Relocate to a tax friendly country

[Max2020]

Hi,
I'm a IT consultant. Due to Corona I can work 100% remotely. I'm willing to relocate to a tax friendly country not too far from my home country Belgium. Requirements are timezone (Belgium is GMT +1), tax friendly, good weather.
I was thinking about Greece or Cyprus. Any other suggestions?

 

[Sols]

Cyprus and Malta are the obvious choices for an EU national.

Cyprus is one hour ahead of Belgium. Malta is in the same timezone as Belgium.

Cyprus total tax is 12.50% corporate income tax and nothing more if you pay yourself dividends from the company. Slightly better weather and slightly lower costs of living than Malta.

Corporate tax situation in Malta is net 5% after you first pay 35% and then get 6/7th back after a few weeks or months. You can then pay yourself through a few different means, such as dividends from the required foreign holding company to avoid further tax.

It's easier to run a business Cyprus is than in Malta since there's only one layer to worry about, but you end paying 7.5% more tax. The tax savings of 7.5% in Malta can easily be consumed by the more complicated accounting and paperwork required for having two companies. Consider both options carefully.

Whatever you end up going for, discuss the specifics of your situation with a qualified tax adviser. It's easy to get swept away by short summaries and while they apply in most cases, each case is a little unique.

 

[CaptK]

Cyprus and Malta are the obvious choices for an EU national.

Cyprus is one hour ahead of Belgium. Malta is in the same timezone as Belgium.

Cyprus total tax is 12.50% corporate income tax and nothing more if you pay yourself dividends from the company. Slightly better weather and slightly lower costs of living than Malta.

Corporate tax situation in Malta is net 5% after you first pay 35% and then get 6/7th back after a few weeks or months. You can then pay yourself through a few different means, such as dividends from the required foreign holding company to avoid further tax.

It's easier to run a business Cyprus is than in Malta since there's only one layer to worry about, but you end paying 7.5% more tax. The tax savings of 7.5% in Malta can easily be consumed by the more complicated accounting and paperwork required for having two companies. Consider both options carefully.

Whatever you end up going for, discuss the specifics of your situation with a qualified tax adviser. It's easy to get swept away by short summaries and while they apply in most cases, each case is a little unique.

With Malta you can do the rebate on paper. So you don't actually have to pay the Maltese government the 35%. You can provide the documents and evidence of the payment being made to the holding company.

 

[Max2020]

With Malta you can do the rebate on paper. So you don't actually have to pay the Maltese government the 35%. You can provide the documents and evidence of the payment being made to the holding company.

And whats the best place to setup the holding company?

 

[Sols]

The most common I've seen are UK, Cyprus, and BVI.

 

[apa512]

And whats the best place to setup the holding company?

I did Seychelles for a very low cost with no problems, but some accounting firms will try to sell more expensive options.

 

[Max2020]

I did Seychelles for a very low cost with no problems, but some accounting firms will try to sell more expensive options.

What is the initial and yearly cost?

 

[CaptK]

And whats the best place to setup the holding company?

I use UK as I'm here and have the infrastructure already. Cost maximum per year are around 1K but typically 600-800.

 

[apa512]

What is the initial and yearly cost?

Last year was 700 EUR. I think initial cost was the same.

 

[PrestoR3]

Hi all. What is not clear to me about the Malta trading + UK holding setup is what is happening after you pay out dividends from the UK holding to the ultimate beneficial owner of the structure. The answers I received from accountants are not entirely convincing to me.

My understanding is that considering UBO is a tax resident in Malta there will be no income tax due in the UK. However, if you move those funds to Malta there will be income tax due (remittance tax basis). Is that correct?

On the other side if you never introduce those funds to Malta, theoretically they remain tax-free... but what bothers me is that in this case, you end up with funds that were not declared in any country (income tax-wise). Can that cause potential problems further down the line when you decide to do something with that funds?

 

[CaptK]

In actual fact you pay tax in Malta of 35% and then request a refund of 30%.
Ideally you show all this on paperwork submit the paperwork and pay 5%.