Seeking Advice on Offshore Setup for Small Online Store

[sanhwy]

Hello,

I run a small online store in Europe and I am looking to withdraw around 1000 euros monthly without paying taxes. I would like to establish a company and open a bank account in an offshore jurisdiction to invoice internet services from there. From what I have read and heard, Belize and Delaware seem to be popular choices. Could you please recommend or advise me on the best option?

Thank you!

 

[Sols]

Don't.

Focus on growing your business.

When you're looking at 25–100x that level of revenue/income, it might be time to consider multinational tax planning.

At 10–25x, it might be worthwhile to move to Malta or Cyprus, if you have an EU passport.

Although I suppose you could move to Cyprus right now and not pay any income tax on the first 19,000 EUR/year you pay yourself. But if your business only allows for 1,000 EUR/month, I'm not sure there's enough capital in the picture yet to make any kind of tax planning viable.

 

[sanhwy]

I can't move because, as an online store, I sell products to customers in this country and need to work with this company. However, there could be a small advantage in setting up an offshore entity, allowing me to invoice IT services, hosting, etc. To start, I planned to invoice myself €1,000 per month. From what I've seen, it seems interesting to open a company in Belize or Delaware and a bank account, with an opening fee of €1,000 and an annual fee of the same amount. I'm just starting out and still doing research, so any advice from you would be appreciated.

 

[diro]

You get taxed where you live! Time where offshore companies could be used to avoid taxes are over. Relocate or face huge costs for setup company with substance and maybe still troubles.

 

[sanhwy]

I understand what you're saying, but there might still be a small loophole without causing major issues. However, the offshore company will be owned by another member who has no connection to the company where I live in Europe.

 

[Legal]

You get taxed where you live! Time where offshore companies could be used to avoid taxes are over. Relocate or face huge costs for setup company with substance and maybe still troubles.

The resident director, local secretary and minimum local corporate tax are excellent ways to run away from taxes from your tax residency country (If the business is online).

 

[sanhwy]

The resident director, local secretary and minimum local corporate tax are excellent ways to run away from taxes from your tax residency country (If the business is online).

Yes, my company operates exclusively online; it is an online store.

 

[daniels27]

Yes, my company operates exclusively online; it is an online store.

Then why no move to Cyprus and hire a 3pl logistics company to ship goods?

 

[sanhwy]

Then why no move to Cyprus and hire a 3pl logistics company to ship goods?

Because the platform where I sell my products (a kind of Amazon, Allegro, Otto...) does not accept such companies, the company must be from the same country.

 

[daniels27]

Because the platform where I sell my products (a kind of Amazon, Allegro, Otto...) does not accept such companies, the company must be from the same country.

What platform is it? I highly doubt as this would be against EU laws. Even emag, you can open as German company.

 

[sanhwy]

What platform is it? I highly doubt as this would be against EU laws. Even emag, you can open as German company.

This is not the subject of the discussion; my question is whether there is a possibility of opening an offshore company to invoice IT services and to avoid some taxes.

 

[apres777]

This is not the subject of the discussion; my question is whether there is a possibility of opening an offshore company to invoice IT services and to avoid some taxes.

No it won't work like this anymore unfortunately, build a time machine and travel back 15-20 years and it maybe will work.

As mentioned before especially with your "revenue levels" there's literally no point in going "offshore". Trying to do so will only lead to finding yourself in trouble sooner or later, which is definitely not worth for trying to save a few couple thousands.

 

[sanhwy]

No it won't work like this anymore unfortunately, build a time machine and travel back 15-20 years and it maybe will work.

As mentioned before especially with your "revenue levels" there's literally no point in going "offshore". Trying to do so will only lead to finding yourself in trouble sooner or later, which is definitely not worth for trying to save a few couple thousands.

I understand.

 

[daniels27]

No it won't work like this anymore unfortunately, build a time machine and travel back 15-20 years and it maybe will work.

Yes. If you are willing to relocate, there are ways. If not, it is illegal. Even your company problem can be solved by having a non-tax resident company where you need it while paying taxes elsewhere. There are possibilities of rulings and EU complaints for this. We are happy to help if you have more details. You can PM if you don't want to post in public. I do not charge.

 

[diro]

No it won't work like this anymore unfortunately, build a time machine and travel back 15-20 years and it maybe will work.

Yes I whish I was into it back in time, today not possible any longer.

 

[sanhwy]

Yes. If you are willing to relocate, there are ways. If not, it is illegal. Even your company problem can be solved by having a non-tax resident company where you need it while paying taxes elsewhere. There are possibilities of rulings and EU complaints for this. We are happy to help if you have more details. You can PM if you don't want to post in public. I do not charge.

Thank you very much for the support and the time you’ve given me. I would like to send you a PM, but since I’m a new member, I don’t think I have that option.

 

[Legal]

I got confirmation, so about six months ago, I incorporated MI company on behalf of my client via GERAI LTD, a UK company. I have received reliable service and safety payment options through Upwork, which was very good for us from a trusted perspective.

 

[wonderfulboy]

I incorporated MI company on behalf of my client via GERAI LTD,

They were advertising here on OCT long time ago. Never had the chance to work with them. Will try contacting them.

 

[Propeller]

Hello,

I run a small online store in Europe and I am looking to withdraw around 1000 euros monthly without paying taxes. I would like to establish a company and open a bank account in an offshore jurisdiction to invoice internet services from there. From what I have read and heard, Belize and Delaware seem to be popular choices. Could you please recommend or advise me on the best option?

Thank you!

You need to find better methods to tax optimize your setup. However, with this small amount it get's difficult to do much. You want to wait and grow your business before you establish a lot which costs extra to maintain.