The most efficient setup

[JustAnotherNomad]

@Azari Again it depends on where you live, where you work, where your clients are, ...

 

[user9823671]

Interesting thread. What about if someone wanted to setup an online services business in a tax heaven. No staff needed and the business can be managed from anywhere in the world via the internet and services could be provided in any country in the world. Any advice for such a setup ?

problem is you cannot get a bank account or any payment processor to process your payments for setting up in a 0% tax haven and you would still be liable in your country of tax residence, which is probably your home country if you move around a lot. From waht I understand, you cannot be tax resident no where, so it defaults to your home country. But whether anything happens because of that, I don't know

 

[Azari]

Thanks guys, I really appreciate your input. Is it not possible to set up a payment processor through a provider based in a tax heaven country / city ?

 

[JustAnotherNomad]

A lot is possible, but it’s either illegal, expensive or useless. Take your pick.
Did you read the thread?

 

[user9823671]

Thanks guys, I really appreciate your input. Is it not possible to set up a payment processor through a provider based in a tax heaven country / city ?

If you have big volume to push through it, you can probably sort something.
If you are prepared to go for a unknown crappy service that fails for lots of western countries cards.

Some people do report they have sorted something, however, details never then follow and even if true, the risk is that it gets cancelled after a while.

 

[Azari]

Well, the nice thing about internet based services is that one can develop it and set it up literally anywhere in the world. We can develop the system to be scalable, flexible and very fast. We can manage it from anywhere in the world. I am in the process of researching the best approach in terms of either minimising tax or zero rating it in a manner that is legal. I am sure there is a solution to this.

 

[JustAnotherNomad]

It doesn’t matter if you could be managing it from somewhere else. What matters is where you are managing it.
If you live in Oman or Panama, it is irrelevant where you work. But if you live in the US or Spain, the taxman will care.
So there is no “one size solution”.

 

[Azari]

Thanks for that info - what is unique to Oman and Panama if you don't mind me asking ?

 

[JustAnotherNomad]

Countries without taxes. Oman has no tax and Panama has territorial taxation, which in practice also means that you pay no taxes.

 

[Azari]

Cool, I did not know that. Any other such countries ?

 

[JustAnotherNomad]

Edit: I see posting that link isn’t allowed.
Just google tax-free countries or countries with territorial taxation.

 

[JohnLocke]

Any advice for such a setup ?

The simple and fast answer: One setup would be to setup a Cyprus or Bulgarian company or Even Georgia company, all of them can be setup remote. For banking you can use an EMI the same for the payment processing.

 

[totoro]

Saw this structure at one conference. Anyone tried it out?
The idea is: Malta for 5% effective CIT; Slovakia for 0% dividend distribution.

 

[JustAnotherNomad]

Interesting! Reminds me a bit of this: Tax-free residency in Estonia
What conference was that?

 

[totoro]

Interesting! Reminds me a bit of this: Tax-free residency in Estonia

IMHO Estonia is convenient when you just start and plan to reinvest the undistributed income for further growth. If you want to live on that, 20% CIT is not that attractive.

Interesting! Reminds me a bit of this: Tax-free residency in Estonia
What conference was that?

It was called Bosco Conference if not mistaken. The presentation was made by Mag. Johannes Schwarz.

 

[JustAnotherNomad]

IMHO Estonia is convenient when you just start and plan to reinvest the undistributed income for further growth. If you want to live on that, 20% CIT is not that attractive.

You didn’t read my post. Which might be a positive thing. If everyone is too lazy to look into it, the scheme might be more likely to survive.

 

[totoro]

You didn’t read my post. Which might be a positive thing. If everyone is too lazy to look into it, the scheme might be more likely to survive.

Sorry, I will read it

 

[Marzio]

the scheme might be more likely to survive

Yes, that's why you should probably take it down! Lucklily for us Estonia is associated with wannapreneurs and amateur entrepreneurs because big boys use Hong Kong LTD or UK LTD or US LLC.

 

[clemens]

View attachment 1502
Saw this structure at one conference. Anyone tried it out?
The idea is: Malta for 5% effective CIT; Slovakia for 0% dividend distribution.

great share, I was wondering if this is something anyone has tried in real life maybe?

 

[JohnnyD]

So I have a friend who has a business in a high tax country. Business is not brick and mortar, but software, which makes everything easier as, without having an office, it's much harder to prove that business is managed in one country, although he do has most of his client in his high tax country. What he did is that he created a company in Estonia, which holds the intellectual property, and he moved to Thailand ( something he already wanted to do ) with a student visa. Thailand doesn't know anything about his Estonian company, he can keep money in the Estonian company as money which is not distributed is not taxed, and his home country can't do much as Estonia is not a tax haven ( tax rate is 20%, with the difference that only money taken out of the company is taxed ) and my friend is not resident in his home country anymore.
This isn't a perfect setup, but it's solid enough if you are talking about 100k a year. My friend on 100k a year saves 45k in taxes, which makes a real difference. The problem will arise if and when he will come back to his home country, as he will not be able to spend money he has hidden abroad to buy a house, but since his family has plenty of houses, that's not an issue. He also doesn't have a wife or kids, which makes everything easier.
This is to say that there is no "best" setup, it all depends on what your business is, and how long your business has been run in an high tax country, how much money you are currently paying in taxes to the tax authority, and so on.

I am in a similiar situation than your friend and I am seeking for advice.

Current situation:
- Austrian citizen, not resident in the country anymore
- Living in Thailand
- I have a Thai Business
- Main Customers are Austrian Companies

My plan:
The plan is to direct the money from the customers to an offshore company (Seychelles?) with EMI (TW?). Then I would bill the OC from my Thai Company to be able to pay my bills in Thailand. The rest I would transfer to my Austrian Bank Account. As I am non-resident in Austria and don't own any property there aswell, in my understanding this should not be an issue. My accountant in austria said that as long as I don't earn any income from rentals in austria I shouldn't have any tax issues there. In Thailand income from another year is exempted from tax afaik. To keep the tax low in Thailand I want to avoid the cash flow getting to high to thailand.

Am I missing something? Do I run into any problems with the combination of Seychelles/EMI and transfering money to Austria? Or is something else more reasonable than Seychelles? I wouldn't want to keep a huge amount of money on any EMI, so thats why I would like to kind of secure it in austria.