watching and participating on this thread because I'm really curious on what you end up doing. The information on this thread has also been, overall, of a very high quality.

 

[baltic7]

I want you to think long and hard about this...

Do you really think that Estonia, earning +1M from you, is going to "allow or accept" that you "restructure" & then not pay them anymore?

That's like saying: My wife (or ex-wife), who is earning +1M from me, is going to "allow or accept" that I "restructure" & then NOT pay her anymore.
Really?

¡Joder tío!

Obviously I don't believe it. I know perfectly well all the options I have in Estonia.

That's why I covered all trademark, software and website rights from the beginning with an LLC in Delaware. Because if in the future I have to close the door in one place and open it in another, it is perfectly feasible, since the company in Estonia is just a company that has the rights to operate the business. Not full ownership of it.

But now I'm curious to know what that restructuring would be like.

I know you don't want to live in SEA, I'm not trying to convince you. I was just arguing with Konstanz

Btw there is a 15-year Thai Elite too (still not trying to convince you, just sayin').

Still watching and participating on this thread because I'm really curious on what you end up doing. The information on this thread has also been, overall, of a very high quality.

I appreciate your comments and opinions. I always like to see different points of view, I am a young person and I like to learn from those who know more than me through life experience.

When I structured the business a little over 2 years ago, I did it in Estonia for two reasons.

1. It is the easiest EU country to run a business and pay a reasonable tax when you are starting a business. I ruled out options like Bulgaria, Romania, Cyprus and Malta because they seemed more bureaucratic than Estonia. In Estonia it is very simple, you open your company, you move to Estonia, you apply for residency and in some way you generate a banking and tax history that is provided in point 2.

2. When the business grew to the point where I could meet the residency requirements in Monaco, move there. Estonia is far from my home country, the weather is horrible, it's boring and small. Having a company in Estonia that has been taxed, that is audited and the origin of the funds is clear, I would have fewer problems when dealing with compliance in Monaco.

Even if the taxes were only 500k a year, I would be interested in moving to Monaco. Overall, instead of paying that money in tax, I can use it in Monaco to rent an apartment and living costs. It is not so much about saving that money, but about using that money that is "lost" each year to have a better quality of life than in Estonia.

So now I am at the point that knowing that I can move the investment funds to a bank in Monaco to comply with the residency requirements, optimize the operational part of the company in the best possible way. Whether to do it with a US LLC, whether to use a company in the BVI or Isle of Man or any other option. In a way that is completely legal and without using non-transparent methods.

And if I have to put substance into the operating company, then I will.

Italy's tax flat would have been perfect in case you could have an operating company in a country with 0% corporate tax. But i think is not possible.

Monaco allows that, having fixed expenses to maintain the structure (substance expenses + rental expenses in Monaco + living expenses in Monaco), regardless of whether you have profits of 5 or 20 million.

I don't see other structures like Cyprus or similar, where you pay 12.5% or 15%, as attractive from the point that if I have to pay 1M a year in taxes, I prefer to spend that 1M on renting a home in Monaco. In the end, I'm personally enjoying that expense. If it goes to the accounts of a government, no.

And since I am flexible and I adapt, if one year I bill less, then I will go to a lower quality apartment and there is no problem. Even if tomorrow comes the business no longer works, then I return to my country of origin or to another place that is pleasant to live but with a personal asset that gives me a certain security.

I will think if that time comes how to invest that money or what new business to establish.

But I want to have everything well organized so that if I have to leave Monaco in the future, I can take the money to another country without complications with the banks.

 

[Barney2201]

Baltic, do you want to PM me? I moved to Monaco last August and live there virtually for free. Happy to share my experiences, I’m also looking for the right setup from a company structure and GiB seems like the winner for a European based system.

 

[Don]

Obviously I don't believe it. I know perfectly well all the options I have in Estonia.

That's why I covered all trademark, software and website rights from the beginning with an LLC in Delaware. Because if in the future I have to close the door in one place and open it in another, it is perfectly feasible, since the company in Estonia is just a company that has the rights to operate the business. Not full ownership of it.

But now I'm curious to know what that restructuring would be like.

This requires further analysis, but might be possible.
Feel free to get in touch.

In a contract of partnership, two or more persons (partners) undertake to act to achieve a mutual objective and to help to achieve the objective in the manner established by the contract, above all by making contributions.

Such legal arrangement could be between your Estonian and Delaware entity to run the business, and you can determine the way profits are distributed.

Its effectively a transparent unincorporated entity, that can be managed by your Estonian company so to the clients it will look as if nothing has changed and only the Estonian company is engaged in business while the involvement of other partners can be concealed.