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Question Non greedy setup. Just 10% on total taxes. European mobility

Bimblis

Bimblis

New member
Sep 21, 2022
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CyberMurcia
#1
Hi

I am a freelance programmer, I have general mobility to change residency (just in Europe). I live in Spain, I think taxes are huge, I want to look for something like 10%.

After checking stuff, I've seen some possibilities:

- Bulgaria: This guy (Dmitry Frank) did a review and checked that the lowest as a Bulgarian Freelancer is 15%. Too high.
- Romania freelancer: The calculus for freelancer seemed to be 10% + 2000e/year in social security, but I've check an online calculator in Expatcenter.ro and it is like a 25% of your gross income. So out.
- Romania microcompany: Seems it was possible to get something as 10% total tax until now, but next year they force to have an employee and they say that only 20% of income may come from consulting, and that if you only have 1 client they may consider you are cheating. So out.

I am thinking now in a US non resident, New Mexico LLC, working as fiscal resident from a place that has about <=10% income tax (like Romania, again). And since I dont have to pay social security tax. That small income tax is everything?

Any ideas about other simple layouts?
 
#2
Bimblis said:
Hi

I am a freelance programmer, I have general mobility to change residency (just in Europe). I live in Spain, I think taxes are huge, I want to look for something like 10%.

After checking stuff, I've seen some possibilities:

- Bulgaria: This guy (Dmitry Frank) did a review and checked that the lowest as a Bulgarian Freelancer is 15%. Too high.
- Romania freelancer: The calculus for freelancer seemed to be 10% + 2000e/year in social security, but I've check an online calculator in Expatcenter.ro and it is like a 25% of your gross income. So out.
- Romania microcompany: Seems it was possible to get something as 10% total tax until now, but next year they force to have an employee and they say that only 20% of income may come from consulting, and that if you only have 1 client they may consider you are cheating. So out.

I am thinking now in a US non resident, New Mexico LLC, working as fiscal resident from a place that has about <=10% income tax (like Romania, again). And since I dont have to pay social security tax. That small income tax is everything?

Any ideas about other simple layouts?
Click to expand...
Leave the EU shithole until you can.
 
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#3
Well, i checked also Georgia, but the 1% as freelancer seems to consider freelancer for 1 client as cheating.

I have a friend living there and doing that, and he says the whole country is boring and very closed (i have no idea, never been there)
 
#4
Bimblis said:
Well, i checked also Georgia, but the 1% as freelancer seems to consider freelancer for 1 client as cheating.

I have a friend living there and doing that, and he says the whole country is boring and very closed (i have no idea, never been there)
Click to expand...
Georgia is not Europe. From a logistic point of view, it’s not different than Dubai (perhaps it’s worse).
 
#5
Bimblis said:
I am thinking now in a US non resident, New Mexico LLC, working as fiscal resident from a place that has about <=10% income tax (like Romania, again). And since I dont have to pay social security tax. That small income tax is everything?
Click to expand...

By managing your US LLC from RO you are creating a PE so you are liable to 16% CIT

You should be better double check Romanian micro company because if i remember correctly the 20% income limit coming from consulting was removed.
 
#6
The rules of Romania micro company for 2023 are this (as far as I know):

1663783481105.webp


Georgia is not Europe. From a logistic point of view, it’s not different than Dubai (perhaps it’s worse).
Click to expand...
Yep, I though you were referring to it by "leave Europe".

By managing your US LLC from RO you are creating a PE so you are liable to 16% CIT
Click to expand...

In Spain I think they accept taxing a US LLC at normal tax income (they have an area in the digital form year income tax for it). Is Romania special in this aspect? I though all countries that have double imposition tax contracts with EEUU would accept to tax the US LLC as a normal thing.
 
#8
Mmm.. i see.

How did you discovered that? Did you talk with a Romanian accountant?

