What’s the best offshore setup for German resident planning eventual relocation, but paying taxes meanwhile?

[anceps]

Hey everyone,

I’m a German resident currently operating a small digital business (freelance consulting, influencer marketing, and video services, 30k yearly).
I’m exploring offshore structuring to build a clean, professional setup that allows me to:

- Stay independent from Germany long-term
- Maintain privacy and international banking flexibility
- Eventually relocate abroad (in 1–2 years), at which point I’d fully exit the German tax system
- In the meantime: pay taxes in Germany properly

Initially, I was advised to go with a private Foundation + IBC structure.
Yes, I do want to pay taxes, because I understand that whatever structure I would have, the German IRS (Finanzamt) will catch me eventually, so I want to stay compliant, report income as required, but also build a long-term infrastructure I can keep using after leaving Germany.

So my core question is, what’s the smartest setup for someone in my position?

Do I really need a Foundation and nominees now, or would a single IBC (properly declared) be enough to get started?

Any providers you’d recommend who are honest and practical, I’d appreciate the input.


Thanks in advance!

 

[aniglo22]

If you directly or indirectly hold at least a 1% interest in a domestic or FOREIGN corporation, it will be subject to exit taxes.
I don't understand what you are trying to achieve with an IBC .

 

[Alonzo]

30k is too low for such structure

 

[anceps]

If you directly or indirectly hold at least a 1% interest in a domestic or FOREIGN corporation, it will be subject to exit taxes.
I don't understand what you are trying to achieve with an IBC .

My long-term goal is to move abroad in the next 12–24 months, and I’d like to avoid building something in Germany (like a local "Gewerbe" structure or domestic company) only to have to shut it down and rebuild everything once I move.
Do you not think it would make sense to set up a simple, clean IBC now (fully declared in Germany), use it as my operating structure, and then "take it with me" once I leave the country?

 

[daniels27]

30k per year in profit is not much. I doubt that there will be much exit tax as it is way lower than when a doctor closes his business. But the risk makes it not really attractive.

Of course, you can start complex setups etc. But it does not make much sense as many setups make sense if you live in X but not so much once you live in Y. At least for such small scales and a lot of personal work involved. You may want to start something in Cyprus with nominees or some US LLC with nominees (where you ideally use people from your environment that you can trust as nominees, noting that they best are digital nomads or live in South America / Africa where nobody cares).

And then see my previous post that your real question should be whether you can fly two years under the radar in Germany. Any IBC and whatever will not solve any of the imminent issues. The nominees do, but only insofar as that you don't work anymore, but the nominees did the consulting on paper.

 

[carlc]

What is your current setup? If you have a personal corporation right now (e. g. a GbR) § 17 EsTG does not apply. You could just move out first and than setup a newco abroad.

 

[aniglo22]

What is your current setup? If you have a personal corporation right now (e. g. a GbR) § 17 EsTG does not apply. You could just move out first and than setup a newco abroad.

Yes, but if he moves out of Germany and takes significant economic operations (contracts,clients etc..) abroad , it would constitute a "Funktionsverlagerung."
This also applies to "Einzelunternehmer" .
Then he will have to pay a arms-length exit price .

 

[carlc]

Yes, but if he moves out of Germany and takes significant economic operations (contracts,clients etc..) abroad , it would constitute a "Funktionsverlagerung."
This also applies to "Einzelunternehmer" .
Then he will have to pay a arms-length exit price .

The best is obviously to move out right away. It is not getting easier.

 

[PassinBy]

Yes, but if he moves out of Germany and takes significant economic operations (contracts,clients etc..) abroad , it would constitute a "Funktionsverlagerung."
This also applies to "Einzelunternehmer" .
Then he will have to pay a arms-length exit price .

As a single person establishment?

That seems insane. How would they separate the company's value from its owner?

 

[saintjohnny]

You're earning 30k. Just move while it's still cheap and stop overcomplicating things.

When you 10-20x your income you're going to wish you moved earlier.

 

[aniglo22]

As a single person establishment?

That seems insane. How would they separate the company's value from its owner?

