€700K - Where incorporate and live as digital nomade

Hello Friend!

So as I understand, you would also opt for the safest way and incorporate the LTD in my home country, correct?
If it is about a 5-15% saving from taxes, I do not think it is worth to explore some offshore solutions. As long as I do not sell the assets of the LTD (so that I will have to pay huge dividends or continue to pay myself a salary) I can still have similar benefits with rental income as Director of the LTD, right?

Q1: What about if I get married? If my salary is just as Directory a potential unemployed husband will not be able to get aliments from me even if the real money is in the LTD?
Q2: What about if someone sue me for some personal reasons? The assets will be protected as they are in the LTD, correct?
Q3: My consulting business LTD will not have any big risk and the liability is covereted by the insurance. Would you also do a LTD for the Real Estate business as well to make sure those assets will be untouchable?

Thanks

 

7. buy/rent a house (via third party) in Vienna, live your life there, but be 'based in Slovakia' for all administrative means.

 

Q1: If so, he will be able to get aliments based only on your salary, not on the assets of LTD. In the case of divorce, a general rule is that only a wealth accumulated and created in marriage is subject to divorce settlement. However, many variables plays a role. Who applied for divorce, kids, cheating, if he became sick / disabled during the marriage. There can also be a major shift between what I know from my experiences in my country and the law in Netherlands (I am not an expert). The only real protection is to have assets offshore OR to have prenuptial agreement, which is exactly what you should do. It is 2019 and a normal thing to do.
Q2: No, if you will owe money on a personal level, then a debt collector can go after your shares in the LTD. Normally, they can access only your shares and its value when you bought them (LTD was created), which could be only couple euros (depends on the amount of shared capital). However, if you are the only shareholder and the only director, it can result in liquidation of the company. This will also depend on laws in the jurisdiction where you incorporate.
Q3: You can use your consulting LTD as a holding and funding vehicle company for other LTDs where you will own properties (across Europe or in NL). Personaly, I would create a new LTD company for each property, from three reasons.
1. If you will rent all properties through a single ltd you may reach the VAT registration threshold, therefore an obligation to charge your tenants VAT, which can result in a lower profit for you or lower attractivity of your properties on the real estate market for tenants. If you will continue in consulting business in the future (perhaps for some EU customers) the likelyhood of reaching the VAT threshold is even higher. It is fair to say, that the VAT threshold in Netherlands is now relatively high (80k eur), but is expected to go lower very soon bc of push from the EU.
2. If you will have each property in a separated company and you will decide to sell, you can try to sell not the property, but the shares of the company. If the potential buyer will be a corporate entity or just a smart guy who wants to avoid 6% real estate transfer fee, you can make this (actually, I am also looking for such property/company). If you will sell the shares of the company and not the property in the company, it will be treated as capital gains for the holding company (0% tax).
3. If you will not manage to sell through the option in the point 2. you will sell normally, then is essential to have a property in a separated entity. You want to have most of the value of asset taxed through the lower tax bracket. Also, it is easier to do tax optimization through more entities from rent income (that is where you can reach me out and I can help to cut your cpt + directory salary taxes).

Hello, If you need someone to help with SK LTD + UAE FZE setup, try to google in slovak language "starting offshore companies", there is quiet a few companies doing so. It is not my job, I just do have this UAE FZE setup by myself. Dividends 7%, not problems so far. With Cyprus non-resident I would be more scared tho (only through Malta office it is bulletproof). Maybe try to ask some agents here on the forum (perhaps in the mentor section).

Admin, and what exactly they should do?
Lets say you own 25% of some REIT based in BVI, which you bought on the stock exchange or out of the stock exchange as a slovak tax resident. You receive dividends... now they should demand from you to pay CPT on profits the BVI company have made bc of suspicion that effective management happens in Slovakia? Same it is with the UAE company. They do not know where the actual business is happening, what is the actual business or if you do not pay 100 employees in the UAE to do and manage the business. In the case it gets to the court... they have to prove to you that effective management was in Slovakia, not you to them that it was in the UAE.. There is no need to overesteminate tax authorities. Ladies there work for 450 eur, by and large do not speak english, and they struggle to settle things when you change an address of the local ltd within the country, not complicated foreign structures. Skilled ppl they have focus more on VAT, bc 25% VAT-gap is more valuable than your few hundred k you cash (and actually pay taxes on) through dividends.

