I'm not saying that to show off.
in Romania the employee gets 55% out, the rest 45% goes to the gov, tax, health insurance etc.
Tax on profit 10%
Tax on dividends 5%
And it's added the health insurance if you didn't have one payed.
Roads and others, we pay $to the UE, we could get more than what we pay, but politicians don't like "free" $ from UE 'cause they get caught, so no new hospitals, highways etc, at least till last November, now we have half of the gov with new politicians and things are running, kinda unbelievable comparing with other times!!!
A couple of times I asked myself the same, does it worth going all the hasle for that 5%, for the moment it's an idea, I still check the legal and practical part of it.
The main problem is the banking system, they avoid crypto or they have silly limits like under 20k $ per month.
Open a revolut or binance account, and you are done! Easy peasy
Also the romanian corporate tax should be 16% but, you can pay as little as 3% up to 1 Million €, which can be further reduced if you employ someone. Which is not that bad at all! I'm reading this conversation because I'm thinking myself to move from Italy to Romania to open the microcompany there and benefit from these tax exemptions. If you want to stay close to Europe, Romania is one of the best, if not the best ever!
In the past few months I studied about many possibilities and the most attractive if you don't want to go on the other side of the world, keep your costs and taxes low and still have the freedom to travel, in my opinion are these ones:
- LLP Uk + Dubai residency = zero tax rate and should be legal (someone can confirm that is 100% legal to own a UK llp company which is tax transparent while being resident in Dubai, without breaking any rules?), but a bit expensive living there.
- Portugal residency + Maltese company + maltese Holding = 5% tax rate, but very expensive because you need office, employees and local director plus 2 companies = trading + holding. Seems quite expensive and complicated.
- Romania company + Romania residency = 3% tax rate on total turnover but only 1% if you have an employee + 5% on dividends.
- Bulgaria company + Bulgarian residency = 10% tax rate on profits + 5% on dividends. More or less same issues and advantages like in Romania about the car, the social contributions, etc, but here I won’t understand anything about Bulgarian language. I think Romanian language is easier). Both Romania and Bulgaria come with these advantages plus: they are both also quite cheap to setup and maintain and to create the "substance" you need if you want to relocate somewhere else in Europe later. You can also rent or buy a car from your company and use to to move within Central Europe. (They have the 183 days rule, but I've been told, it's really hard that someone will check about that (can someone confirm about this?)
- Cyprus company + Cyprus residency (12.5 tax rate (19.500€ tax exemption on personal level) but many social contributions and high accountancy/setup expenses + it seems to me also high level of complication regarding the book keeping). 4.5k company setup. + 1.5/2k annual accountancy. This could be good for the 60 days rule, but in fact you have to rent a place the whole year, prove you don't spend 183 days in any other country, and pay social contributions and health national taxes. Plus to get the personal residence, you have on of these options: 1. to register a local company, 2. being employed in a local company or 3. register yourself as self employed, while proving you have some reason to do so (active contracts, income) and paying the taxes accordingly which are much higher).
- Andorra company + Andorra residency 10% tax rate but more expensive
To me it seems that if you want to stick around europe and have pretty much flexibility the best solutions are these two:
1) LLP Uk with UAE Residency (then if you want to you can live in Europe 10 months a year (but not in the same country).
It's more expensive but worth considering. The problem is that renting an apartment if you are not living in Dubai is like wasting 10k a year.
2) Company setup in Romania and Bulgaria, with local residency. Cost much less and you are still free to move around europe (and also you have a car to do so if you want to). The main disadvantages are the capital gains taxes (which don't apply in Malta, Cyprus, Dubai and I think also Gibraltar).
But in this case, once you get a local employee, you can also choose to relocate elsewhere later, with pretty much the same benefits:
- Malta (zero tax rate)
- Portugal (zero tax rate)
- Greece (2.5 tax rate)
- Dubai (zero tax rate)
- Other places with a bit more higher taxes (but only if you distribute dividends, if not it's not an issue)
Ofc if you don't mind to relocate in Asia or South America, there are certainly far better solutions than these ones.
But it's worth leaving everything behind like that, just to save on taxes?
Maybe it is, but since i'm not ready for that big move now, I believe these could be the best possibile setup, while I will decide where to settle in the near future, let's say in 2/3/4 years from now.
Maybe I missed something... For example many talks good about Estonia, but I don't understand how you can avoid to pay the 20% on dividends.
Which is in your opinion the best setup, to live with very low tax rates, low fixed costs, without the need to change your company structure or loose your benefits if you move yourself to another country, be free to travel almost anywhere and whenever you want (for example you can live 5 months in Barcelona and 5 months in Paris, while being resident in Bucarest or Sofia) and also have a car if you want to?
Please let me know what do you guys think about this!