I tried to find a list of what countries do with the US LLC, and I could not find it. I am interested in those that are ok with it (or forced to be ok with it), as in the case of Spain.
 
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#11
Bimblis said:
Hi

I am a freelance programmer, I have general mobility to change residency (just in Europe). I live in Spain, I think taxes are huge, I want to look for something like 10%.

After checking stuff, I've seen some possibilities:

- Bulgaria: This guy (Dmitry Frank) did a review and checked that the lowest as a Bulgarian Freelancer is 15%. Too high.
- Romania freelancer: The calculus for freelancer seemed to be 10% + 2000e/year in social security, but I've check an online calculator in Expatcenter.ro and it is like a 25% of your gross income. So out.
- Romania microcompany: Seems it was possible to get something as 10% total tax until now, but next year they force to have an employee and they say that only 20% of income may come from consulting, and that if you only have 1 client they may consider you are cheating. So out.

I am thinking now in a US non resident, New Mexico LLC, working as fiscal resident from a place that has about <=10% income tax (like Romania, again). And since I dont have to pay social security tax. That small income tax is everything?

Any ideas about other simple layouts?
Click to expand...
Freelancing in Bulgaria is 7.5% income tax excluding socials, but they are capped at 12K a year or something, the more you earn the lower your effective tax rate.

You can have a look at Italy maybe with the impatriate regime (70% deduction in the north and 90% deduction in the south) but Italy comes with a shitload of bureaucracy.

Slovenia also has a program for freelancers if you make less then 100K in revenue where you can deduct 80% and only pay taxes on 20% of your income.

The micro entrepreneurs business in France might be interesting for you.

Also Cyprus or Malta do have some tax incentives.
 
#12
The Italian thing seems like to have more than 50% you need to have children or buy houses (in addition, I am already Spanish, and Italians are very similar. It is better to live in a place where you are exotic).

The micro-entrepeneur system in France looks like a nightmare of conditions.

In Malta is almost impossible to enter. Cyprus requires to have a rent there all year that you wont use. Even the 2 months you are forced to be there per year, it must be boring af.

To go under the 10% corporate tax and 5% dividends tax of Bulgarian company (plus the really small SS tax)... seems that can only be done using tax heavens?
 
#15
Dom pedro said:
What about Estonian LLC ? You only pay 20% if you pay yourself dividends/salary. If you reinvest everything you dont need to pay taxes.
Click to expand...
Estonia may benefit larger companies so they will not pay CIT than use that money in the future to grow.

Most of the freelancers use a significant portion of their income for their life expenses so this makes less sense.
Let's say the freelancer makes €50k/year and needs €25k/year for life expenses: he'll end up paying 20% on these €25k (yes, effectively 10% at that moment, but the rest of these 10% is just delayed).

So I don't find Estonia that attractive to freelancers.
It may be attractive to those outside of Europe who want to access European clients (to freelancers from Turkey or African countries etc.)

It makes even less sense if you need to live or spend time there.
 
#16
My year turnover is 75k

I was talking with the employee accountant, and for them the Bulgarian company is an issue, for some reason.

The Estonian LLC seems like it is a 20% corporate tax. You don't really save Anything in the end, you just pay in different order (I think)

I was thinking of an Irish company, and having tax residency in Cyprus. I am currently trying to find information about this non Dom thing.

I don't get it really. I pay 15% corporate tax in Ireland?

Then in Cyprus, I don't pay dividend tax? But... How much social security do I have to pay? Do they require an office, apartment or employees? Quite confusing.
 
#18
Exactly.
Not worth it in many cases as the setup and maintenance costs of such companies will easily eat up the savings (especially Cyprus).

It might work out if you plan to relocate to Bulgaria permanently as you can benefit from both tax savings and lower cost of living there:
https://www.numbeo.com/cost-of-livi...in&country2=Bulgaria&city1=Madrid&city2=Sofia
But that move would most probably degrade the quality of life you're having in Spain (so again is it worth it?).
 
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