 

2019 atad / cfc?

 

Hello Friend,

A few follow up questions:

Q1. If a future husband will make lets say 2x times my income as Director, will I have right to get some aliments from him even if the properties are in the LTD?
Q2: Are you sure the company will be liquidated? As far as I know if there are no assets debtors attack the salaries (above certain min. Level guarantee by Law)
Q3. So you would suggest to open 2 LTD, one LTD as container (Holding) and another one as controlled LTD which include all properties.
I think 1 LTD + 1 LTD makes sense, there are some fixed min. Expenses for every LTD and also tax advisors are returns will cost approx 2000 EUR per LTD (2000 EUR x 3 LTD + Min Fees approx 10000 EUR).
Q4. Is there a possibility to open the LTD once I have collected a certain amount of money? I want to make sure those clients will pay me all my money so that this holding structure makes sense.

Is there anything you would consider before going for this root?

 

Hi

For your initial question, take a look on Montenegro.
9% tax
no tax on capital

regarding invest into real eastate I would suggest croatia, serbia or romania.

Switzerland / Liechtenstein has it benefits too, but as you write self it will not allow you to invest in real estate with your profit, but it would solve all regarding your "husband" Issues.

I'm not sure if above proposed setups really match with your profit. Leave it lean and avoid troubles

 

Hello,
Q1. I doubt, because the court will see in divorce settlement all your assets, so even the value of shares you own. It is like asking for aliments bc of lower income, but at the same time have 10% of shares in the Cocacola company. However, if his income would be like 1 mil eur / year and all your assets would be around that sum as well, then you can get it. My strong guess is, that if he will have this kind of income, he will come with the prenuptial agreement as the first tho.
Q2: I am not sure, if you are a sole shareholder and a sole director, they should have access to all assets of LTD.
For Q1 and Q2 I am not sure, ask some professional on Dutch law.
Q3: 1 One LTD as holding / consulting and for EACH property create a separated company owned by a holding company. If you decide to sell, I doubt you will find a buyer willing to buy all properties/shares at once (in one company). You will sell one company / one property. Dutch LTD are not expensive and maintaining should not be that expensive as well.
Q4: Yes, but you can create invoices only from the day your LTD is ready, so make sure your clients will be ok, if you send them invoices later. Then, you will just transfer the received payment from your bank account (or whatever account) to your corporate bank account. If you need to act fast, buy a ready-made company.

Regards

 

My situation isn't that different, but not so close that I can give direct advice. Just one: do not invest your money in the country where you'll become a resident.

 

Hello friend,

why?

thanks,

 

You don't want to put all your eggs in one single basket...

 

All:

I have a question:

Hometown (25% Corporate Taxes + 25% Dividend).

If I get all the money in my hometown LTD, I will be paying 25% and I will use the entire capital to buy properties. After that I will get approx $30K/$35K from rental income, this will be my personal Director Salary so that the LTD will be left without any income AND deduction / ammortisazion of real estate investments + fixed min. corporate taxes (approx $1.5K per year).

Pros: No need to move or change my life
Cons: High Corporate Taxes, High Dividend if I decide to sell


Romania (1% Taxes on All Income + 5% Dividend + 2x min. required local Employees cost (approx 4,000 EUR x 2))

As you can see there is a 24% saving with this option, approx 20% after the cost of the two employees as well.

Pros: Tax Saving, Low Dividend
Cons: Romania is a corrupted country, need to move there for 6 months, etc



Question:

1) When do you think it would be worth to move there and change my whole life to save this approx 20% corporatd taxes?? From $100K?$200K?$300K? Saving? More or less?
2) Also do you think I should care about the dividend taxes as well? My aim is to get an income with the structure I mentioned above, I am not sure if this is relevant (to consider the amonut before and after dividends).

