I agree, don't know why people suggest anything else. You need to setup your company in another country with real office and staff to avoid the trouble.
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Swedish company relocation - To where? (12M € turnover, 3M € yearly profits)
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so there will be an independent operator making their own decisions rather than just rubber stamping someone elses. So this person will be happy to state in a tribunal that he and he /she alone runs the operation. I very much doubt this would happen.
The numbers involved make it worth it for the tax agencies to take an interest. However most of the people on here are mom and pop businesses seemingly that arent too bothered and speak from their experience in that regards. 10k at stake or 3 M at stake, puts you under a different magnifying glass.
anyway seek advice, just weird you havent @original poster
I agree that this is totally a "pay for professional tax advice"-situation. But the @original poster wrote that he found it difficult to find "a good tax advisor" where he lives, and that he is reaching out on this forum partly to find one.
And I've found that most tax advisors just know one country, and are lost when things get international, and are not creative in finding solutions. One could go to big corporations that offer these kind of services like PWC, but from what I've heard they are super expensive and not very good. If one is a private banking client, Banks can offer these types of services, but they keep getting in trouble for it, so not sure how happy they are to offer it anymore, and if they have kept the guys that were good at it.
Then there are independent tax advisors specialised in international matters, some with very high online profile.
How about contacting Skattepunkten AB | Erfarna skattejurister, skattekonsulter, skatteexperter, skatterådgivare, bokförare & redovisningskonsulter. , very knowledgeable people with a long track record, and know Swedish tax laws inside out combined with a specialisation on international matters.
"SKATTEPUNKTEN AB
We are a private tax consulting- and accounting firm with very experienced tax lawyers, tax consultants, tax experts, tax advisors & expert accountants."
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Do you have experience with them? From what I have heard, the problem in Scandinavia is that tax optimization is frowned upon if you're not a multinational corporation.
It's considered dirty and people don't actively advertise "how to save taxes by moving your company abroad" - nobody wants to be associated with such services, it could mean a lot of social stigma. Only things like using different kinds of deductions is considered acceptable. This is very different from most other countries where legally saving taxes is almost considered a sport.
Someone advertising that they are "competent in international matters" could simply mean they can help you pay tax in Sweden on money that you earned somewhere else.
Pwc should definitely be able to help, but of course there is a risk that they will assign you a junior who will deliver bad results an overcharge for that.
I would probably contact different companies, including big4 companies and others from Google, Legal500 etc., and go with the company that you feel most comfortable with.
Yeah, I have been in dialogue with them a couple of times over the years, first time 16 years ago - never paid for their services though. Competent but strictly by the book is my assessment.
I agree with contacting multiple tax advisors, including big companies and independent more freewheeling one-person advisors, and compare, and check how comfortable one is with them.
since everybody is saying is opinion, I will say my opinion too:
- since you have done things by the book and the Swedish governement has a lot to lose from your company, expect A LOT of controls if you move your company outside of the country. You are valuable to them and they will try everything they can to demonstrate that you must puy taxes.
- the point above brings the second point: if you decide for a different setup, you have to consider that you need to leave Sweden for good, for 3-4 years. So the question becomes a matter of what you are willing to do to make some more money. Put price tags on things, which means that you must calculate how much it would cost to move everything and how much it would save. Write down the scenarios: you live in Sweden, you sell, you end up with 10 millions, you leave Sweden for Dubai, you have 20 millions, you leave Sweden for Cyprus, you have 15 millions. The question becomes: is having 15 millions compared to 10 millions worth the hassle of switching countries?Usually it depends, I like Dubai and I would like Malta, but I am Happy when I am as far as possible from my family, different people has different priorities.
- Make sure to check with a local tax advisor on legal ways to reduce taxes: I had a friend in a similar situation in Italy and he realized that in itly if you seel a private company, the taxes on the profits are 11%. He stayed in Italy.
- Also make sure to talk with a local advisor on legal ways to circumvent taxes while leaving the company in Sweden.
In General really think this throguh, it might make sense for some people to live 5 years in a place you don't like to have 10 more millions to spend, or it might make no sense, everybody is different
In any case in Dubai you are considered resident after 90 days if you have a property or a company there. As long as you exit Sweden correctly ( which means telling the governement you are not resident there anymore ) and don't go back to Sweden more than a few weeks a Year and don't trigger residency anywhere else, that could be a good solution: you can do 90 days in Dubai, then 4 months in Ibiza, 4 months elsewhere and 4 weeks in Sweden and you are clean. In Sweden better to have nothing, it's easier, but you can of course have an apartment if you rent it.
