Advice for creating a new offshore company away from Spanish clutches...

[RaoulDuke]

Hello, everyone, and thank you so much for the help I already received right after introducing myself. After reading many posts in the forum, I realized that this would not be a "one suits all" solution. So, I'm going to expose my case to the best of my ability hoping you can help me.

I tried to find help googling companies, accountants, and law offices. But either they were irresponsive, or the reviews were terrible and shady. Most people complained that you are left pretty much godforsaken after the initial payments and the initial setup.

Information about me:

• I'm a Spanish national and Spanish resident. I do not have any other nationality at the moment. I'm really concerned about how things are turning in my country and I think if I don't do something now, I'll regret it in less than 10 years.
• I own a software company in Spain, LLC, active for ten years now. We do software for hospitals, but we want to move to videogames since it's more lucrative and our team has the skills.
• I want to start a new company, to sell video games. These games will be sold worldwide (193 countries) via digital platforms like Steam, Nintendo, Sony... At some point, we could also sell digital copies, but I have no idea how to do that.
• The digital platforms will collect VAT from our sales and pay it directly to the country that it's owed. So taking care of VAT will not be an issue.
• Since most of the platforms we will use are US Tax residents, the country to incorporate the new company must have no Withholding Tax.
• I have properties (house, land) In Spain. I'm mentioning it because if I run into trouble with the Spanish Tax office, they would seize my assets, starting with my bank account. And also having a plan to protect this, or maybe advice if I should sell, cash it, pay whatever taxes, and move the money abroad.
• I don't mind relocating to another country. Still, It would be awesome to have a structure that allows me to have a new company "hidden" from the Spanish tax office and keep my current Spanish company working.
• (This next point, I know it's hard or impossible or not recommended, but I wanted to ask anyway if there's a solution). It would be great to hire Spanish workers with my Spanish company to develop the videogame for my offshore company. Then with the Spanish company invoice (in any concept), the offshore company to cover the cost of the salaries, plus a little profit to keep the Spanish tax office off my back. I would like to keep my team since it's hard to find good and reliable people. And hiring them as freelancers is something they would probably reject since workers in Spain have a lot of upsides (pension, social security, unemployment...) And being a freelance in Spain only has downsides (high freelance monthly quota, high taxes, lot of paperwork, easy to screw up and get inspections...) So that would be a lose-lose situation.

What's essential for me to:

Low corporate tax (0% would be excellent, but I wouldn't mind having to pay taxes up to 15%)

Anonymity. Even if the solution implies having two companies (Like a BVI company with nominees owning an Irish company - I read this is a bit outdated now, but so you know what I mean). My activity is far from illegal, but it's critical for me that nobody can know who's the actual owner. (unless someone tells on me, obviously.)

Having one bank account away from Spanish court and tax office clutches... I wouldn't mind having two, one for doing business with the company where I'll receive the payments from the platforms, and another one to move the assets and protect them there.

Since I'm not good with legal paperwork or calendars, It would be necessary for me to have an accountant or law office take care of this paperwork and help me not do anything wrong. So a country with almost cero paperwork or a country where it is easy to find reliable accountants would also be essential. All the accountants, offshore incorporating services companies... That I found on the internet, prior to joining the forum, most had shady "good" reviews and really concerning bad reviews.

What's not essential to me:

I don't care about income tax. Since I usually charge all my expenses directly to the company via credit card or bank transfer (restaurants, travel, rent, car...) And if I have a salary, this will be as low as I need it to be and pay the taxes I must.

If I have to move, I'll do it. I also have the opportunity to put the new company in my wife's name (She's Latvian). She told me the Latvian tax office is a baby in diapers compared to the T-800 that is the Spanish tax office.

Well, I think this covers a lot of the information you should know, if there's anything else I can add, please let me know. I want to thank you all for the time of reading this.

 

[Marzio]

Having land, a house, a bank account in your name in Spain while claiming to not be tax resident in Spain will be a very very very difficult argument with the tax office.

So you either sell everything and move or keep your spanish ties and try either the Canary option or Ceuta option.