They would evaluate the value of your clients, contracts IP and future potential earnings .
Here it is described in more detail : https://www.jura.uni-hamburg.de/for...alumni/mitax-funktionsverlagerung-fischer.pdf

 

[Alonzo]

You're earning 30k. Just move while it's still cheap and stop overcomplicating things.

When you 10-20x your income you're going to wish you moved earlier.

OP is very young so he has a lot of time to progress. He might have fantasies of tax avoidance he heard on Tiktok thinking 30k is enough

 

[marioIT]

as they said above pick the cheapest place and low bureaucracy and low cost of life you can find and REALLY move there. You're not ready to think about tax havens with 30k.
So start early to cut your ties with germany with a first low tax jurisdiction easy to move in and cheap to mantain.
e.g. plenty of germans in romania and bulgaria that saved A LOT of money in taxes and grew their businesses to millions, while still living on the cheap, and then you'll be able to look at better places and complex structures.

 

[PassinBy]

They would evaluate the value of your clients, contracts IP and future potential earnings .
Here it is described in more detail : https://www.jura.uni-hamburg.de/for...alumni/mitax-funktionsverlagerung-fischer.pdf

That all seems to be for multinational companies. Although I'm running it through Google Translate to understand so my interpretation is likely very poor

But, yeah, like everyone's saying, OP should just move somewhere cheap and low tax, and worry about structures once he's past 200k! (Or just suck up the tax on 30k for now.)

 

[Aetherial]

I don't know if the 30k is before or after taxes, but saving on that amount of tax by moving to another country is not worth it, since you'll pay about 15-20% tax in Germany. Add social housing and other benefits, you are probably cheaper off living there than in other countries. Bulgaria and Romania are remaining options to save money. But you'll have set-up costs. Also keep in mind you are giving up quality of life by moving there. I think you are selling the bear's skin before you have shot it.

If you really want to leave, it is of course better to go now than to earn 300k and pay more in taxes for a while but I think it is best to move to a feasible and cheaper EU country as a reasonable solution if you wish to leave asap.

 

[aniglo22]

That all seems to be for multinational companies. Although I'm running it through Google Translate to understand so my interpretation is likely very poor

But, yeah, like everyone's saying, OP should just move somewhere cheap and low tax, and worry about structures once he's past 200k! (Or just suck up the tax on 30k for now.)

That's just the examples .
This is article is easier to translate :
https://www.juhn.com/fachwissen/int...wesentlicher Bestandteil des Unternehmens ist.

 

[NewHorizonsParaguay]

Cut your ties with Germany
Move where you want to live (get residency there)
Then, set up a structure that will allow you to grow your business while paying zero or low taxes. It should probably be a US LLC.

Alternatively, if you want to stay in Germany for now...

You can still get the residency where you plan to live in the future and set up the "infrastructure" you talk about.
However, no income can go through this infrastructure until you leave Germany for good.
I don't see much point in this unless you are worried that getting residency in the places you want to live (UAE, Thailand, Georgia, etc.) will get harder in the future.

 

[happyjohn]

Cut your ties with Germany

100% yes

But you could also consider figuring out where you’d like to live in the future and then set up your new company there already now.

That way, you might be able to get away with simply being employed by that company, meaning you'd only pay income tax in Germany, along with any standard employment-related costs. And when you eventually move, there’s no company to relocate, you’d simply deregister as an employee.

Given the low amounts involved, if you pull this off within 12 months of establishing the company, I’m pretty confident the German authorities won’t even notice what happened.

 

[anceps]

much

OP is very young so he has a lot of time to progress. He might have fantasies of tax avoidance he heard on Tiktok thinking 30k is enough

not TikTok, that's childish. Saw it on YouTube

 

[anceps]

Thanks everyone, this has been incredibly helpful.

I really appreciate all the honest and at times blunt replies, it’s exactly what I needed.
It’s become clear to me that while I had good intentions (wanting to stay compliant, prepare for relocation, etc.), the timing and structure I had in mind might simply not be practical or necessary while still in Germany.

Instead of rushing into something complex and expensive, I’ll focus on cleaning up my current setup, making plans to relocate properly, and then reevaluating offshore options once I’m in a position where they actually make sense.

Thanks again to everyone who took the time to reply, especially those who brought up legal realities I hadn’t fully considered. That saved me a lot of potential headache (and money).