 

Cyprus is not a bad option for a residency. Basically you need a permanent place to stay + health insurance + proof of a decent salary/assets. Not long ago I became a resident. The process was not difficult. With a bare bones immigration insurance it costs me less than 200 €/year. The main benefit for a digital nomad is that you only need to stay two months/year there to maintain your tax residency (but you can't stay in any other country over 6 months/year).

Other pros/cons of Cyprus: OK climate (summer months are too hot), also it is very safe. Everybody speaks English. The public transport is weak, so you most probably would need a car. Moreover, they drive on the wrong side of the road here (unless you are from the UK).

I wouldn't necessary purchase real estate in Cyprus (high-ish prices vs. mediocre quality). Rather I would have my residency and investments in separate countries, for diverisfication and privacy reasons. This may be difficult to accomplish with real estate investments - at least you need a good local management company to take care of the tenants etc.

Georgia vs Cyprus: Georgia has more beautiful and varied nature, and more interesting food culture. Unfortunately their language is truly impossible. Outside Tbilisi/Batumi your language options for communicating with people are Georgian or Russian. Georgians are suicidal when driving a car.

I lived in Sofia, Bulgaria for one year. It is not a bad country, but not a memorable place either. As a foreigner you likely won't see corruption. In a few years it probably becomes a member in eurozone. As far as residency goes, there are better options. Taxation isn't bad, though.

Thailand, Cambodia, Malaysia, Philippines... Interesting, but only in small doses. Despite favorable taxation, I would not want to live long-term in those places, but everyone has their own preferences. Especially I wouldn't touch real estate in SE Asia.

 

Thanks so much, you seem to be really expert. Can you give me a suggestion in regard to my last topic I have asked? Thanks!

 

Sorry for spamming your thread. My reply was off-topic. I don't have much to contribute on corporate structures. I try to avoid them just to keep my life simple and overhead low. It could be I'm wrong.

I uprooted my life from a North European country in 2014. I figured I could travel the World and finance it by skipping to pay capital gains taxes. Back then I had slightly less capital than you'll have at the end of next year. It was a right decision and I have been very lucky thereafter, but people's situations vary. If you have good friends where you live now, moving to e.g. Central/Eastern Europe will make you feel poorer, even though you're making more money.

If I was happy where I am, and had 700K gross income coming, I would not uproot my life for e.g. 100K total savings. If you can earn extra income online (besides your projected rental income), or you have something to fall back on in your home country in case things fail, moving out is so much easier.

If I were you, I'd also look into the "Non-habitual resident" program of Portugal. It gives a 10 year tax amnesty to many kinds of foreign-sourced income.

 

I find it hard to believe that you'd fit everything (rental apartment, bureaucracy; possibly flights and insurance) into 200€ per month.
That sounds really strange, I'm not saying impossible but most companies dealing with such situations would offer you something many times more expensive.

So where's the catch? Are you really officially a resident? What taxes apply in your situation?

 

Obviously rent is not included. I do not consider rent to be a part of residency costs, as I would anyway have to live somewhere. Likewise with flights, food, car, utilities, telephone etc.

My bare bones, cheap ass immigration insurance was 150€ and the fee at the immigration bureau 20€. You can get a lot better health insurance for 600-800€, but I did not see the value there. Some of those insurances require you to stay e.g. 8½ months/year in Cyprus, which I find too restricting. For time spent outside Cyprus, travel insurances are cheap, around 1€/day.

Those who have a Cyprus company can pay themselves minimum salary and become part of Cyprus social security system. I will go that way if I decide to set up a company.

 

Hello Friend,

The difference in corporate taxes would be exactly $150K over 3 years (Romania / Hometown). The dividend difference would be around 20%. What do you think about it? If I do not plan to sell the properties the only difference is basically the approx 20% (150K) in corporate taxes.

If I make the LTD in my home country, apart from my salary as Director, what would be other expenses or investments I could decrease from the LTD Gross profit? I was thinking about a $40K Doctorate Degree which could be decreased in full.

 

I have been in Bulgaria and I have been in Cyprus - I have no doubts where I want to live but we are all different. For me Sun and Water in the frontline is what I'm looking for and I love Greece.