Question about irish possibility

[Elgringoblanco]

Hello ,
I'm a frutale tree and seed seller based in Spain and looking for opening a company in Ireland as the taxation and VAT are much more interesting out there,
the biggest part of my business consists in buying tree or seed from other country such as Italy , Greece, Portugal etc and then sell them to northern country ,
so I've no customer or provider in Spain .
Also we plane to sell around 60 to 100k for 2020 in Europe but also part in America is this a worry ?
Do you think it will be possible for me to set it up in Ireland legally without getting in trouble with Spain as I live here but do nothing in Spain, I dont rule any store etc ? Also , do you think Irishformation.ie is trustworthy.

Thanks for your time and help

 

[Martin Everson]

Do you think it will be possible for me to set it up in Ireland legally without getting in trouble with Spain as I live here but do nothing in Spain, I dont rule any store etc ?

Yes you can legally setup a company in Ireland and use it to trade. Please note that if that effective place of management and control of the company i.e where the directors of the company are based and where decisions are made would be Spain I guess. Hence you will need to pay corporate tax in Spain but could make use of any double tax agreement that exists between Spain and Ireland. However the Ireland company would not be considered Irish tax resident for your purpose.

Some of the questions you will asked by Ireland tax man to determine if you are entitled to the 12.5% rate are:

1. Where do the majority of the directors live?
2. Where are the major contracts based?
3. Where are company decisions made?
4. Where are company meetings held?
5. Where are company records kept?
6. Where do most employees live?
7. Do you trade with Irish businesses and have records?

Basically getting the Irish 12.5% rate requires proper structuring and much more than a virtual presence in Ireland.

 

[Elgringoblanco]

Aw ok , and is there any other way to avoid Spanish taxes ? They took me around 40% with VAT etc , I'm living in Spain but just for the climate , and for my trade I usually move to meet my provider and then send it to my customer , so in fact nothing came to Spain.
Maybe it would be easier if I open an irish company who offer internet service or so ? And just change my invoice title ?
Or I may need to open it somewhere else ?
Can you please tell me what would be my best bet to avoid over taxation ?
Thanks a lot for your time and help

 

[Martin Everson]

Aw ok , and is there any other way to avoid Spanish taxes ?

There is always a way but you need to assess the cost benefit of doing so. You have two options either 1) move from Spain or 2) structure everything to be done at arms length via a company outside Spain. The last option is not cheap as you would need to establish a real arms length tangible business presence in whatever country your business is offshore in.

Sadly Spain is setup for the rich. The wealthy who move to Spain structure their themselves so that all their income is via capital gains and capital gains has a max tax rate of 23% in Spain .

 

[Elgringoblanco]

Wow sound much more complicated than I thought, so their is no way for me to live in Spain, but dont pay taxes here , even if I dont pay myself a salary and keep all the money on the company account or so , maybe an other offshore country would be a better choice ? Dubai or Andorra?
Can I just change my domicile? Maybe traveling in a cheap place such as Cyprus and asking for a resident paper or so ? Thanks again for your time and help

 

[Reboot]

Why not Andorra or Gibraltar?

 

[Elgringoblanco]

True too , do you know a suitable company maker for Andorra or Gibraltar?

 

[Reboot]

Some traders I know also use Madeira Island.

 

[Elgringoblanco]

Maybe looking for Wyoming or Delaware should be a better idea as I plane to sell to American customer and they seem to be the best place for privacy and access to bank account creation without trouble

 

[andres33]

Spain is provably one of the best country to live but not to be resident. To be resident in Andorra you will need to stay 183 days by year. The authority will control your real stance. In Spain as in many countries in Europe you will have CFC rules. This way you can't manage a company without substance. So don't check for companies like irish compnies if you resident in Spain. Best go to Cyprus. The best way to import and export is to have a Madeira company in free trade zone. Only 5% tax (till 2,8M turnover and if you have other worker you will increment this amount in 500K) . And in some special condition the half of 5% (2,5%). You will need a rented office and 1 worker. So this mean substance. You will must to invest 70.000 euros. Not necessary in the country. All completelly legal for EU. This will be valid till 2027. Provably after this date the EU comission will renew the accord, but for now the date it's sure. But for the moment you have 9 years working. The same conditions if you set up a company in Canarias. But you will need 5/6 worker in main islands or 3 worker in little islands (Lanzarote, Fuerteventura, Hierro...). The manager must live in the island and alll the management must done there(meetings, etc..). You will pay 4% tax and no VAT existing. Only IGIC 7%. No need to bein special zone. All the island is valid
As for Madeira all this accords are valid till december 2027.

