Cheap OFFshore, no taxes, no audit what country for a 5k income freelancer?

[Lex00]

Hey,

What country would be the best choice for a freelancer with the following requests?

I won't be conducting any business in the country where I incorporate. I don't need complete privacy; I can be listed as the director of the company.

I expect to earn between $5,000 and $10,000 per month, planning to spend it all on day-to-day expenses via credit card, including bills, restaurants, takeout, kindergarten, etc. If I'll gather extra $ I'll spend them on trips.

I don't plan on withdrawing dividends to avoid paying taxes in my country; I intend to spend everything on the firm's credit card.

Therefore, I need a jurisdiction that doesn't require a yearly audit and allows me to spend the money as I see fit.

I’m looking for low maintenance (annual fees) and simple accounting, preferably without a registered office in that specific country.

I would like to use Wise or Revolut, but it’s not mandatory.

Any pointers?

When I had a higher income, I had a company in Gibraltar, but for $5,000 a month, I can't afford a UK company at the moment.

 

[daniels27]

At that number, maybe US LLC would be an option. Don't think it makes sense to pay 2500 USD for a SG/HK/GI company at such low figures, but technically possible too.

 

[Sols]

I don't plan on withdrawing dividends to avoid paying taxes in my country; I intend to spend everything on the firm's credit card.

If that spending includes funds not for the business but rather for yourself, that may be considered income (salary or dividends). Just something to be aware of if/when the local tax man comes and asks how you paid for your kids' kindergarten fees. You're still committing tax fraud.

Therefore, I need a jurisdiction that doesn't require a yearly audit and allows me to spend the money as I see fit.

As @daniels27 mentioned, a US LLC is probably a good fit if you also want an account with a service like Wise or Revolut. Other typical offshore jurisdictions will cost significantly more to create and banking will be harder.

 

[alley]

As already mentioned earlier in the thread, your local tax office will likely call you in for a meeting if you’re using your company in this way.

That said, a US LLC is still the recommended route from my side, it’s the cheapest and simplest option.

 

[shimo]

Let's summarize: kindergarten and probably bills/taxes are also red flags, but grocery/travel expenses aren't as closely monitored, i guess!?

Just be ready to proof your lifestyle or keep your instagram out of that flashy trips..

At the end of the day, the people on the other side aren’t stupid , sooner or later, the truth could comes out. You can hide like a mouse, or you can just pay your taxes and relax. Saving a bit of money on daily expenses isn’t worth the stress and trouble it can bring.

I suggest get in touch with your local accountant and compare your options ( if you can afford to wait untill dividends come, than HK is pretty nice and easy setup (i recently opened with full setup at sleek for 2k$) / otherwise US LLC as your personal income )

 

[Lex00]

I have some income on which I'm paying taxes. So its not like I'm living a life that I can't afford.
I still have a local company that I'm using when selling my online services to other companies, I just want to move some income that I get from regular people, not companies , as they don't need invoices.

since I don't plan on getting dividends, I might as well use an appointed director so I'm not going to show up on public records.


What do you guys feel about Estonia?
I'm from a European country as well

 

[daniels27]

What do you guys feel about Estonia?

It only makes sense if you want to keep the money in your company forever as you will need to pay taxes when distributing dividends. There are some people here that like this way and then use the business funds to pay for future investments. You probably can draw the money also on personal travel and restaurant expenses claiming it to be business trips, althoug this probably will only work up to a certain extent.

 

[Clank]

US LLC in New Mexico is around $50 to form and $25 yearly for registered agent.

So first year would be $75 and next years $25.

You don’t need any overpriced island jurisdictions for this.

 

[Primat2024]

What is requirement to get the company done and what bank can I use for New Mexico LLC ?

 

[kriyazen]

It only makes sense if you want to keep the money in your company forever as you will need to pay taxes when distributing dividends. There are some people here that like this way and then use the business funds to pay for future investments. You probably can draw the money also on personal travel and restaurant expenses claiming it to be business trips, althoug this probably will only work up to a certain extent.

If you are the 100% owner and manager with no employees, the tax can be "pass-through". However, the Estonian OU also requires a local agent/address and accountant; I pay around EUR 1,000 per year. Of course, it's recommended to have e-residency as well.