- since you have done things by the book and the Swedish governement has a lot to lose from your company, expect A LOT of controls if you move your company outside of the country. You are valuable to them and they will try everything they can to demonstrate that you must puy taxes.
- the point above brings the second point: if you decide for a different setup, you have to consider that you need to leave Sweden for good, for 3-4 years. So the question becomes a matter of what you are willing to do to make some more money. Put price tags on things, which means that you must calculate how much it would cost to move everything and how much it would save. Write down the scenarios: you live in Sweden, you sell, you end up with 10 millions, you leave Sweden for Dubai, you have 20 millions, you leave Sweden for Cyprus, you have 15 millions. The question becomes: is having 15 millions compared to 10 millions worth the hassle of switching countries?Usually it depends, I like Dubai and I would like Malta, but I am Happy when I am as far as possible from my family, different people has different priorities.
- Make sure to check with a local tax advisor on legal ways to reduce taxes: I had a friend in a similar situation in Italy and he realized that in itly if you seel a private company, the taxes on the profits are 11%. He stayed in Italy.
- Also make sure to talk with a local advisor on legal ways to circumvent taxes while leaving the company in Sweden.
In General really think this throguh, it might make sense for some people to live 5 years in a place you don't like to have 10 more millions to spend, or it might make no sense, everybody is different
In any case in Dubai you are considered resident after 90 days if you have a property or a company there. As long as you exit Sweden correctly ( which means telling the governement you are not resident there anymore ) and don't go back to Sweden more than a few weeks a Year and don't trigger residency anywhere else, that could be a good solution: you can do 90 days in Dubai, then 4 months in Ibiza, 4 months elsewhere and 4 weeks in Sweden and you are clean. In Sweden better to have nothing, it's easier, but you can of course have an apartment if you rent it.
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I was staying out of this one because my views are so logically extreme and without emotions that they are not welcomed in most discussions, but I would like to support @karishi 's statement and give you an example MOST people would be able to understand.
Substitute the Swedish government with "Anna". You are married to Anna in Sweden. You have been married to Anna for 6 years. Although Anna does NOT help you at all in the business, Anna, nonetheless, "hallucinates" that she deserves +50% of YOUR business. You have indeed been sharing with Anna a huge portion of the fruits of your labor.
What are the chances that Anna will be "OK" and leave you alone when you decide to cut ties with her, divorce her, leaving her with 0 future income, sell the marital home, and move to a nicer and warmer climate with a much younger "new" wife?
Please...think this through.
Good luck & success.
PS. I have NO dog in this fight, but I've been in these dog fights in the past. I just wished some wise older guy with real-life experience on the battlefield would have been candid & disclosed to me the difference between theory, reality/practice, and end results.
All i have to add is -
Sweden based, you have done well. Ask yourself why you have done well. Is it the infrastructure of Sweden that helped you? Some banks in Sweden that are better? Reason being, before committing yourself 4 years as a self imposed exile - are there any opportunity cost? Could you make 5 Million a year in Sweden, whereas you move to Dubai and dont like it, or find the infrastucture/friends/family arent there so you actually will do less work and instead of 3 Million it drops down to 1 million. People really under estimate that you need to be consistent, every day/week regularly to be successful without distraction as to where the bloody banker is that needs to do this transfer....
So you could stay in Sweden and upgrade Anna to Hot Alice and make more money in the process.
Money is one thing, but what makes money is the fact that you spend your Time wisely
Sweden based, you have done well. Ask yourself why you have done well. Is it the infrastructure of Sweden that helped you? Some banks in Sweden that are better? Reason being, before committing yourself 4 years as a self imposed exile - are there any opportunity cost? Could you make 5 Million a year in Sweden, whereas you move to Dubai and dont like it, or find the infrastucture/friends/family arent there so you actually will do less work and instead of 3 Million it drops down to 1 million. People really under estimate that you need to be consistent, every day/week regularly to be successful without distraction as to where the bloody banker is that needs to do this transfer....
So you could stay in Sweden and upgrade Anna to Hot Alice and make more money in the process.
