b) The other theory is that I pay 20-26% income tax on this money.
I will still live in Greece, the company will be managed from Greece. So I am afraid that the entire income from the Romanian SRL will be taxed as personal income.Romania and Greece have DTT, therefore, given that Romania does have a 5% tax on dividends and Greece has the same rate, you will pay only the difference in Greece, which in this case is 0%.
Where does this income tax come from?
It is the Greek advisors that give me contradictory info. On how easy or impossible it is to move my tax residency to Romania etc.There are questions you should be asking a Greek tax adviser/attorney.
As a general principle, any company which is managed and controlled from Greece is tax resident in Greece. This means that your Romanian company will be subject to full Greek corporate tax. If you have already paid tax in Romania, you might be able to use the DTT to only pay the difference in Greece. So if you've paid 3% corporate income tax in Romania, you'd have 24%-3%=21% left to pay in Greece. Since we're talking about 3% tax on revenue in Romania and 24% tax on profits in Greece, the exact calculation works out a little differently.
To get around this, you need to move real and effective control and management of the company to someone in Romania, so that you become purely a passive investor.
A local director doesn't change anything if it's just a nominee. It might add some nuance but you're ultimately the UBO and have control, so as @tasos says, it won't work out.The reality is that I will stay in Greece, and I will run the company from here. Maybe I can find a nominee director. Would this be viable?
Fully understand why you're asking for real experiences and hopefully someone shares theirs. In my experience, while there is interest in Romanian micro companies, I have never seen one formed. It never ends up being the best choice. So you may have more success if you extend your search for comparisons to include any foreign (or at least EU) company controlled from Greece.This is why I am looking for real experiences
@Sols May I ask why you think so?In my experience, while there is interest in Romanian micro companies, I have never seen one formed. It never ends up being the best choice.
Each situation is different but the commonly brought up drawbacks for Romania are lack of familiarity, lack of precedence, language, bureaucracy, corruption, poor banking, difficulties attracting foreign talent, and the local currency being rather useless.@Sols May I ask why you think so?
But I do not want to hide from being the owner.The Greek advisor is not advising you correctly. It doesn't matter if you have a nominee director or not, the banks want to know the UBO and under the CRS, the banks will report the UBO, aka you, to Greece.
The bank will report to Greece because you are the UBO and you live in Greece. The Greek authorities might investigate the company and send you a tax bill (exactly how this works varies). You can then try to fight it (in court) and point to the local director in Romania, and claim that you are just an investor.Sols said that I need to have a REAL manager in Romania and me to be just the investor. The banks will report me anyway.
I don;t understand how the banks will know the difference for a real manager to a nominee director.
I understand.The bank will report to Greece because you are the UBO and you live in Greece. The Greek authorities might investigate the company and send you a tax bill (exactly how this works varies). You can then try to fight it (in court) and point to the local director in Romania, and claim that you are just an investor.
That's a bit simplified, but it's basically how it would go.
Then the board of directors of the Romanian company can decide to distribute dividends to you as the shareholder/investor. You will then need to pay income tax on dividends received in Greece.Now suppose I am a real investor and the company has substance, office, employees and a director in Romania. How would the scenario change?
Yes, I understand this. And this is true wether I have a nominee director or a real substance company. Correct?When you open an account for your Romanian company, the bank will see that you are the UBO (Ultimate Beneficial Owner). Whether you have a nominee does not affect that. You are still the UBO.
Correct.Yes, I understand this. And this is true wether I have a nominee director or a real substance company. Correct?
Correct.Without further investigation from the authorities, they could not know if the company has real or nominee director in Romania. Am I correct?
Thank you so much for the clarification. There is so much misconception around.The report the Greek authorities receive will just say that "Mr. Lionheart of Xyz Street, Athens, Greece is a beneficial owner of bank account 123 held by Abc Limited with a balance of ### euro". It is then up to them to decide whether to take any further action.