Residency in Malta + offshore company

[1nomad]

Hi, I'm from EU, my business is mainly adult (all legal), but officially it is webdesign, photo/video editing etc. I have Seychelles company but it is getting risky with taxes now so I'm considering moving to Malta. It seems, their remittance system of taxation is ideal for online business. What do you think about residency in Malta and doing business through Seychelles company? Or maybe Maltese company + Seych.company structure? Any other opinions?

 

[Martin Everson]

Just move to Malta and setup local Malta company with Estonia company as shareholder. You will be director and shareholder of both entities. You then pay effective tax rate of 5% in Malta. Estonia company is effectively tax free as it only pays tax on distribution of profits. Then pay yourself a small salary from Malta company and retain all profits in Estonia company tax free. You could also keep profits in Malta company but depends on your taste.

This is a safe total EU solution which offers certainty over messing around with Seychelles and risking problems down the line with EU. Warning do not use tax haven country as shareholder of Malta company....just don't think about it.

 

[1nomad]

Thanks for you reply. So I cannot use Seychelles? Why? What about Delaware LLC? Estonia strucure is fine, but it requieres another bookkeeping and I'm not sure about VAT. Also how to withdraw profit from Estonia company?

 

[Martin Everson]

No, do not link tax haven companies to EU companies....bad idea long term.

Book keeping is cheap for Estonia companies. If you use a companies like www.leapin.eu you can get an all-in fixed price of 59 euros a month to take care of everything. See below:

Plans & Pricing | LeapIN

To withdraw money from an Estonian company simply pay yourself an employee salary to account outside Malta. Neither Malta or Estonia will tax this salary. You will have to pay a small board salary in addition on which you will be taxed in Estonia. See below link for explanation:

FAQ - Receiving funds | LeapIN

Alternatively if zero tax is your thing than invoice the Estonia company for work done from your Delaware company and take money out that way. Bottom line is you want to pay a little bit of tax in Malta and a little bit in Estonia as these countries have to earn something from this or its not worth them offering these competitive advantages

 

[1nomad]

really interesting. It seems to me, Malta company is not necessary, right? I agree, it is always better pay some reasonable taxes, these countries deserve it

 

[Martin Everson]

You are correct it's not necessary. However if you are being paid from a EU country for your services be careful using a Seychelles company to receive the money. If you don't follow EU law changes closely then you can get caught out as legislation evolves to attack use of tax haven countries.

 

[1nomad]

You'll be just resident, not domiciled. Only people born in Malta are considered as domiciled

 

[1nomad]

Just take an ordinary residence and enjoy taxes on remittance basis. There are more non-dom regimes in Europe (UK, Ireland, Italy...) but Malta has probably the best one

 

[Martin Everson]

I had the same idea, but did you actually do it? I am asking because I found controversial info online. According to EY (and they are not likely to make mistakes):

"Persons who are both ordinarily resident and domiciled in Malta are subject to tax on their worldwide income and chargeable capital gains. "
Which means Malta will put income tax on your income from Estonia.
Source: https://www.ey.com/Publication/vwLU...ersonal-Tax-and-Immigration-Guide-2017-18.pdf

Being a resident and not domiciled is what you are if you do not have a Malta Passport and simply moved to Malta. Same way a person moving to UK without UK passport can elect to be a resident non-domiciled so they make use of the Resident non-domicile tax advantage. Hope this makes it clear.

 

[Martin Everson]

Just take an ordinary residence and enjoy taxes on remittance basis. There are more non-dom regimes in Europe (UK, Ireland, Italy...) but Malta has probably the best one

Exactly. I listed in this forum somewhere all the EU countries that offer an RND program of some kind.

France
Italy
Ireland
UK
Netherlands
Portugal
Malta
etc etc

 

[Martin Everson]

France, according to wikipedia (which is not the most accurate source, I admit):
"Individuals' total income is taxed if they are resident in France, whether they have French nationality or not."
"Whatever the nationality, a person who is a tax resident in France is taxable on their worldwide income."
Therefore: France will tax you even if you are NOT domiciled.

Is there anyone who can actually support their statements with reference/source?
So far anything anyone told me here about residency based taxation, I was able to bust within a minute.

Yes off course I can support everything I claim on this forum. France has a tax law (for those in the know) aimed at making France a tax efficient financial centre for financial sector employees and employers . It substantially reduces your taxes if you take up residency in France and eliminates some on assets held outside France such as property. It is not the best RND program but it is better than nothing.


The ‘inpatriates’ tax regime after the 2017 Finance Bill: an increasingly attractive mechanism | Galahad

France - New “Inpatriates” Tax Incentives - Lexology

• Exemption of certain passive income from non-French sources: inpatriates benefit, under certain conditions, from a 50% exemption with respect to capital gains on the sale of shares and other investment income. This is subject to the condition that such passive income arises outside of France, and in a country that has concluded a tax treaty with France including an administrative assistance clause.

 

[1nomad]

Italy

 

[Spinat]

Why? How?
A couple posts above I pointed out that Italy will tax you no matter what.
Unless you can prove the opposite with a source.

second that - can someone elaborate on Italy what tax rules apply ?

 

[Martin Everson]

Why? How?
A couple posts above I pointed out that Italy will tax you no matter what.
Unless you can prove the opposite with a source.

Again what you posted previously about Italy is 100% WRONG!!!

Italy WILL NOT tax you on any foreign earnings if you move to Italy and pay 100k euro a year flat fee. You can even be an Italian living abroad for many years and move back to Italy and get this benefit. In fact you DO NOT even need to disclose any assets you hold outside Italy to the Italian authorities. The law like the French tax law is designed to attract the wealthy including non-resident nationals back home from tax exile.

Withers Law Firm
Italian non-dom regime: ready to go


Ernest & Young
Italy introduces special tax and immigration rules to attract foreign workers and investors

Again I don't make any claim on this board I can't back up. Have a nice day

 

[1nomad]

Why? How?
A couple posts above I pointed out that Italy will tax you no matter what.
Unless you can prove the opposite with a source.

click here » Italy non-dom «