Money is one thing, but what makes money is the fact that you spend your Time wisely
I agree, and there are lots of things to consider of course, a stupid example is that in Sweden fleeing from your taxes doesn't make you a hero, your reputation would suffer ( while in Italy you are definitely a hero
). So whatever you choose to do must fit with your life goals. I make an example with me: I am 45, don't want to have kids, don't want to live together with my girlfriend, I like changing place often, Dubai and a digital nomad lifestyle is perfect for me and my tax goals fits nicely with my life goals. A friend of mine optimized taxation to go live in Thailand, becuase he wanted to stay in Thailand, so he is not paying 0 taxes, but not more than 10%. So it's really a question of deciding what you want to do in life and then optimize for it. Leaving the country might not be an exhile, if you want to live elsewhere: if it's an exhile, it doesn't make sense
Do you have a family? This is an important aspect.
I would definitely look at Dubai as an option. I did pretty much the same and like it so much I ended up staying (surprising).
You can always come over, re-structure, and prep the business for an exit (there are a ton of people looking to invest money here for good businesses) and then once everything is done and dusted you can leave and go wherever you want. But I would cut as many ties as possible with Sweden if I were you.
Feel free to PM me if you have any questions.
I would definitely look at Dubai as an option. I did pretty much the same and like it so much I ended up staying (surprising).
You can always come over, re-structure, and prep the business for an exit (there are a ton of people looking to invest money here for good businesses) and then once everything is done and dusted you can leave and go wherever you want. But I would cut as many ties as possible with Sweden if I were you.
Feel free to PM me if you have any questions.
Hi all, I am the creator of this topic. I really want to thank you all for providing inputs from many different aspects and providing valuable content. There has been errors popping up for me when I've been trying to post causing no posts to come through so lets try again through mobile device.
I have received now an overall view and I know the way forward is to seek legal advice. Also I am willing to spend on legal advice, don't misunderstand me. I am just careful as the whole subject in Sweden when discussing taxplanning will very often cut you out from the society and needs to be considered carefully.
Sweden is a very socialistic country and it's a dirty topic here overall to discuss taxplanning.
I also did not know the large accounting firms offered that type of services, so that was new. I have read though that I should be careful with them as I might end up with a Junior initially. I will leave that solution open though.
I have found two possible advisors online who are familiar with Swedish law, I found them prior to creating this topic actually. They seemed mostly focused around Cyprus also while I hoped for receiving different idea structures here where Dubai is involved for 5-6 months (avoiding the super hot period). Example someone with a more different view on things and how to take advantage of perhaps 2+ countries and split the stay between them successfully. I've learned though that DTI is important here. I will reach out to them and hear what they have to say if there are other solutions than they often talk about.
I know which places I am not willing to spend my days in even if I am forced to relocate. Cyprus and Malta are two of them which I can't stay in longer than 30-60 days at most per year, I would just go crazy otherwise.
I was hoping to hear about solutions where I could stay in Sweden, Spain, Portugal or Dubai and continue to operate my company from there as many days as possible and if required make the minimum required stay to different country. Each of those countries will require a minimum spend ofcourse €€€ for me to keep mine and my family's life at same standards with house+car+travels. So the net amount to save on taxes must make it worth it too.
Final words:
There is a lot to think about and on top of that, finding a working setup on paper will then also put pressure on finding a working setup in real life.
To open a company seems very simple it seems, just fill out few forms. But open a company bank account that will remain open at all times and not randomly closing and asking for supporting documents, PSP approving this setup and remain open at all times and so on seems like a challenge. As the webshop and operation need to be able to run all time with no interruption regardless of company structure.
I have received now an overall view and I know the way forward is to seek legal advice. Also I am willing to spend on legal advice, don't misunderstand me. I am just careful as the whole subject in Sweden when discussing taxplanning will very often cut you out from the society and needs to be considered carefully.
Sweden is a very socialistic country and it's a dirty topic here overall to discuss taxplanning.
I also did not know the large accounting firms offered that type of services, so that was new. I have read though that I should be careful with them as I might end up with a Junior initially. I will leave that solution open though.
I have found two possible advisors online who are familiar with Swedish law, I found them prior to creating this topic actually. They seemed mostly focused around Cyprus also while I hoped for receiving different idea structures here where Dubai is involved for 5-6 months (avoiding the super hot period). Example someone with a more different view on things and how to take advantage of perhaps 2+ countries and split the stay between them successfully. I've learned though that DTI is important here. I will reach out to them and hear what they have to say if there are other solutions than they often talk about.
I know which places I am not willing to spend my days in even if I am forced to relocate. Cyprus and Malta are two of them which I can't stay in longer than 30-60 days at most per year, I would just go crazy otherwise.