 

[GPT]

I have some income on which I'm paying taxes. So its not like I'm living a life that I can't afford.
I still have a local company that I'm using when selling my online services to other companies, I just want to move some income that I get from regular people, not companies , as they don't need invoices.

since I don't plan on getting dividends, I might as well use an appointed director so I'm not going to show up on public records.


What do you guys feel about Estonia?
I'm from a European country as well

Ah, so tax fraud.

You can run but you can't hide. Be ready to look over your shoulder from the moment you start to follow through.
Especially since you are from a European country.

 

[AtlasShrugged]

Everyone talking about you can't run, tax fraud and all that. His income is 5k USD. I have a hard time believing any tax authority is going to hunt him down for such a small amount, except if he relocates to one of the Scandinavian countries.

 

[shimo]

Everyone talking about you can't run, tax fraud and all that. His income is 5k USD. I have a hard time believing any tax authority is going to hunt him down for such a small amount, except if he relocates to one of the Scandinavian countries.

You're underestimating the situation about the tax.

I've personally seen some pretty bad scenarios even in Baltic countries over very small sums.

You should always take tax law seriously, even in countries that don't tax foreign income for example - if you think they dont care. Just FYI: in Georgia, failing to pay around $30,000 in taxes can lead to a prison sentence of up to 8 years.

 

[Sols]

Everyone talking about you can't run, tax fraud and all that. His income is 5k USD. I have a hard time believing any tax authority is going to hunt him down for such a small amount, except if he relocates to one of the Scandinavian countries.

I know/know of people in Spain, Germany, and other places that have had similar genius plans. Amount is a risk factor, but it is not a deciding factor. Lower amounts are less likely to get caught, which is something some people take to mean they can get sloppy. Sloppy such as paying for their kids kindergarten with a foreign business debit/credit card.

 

[GPT]

Everyone talking about you can't run, tax fraud and all that. His income is 5k USD. I have a hard time believing any tax authority is going to hunt him down for such a small amount, except if he relocates to one of the Scandinavian countries.

Until a couple of years ago that was the case. Since 2020 more or less they hunt for everything. Especially in Europe. But hey, your mileage may vary. I am personally aware of cases in the Netherlands, Germany, France, Spain and Austria.

 

[AtlasShrugged]

Spain, Germany,

Netherlands, Germany, France, Spain and Austria.

All of those jurisdictions have aggressive tax authorities though, and from reading OP's posts, it doesn't seem like he wants to move there.

But you're right. Countries with huge amount of debt are becoming so desperate they need every penny to pay for the interest and defence spending. I know Romania is cracking down on tax evasion because of their huge "budget" deficit. Baltic countries need more money for nato and so on.

At the same time, I don't see how it's profitable for tax authorities to go after small fish, because the fines won't be that big and they are harder to catch. If you place yourself in their shoes, going after a tax evading whale is going to pay off way more than some random digital nomad making salary income.

 

[GPT]

All of those jurisdictions have aggressive tax authorities though, and from reading OP's posts, it doesn't seem like he wants to move there.

But you're right. Countries with huge amount of debt are becoming so desperate they need every penny to pay for the interest and defence spending. I know Romania is cracking down on tax evasion because of their huge "budget" deficit. Baltic countries need more money for nato and so on.

At the same time, I don't see how it's profitable for tax authorities to go after small fish, because the fines won't be that big and they are harder to catch. If you place yourself in their shoes, going after a tax evading whale is going to pay off way more than some random digital nomad making salary income.

OP is from a European country which means (almost) automatic exchange of data. That makes it in Europe a challenge to get away with things.

In fairness it's not relevant that you dont see how things are profitable for tax authorities or not. The only thing that counts is that they do. Dont forget that small fish are easy to catch as they dont spend the money on proper setups. The whale has the means to fight in court. That is what the tax authorities prefer to not do. Also with small fish it scares of all of the other small fish and that is what they like the most.

Governments dont look at pay off as commercials do. They have unlimited resources (time, money etc) and once you are on their radar, good luck. Their thought process is different.