 

[Elgringoblanco]

Hello , thanks a lot for the answer, unfortunately Cyprus seem fairly finicky when it's about using the money on their bank account and Madeira is a bit over my possibility as for setting it up it will cost me more or less what I'll have to pay in tax in Spain so not very interesting , also you said to avoid Irish company , what if I set multiple small company who dont pass the 30k yearly of sell ? Thanks for your help

 

[andres33]

Hello , thanks a lot for the answer, unfortunately Cyprus seem fairly finicky when it's about using the money on their bank account and Madeira is a bit over my possibility as for setting it up it will cost me more or less what I'll have to pay in tax in Spain so not very interesting , also you said to avoid Irish company , what if I set multiple small company who dont pass the 30k yearly of sell ? Thanks for your help

The problem will be the same. If you are resident in Spain you are uunder CFC rules. You can't have companies or manage a company without substance. The company will be considered as the own benefice. You are the UBO. Spain is very strict on this matter. The only solution is to be resident in non-dom country. In Cyprus you need to stay only 2 months by year to be considered resident. It's the easiest country for that. After 2 months you can get fiscal certificate. With this certificate you can say goodbye to the spanish "hacienda". But to be non dom resident in Cyprus you can't be resident in other country more than 183 days by year. To be valid for "hacienda", the certificate must to incorporate a special mention of an article of fiscal spanish law that refer to the purpose of this certificate

 

[andres33]

Hello , thanks a lot for the answer, unfortunately Cyprus seem fairly finicky when it's about using the money on their bank account and Madeira is a bit over my possibility as for setting it up it will cost me more or less what I'll have to pay in tax in Spain so not very interesting , also you said to avoid Irish company , what if I set multiple small company who dont pass the 30k yearly of sell ? Thanks for your help

You don't need to open account in Cyprus to be resident. You can account with EMI or other bank in other place. it's not necessary

 

[Elgringoblanco]

Awesome , thanks I'll think about going 2 month in Cyprus could be the best and coolest solution after all, also what do you think about Delaware? As my biggest customer is American , maybe it would be better for me to stop making business with the other European smaller customer ? Or the worry will be the same and Delaware will anyway tell to hacienda that a guiri is trying to avoid over taxation ? By the way I'm not Spanish, i just live here but dont have the permanent resident paper or so.

Thanks again for your time

 

[Elgringoblanco]

Hey bro spaniard here, using an American LLC could be great for your business....
I also know that taxation here sucks so hard and that the spanish taxmen is famous for been the worst M***** F**** in Europe,acting like the IRS or trying to act like them lol....
I have a Wyoming LLC for an import/export business without any problem with Hacienda....
Hope that could help you with your choose....
Transferwise Atlas seems like a good choice too(DE company + Bank acc)

Thanks a lot mate , can I ask you few question about your LLc in Wyoming? What are the taxe rate ? Do you have to pay federal and state taxe ? Also , for your American customer you have to pay 30% ? Thanks a lot

 

[Hera]

Yes you can legally setup a company in Ireland and use it to trade. Please note that if that effective place of management and control of the company i.e where the directors of the company are based and where decisions are made would be Spain I guess. Hence you will need to pay corporate tax in Spain but could make use of any double tax agreement that exists between Spain and Ireland. However the Ireland company would not be considered Irish tax resident for your purpose.

Some of the questions you will asked by Ireland tax man to determine if you are entitled to the 12.5% rate are:

1. Where do the majority of the directors live?
2. Where are the major contracts based?
3. Where are company decisions made?
4. Where are company meetings held?
5. Where are company records kept?
6. Where do most employees live?
7. Do you trade with Irish businesses and have records?

Basically getting the Irish 12.5% rate requires proper structuring and much more than a virtual presence in Ireland.

Hello, Thank you for your clarification and what are incidences if we have an Irish company without having an Irish VAT number?

 

[JohnLocke]

What agent did you use if you don't mind?

 

[Elgringoblanco]

Cetme , you are truelly a business angel hehe , thanks a lot, so I'll do an American Wyoming or Delaware company with a transferwise account for my European customer , now I'll need to figure out for my American customer how to get paid while avoiding the 30% IRS.
Thanks again to you and everybody who helped.

 

[Elgringoblanco]

Thanks for atlas , but they open only C corp i think, who are slightly less interesting as every sales will be taxed

 

[Elgringoblanco]

Thanks seem good, also maybe I can try something else a bit more elaborate , for exemple , I can opening an LLC in USA for my European customer , and 2 or 3 Irish company for my American customer , that way I can make sales under 35k yearly on each company without having an Irish VAT , then sending from my irish company to the American one ?