I was hoping to hear about solutions where I could stay in Sweden, Spain, Portugal or Dubai and continue to operate my company from there as many days as possible and if required make the minimum required stay to different country. Each of those countries will require a minimum spend ofcourse €€€ for me to keep mine and my family's life at same standards with house+car+travels. So the net amount to save on taxes must make it worth it too.
Final words:
There is a lot to think about and on top of that, finding a working setup on paper will then also put pressure on finding a working setup in real life.
To open a company seems very simple it seems, just fill out few forms. But open a company bank account that will remain open at all times and not randomly closing and asking for supporting documents, PSP approving this setup and remain open at all times and so on seems like a challenge. As the webshop and operation need to be able to run all time with no interruption regardless of company structure.
Also make sure you don't tell a Swedish lawyer something like "Maybe I can sell my apartment to my brother and still stay there when I'm in Sweden..."
Not sure about the exact rules, but they may have to report you to the tax authorities for such things. They may even have an obligation to report you for "aggressive tax planning", even though what you're planning is legal.
If they are not licensed to advise on Swedish law, make sure you double check everything with a Swedish tax lawyer.
You can do whatever you like as long as you are no longer tax resident in Sweden and there's no company or office (permanent establishment) in Sweden.
It's very easy to get tax residency in Dubai, 5-6 months would be plenty for that.
60 days in Malta would be enough for tax residency in Cyprus, but why bother if you like Dubai more and you don't need access to the Cyprus tax treaty network (which wouldn't help you against Sweden anyway).
Spain is a high tax hellhole like Sweden. You could look into the Beckham law or the Italian "impatriate" tax incentives, but I doubt it would make sense, and I also don't know if you can really trust them.
Portugal might make sense, but there's no tax treaty with Sweden anymore, so then you might as well move to Dubai. Unless you like Portugal more. But Portugal's NHR system always has some risk that they might change the interpretation of the law and come after you anyway. So I would still prefer Dubai.
Just live 5-6 months per year in Dubai (ideally 183+ just in case), set up a new company here. Then you can still go to Sweden in the summer and for things like Christmas and travel the world the rest of the time. That lifestyle is very common here.
But please make sure that your transition from Sweden to wherever is set up well, in terms of how you liquidate the existing company. It might even make sense for you to move from Sweden to a treaty country for some time (e.g. live in Estonia or Cyprus for half a year), and then move to Dubai. Or maybe you should sell your company to a holding company before you move to Dubai, something like that. The thing to really work out with a competent lawyer is how to liquidate your Swedish company/get the money out paying as little tax as possible. If you just move to Dubai and take out dividends or sell your Swedish company afterwards, there could be a lot of Swedish taxes.
One other country you could consider is Switzerland, which is also very popular with rich Scandinavians. The taxes and cost of living would still be quite high, but for a lot of people it's a good compromise.
I need some help understanding something
few people here suggested keeping Swedish company and opening one in favourable tax jurisdiction
some of the proposals were:
1. Invoicing marketing services from a favourable tax jurisdiction company
considering the fact that both companies are owned by the same parties, they would be under transfer pricing.
Those invoices have to be inflated so the entire setup has some purpose of lowering the taxable amount in Sweden.
once the transfer pricing kicks in, then they would discover this is typical BEPS (base erosion and profit shifting) behaviour
2. transferring ownership of Swedish company to a holding company in favourable jurisdiction
Even in this case, Swedish company has to have a director/board of directors
Holding company also has to have a director/board of directors
If the holding company is controlled by people from Sweden, isn't it consider a tax resident in Sweden too? Could we end up in a following situation:
- swedish company pays corporate profit tax
- profits are distributed to the holding
- holding is declared a resident in Sweden, and on the profits they received they have to pay corporate profit taxes again
Is this scenario possible?
few people here suggested keeping Swedish company and opening one in favourable tax jurisdiction
some of the proposals were:
1. Invoicing marketing services from a favourable tax jurisdiction company
considering the fact that both companies are owned by the same parties, they would be under transfer pricing.
Those invoices have to be inflated so the entire setup has some purpose of lowering the taxable amount in Sweden.
once the transfer pricing kicks in, then they would discover this is typical BEPS (base erosion and profit shifting) behaviour
2. transferring ownership of Swedish company to a holding company in favourable jurisdiction
Even in this case, Swedish company has to have a director/board of directors
Holding company also has to have a director/board of directors
If the holding company is controlled by people from Sweden, isn't it consider a tax resident in Sweden too? Could we end up in a following situation:
- swedish company pays corporate profit tax
- profits are distributed to the holding
- holding is declared a resident in Sweden, and on the profits they received they have to pay corporate profit taxes again
Is this scenario possible?
1. There is always some wiggle room, but of course the invoices can't be inflated. But even with regular invoices, there should be tax savings. It's far from ideal of course, but probably one of few options for lowering the tax burden while staying in Sweden.
2. In theory, yes, that's why it's important to plan this well with good advisors. I could imagine that there are ways to avoid this with good planning. Not sure if there is much point in such a setup if staying in Sweden though. The idea was more to investigate if this could work for cashing out from the existing company without taxes.
2. In theory, yes, that's why it's important to plan this well with good advisors. I could imagine that there are ways to avoid this with good planning. Not sure if there is much point in such a setup if staying in Sweden though. The idea was more to investigate if this could work for cashing out from the existing company without taxes.
1. still we have the issue of who is controlling the company from favourable jurisdiction.
the substance has to be made very very well, with a transparent and straight forward chain of decision making
just in case if the second company gets audited, and if you report it to authorities, most likely it will get audited
the fact that you are not the director, doesn't change the fact that you are UBO in all bank documents
i think this is very risky scenario and i wouldn't do it for actual tax savings
2. if you are not living in Sweden then it makes sense
you pay profit tax, and the dividend/capital gain tax is taxed in favourable jurisdiction
in this case i am not even sure that you need the holding, just plan the exit carefully and once you are entitled to receive dividends from Swedish company you do it
you should check the law to be sure that there is no withholding tax when paying out to low tax jurisdictions, existance of double tax treaty would probably be the best...
the substance has to be made very very well, with a transparent and straight forward chain of decision making
just in case if the second company gets audited, and if you report it to authorities, most likely it will get audited
the fact that you are not the director, doesn't change the fact that you are UBO in all bank documents
i think this is very risky scenario and i wouldn't do it for actual tax savings
2. if you are not living in Sweden then it makes sense
you pay profit tax, and the dividend/capital gain tax is taxed in favourable jurisdiction
in this case i am not even sure that you need the holding, just plan the exit carefully and once you are entitled to receive dividends from Swedish company you do it
you should check the law to be sure that there is no withholding tax when paying out to low tax jurisdictions, existance of double tax treaty would probably be the best...
1. It's very normal for companies to have subsidiaries in other countries. Even Swedish airline SAS has a callcenter in Cyprus. Obviously it can only be done with very good legal counsel.
2. Yes, the holding is needed to avoid withholding tax. Sweden has no exit tax, but they can tax capital gains from selling shares in Swedish companies for 10 years after you move or so. So you can't move to Dubai and then sell without paying taxes. And if you move to Dubai and pay out dividends, you also pay a lot of withholding tax. But what might work is selling your company to a holding company in Cyprus while still living in Sweden, and then moving to Dubai. I wrote "might" because I'm not a lawyer and I have no idea what else one has to consider.
@factual Please keep us updated what you find out.
2. Yes, the holding is needed to avoid withholding tax. Sweden has no exit tax, but they can tax capital gains from selling shares in Swedish companies for 10 years after you move or so. So you can't move to Dubai and then sell without paying taxes. And if you move to Dubai and pay out dividends, you also pay a lot of withholding tax. But what might work is selling your company to a holding company in Cyprus while still living in Sweden, and then moving to Dubai. I wrote "might" because I'm not a lawyer and I have no idea what else one has to consider.
@factual Please keep us updated what you find out.
1. i don't disagree. this is true.
but the open it in cost saving/cutting effort. the call centre is in jurisdiction with cheaper labour.
purpose is not base erosion, profit shifting...those subsidiaries work with very low profit, or most of the cases in loss.
if they started working with high profits I believe that BEPS rules could be triggered.
2. that is why I said exit has to be planned carefully, with DTTs in mind
could be more complicated than we can imagine
thank you for your answers and great discussion
but the open it in cost saving/cutting effort. the call centre is in jurisdiction with cheaper labour.
purpose is not base erosion, profit shifting...those subsidiaries work with very low profit, or most of the cases in loss.
if they started working with high profits I believe that BEPS rules could be triggered.
2. that is why I said exit has to be planned carefully, with DTTs in mind
could be more complicated than we can imagine
thank you for your answers and great discussion
This is common and works fine.
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