Since you said you have a team but you haven't said where your team works from, if the team is employed by you and works from Spain, if you move you'll have to form in Spain a branch of the foreign company so that the Spanish team will continue to work for you.

If instead the team is already working remotely or is composed by freelnacers it will be easier to move.

All in all i would suggest you to speak with a ZEC professional because horror story happens BUT it's not the norm and if you do the things by the book i highly doubt you will get in trouble.

You will get in trouble if you go overboard, that's why you need professionals.

If instead you positively want to leave first you need to cut all the ties with Spain and then you could think of moving.

 

[KDX]

That's a lot of text.

"My activity is far from illegal, but it's critical for me that nobody can know who's the actual owner."

Do you mean governments cant know? or just private citizens?

"Anonymity. Even if the solution implies having two companies (Like a BVI company with nominees owning an Irish company - I read this is a bit outdated now, but so you know what I mean)."
Nominees will conceal it a bit but you will still be the UBO. If you want to be as anonymous as one can be, get a 2nd passport and move your residence so there's no CRS indicia

"If I have to move, I'll do it."
Yes, you will have to move.

"I have properties (house, land) In Spain."
Classic strong ties, you might not be able to cut off tax residency because of it.

"It would be great to hire Spanish workers with my Spanish company"
You're walking on thin ice here, you better get a tax lawyer involved. And with this, you might get audited and then your whole "anonymous" company is revealed.

Also, yeah your wife being registered as the UBO would probably help too.

I recommend getting a tax lawyer involved since this seems quite complex. Also the Mentor Group may have some people who can also probably provide some company formation/banking services if you need them.

 

[RaoulDuke]

That's a lot of text.

"My activity is far from illegal, but it's critical for me that nobody can know who's the actual owner."

Do you mean governments cant know? or just private citizens?

"Anonymity. Even if the solution implies having two companies (Like a BVI company with nominees owning an Irish company - I read this is a bit outdated now, but so you know what I mean)."
Nominees will conceal it a bit but you will still be the UBO. If you want to be as anonymous as one can be, get a 2nd passport and move your residence so there's no CRS indicia

"If I have to move, I'll do it."
Yes, you will have to move.

"I have properties (house, land) In Spain."
Classic strong ties, you might not be able to cut off tax residency because of it.

"It would be great to hire Spanish workers with my Spanish company"
You're walking on thin ice here, you better get a tax lawyer involved. And with this, you might get audited and then your whole "anonymous" company is revealed.

Also, yeah your wife being registered as the UBO would probably help too.

I recommend getting a tax lawyer involved since this seems quite complex. Also the Mentor Group may have some people who can also probably provide some company formation/banking services if you need them.

Thanks for taking the time to read it. You cleared out a lot, I'm starting to see that there are very few options. I'll take a look at the Mentor Group. Thanks!

Having land, a house, a bank account in your name in Spain while claiming to not be tax resident in Spain will be a very very very difficult argument with the tax office.

So you either sell everything and move or keep your spanish ties and try either the Canary option or Ceuta option.

Since you said you have a team but you haven't said where your team works from, if the team is employed by you and works from Spain, if you move you'll have to form in Spain a branch of the foreign company so that the Spanish team will continue to work for you.

If instead the team is already working remotely or is composed by freelnacers it will be easier to move.

All in all i would suggest you to speak with a ZEC professional because horror story happens BUT it's not the norm and if you do the things by the book i highly doubt you will get in trouble.

You will get in trouble if you go overboard, that's why you need professionals.

If instead you positively want to leave first you need to cut all the ties with Spain and then you could think of moving.

Thanks again, Marzio. I'll consider this seriously. Since I'm starting to understand that other options might be complicated with my ties to the country. Still, I've seen things that happened to me or to friends of mine, where the Spanish legislation and the tax office are brutal. And the amount of taxes in this country is insane. But as I said, I seriously will look into it. The requisites are simple, the only thing that worries me is when they say "companies of new formation" if me, having a company before that, even if I closed it, would be a problem. And one thing that really bothers me, is that this is well know in Spain, that Canary Islands have this special regime... but barely anyone uses them, except, hotels, bars, and tourism-related business.

 

[Marzio]

The requisites are simple, the only thing that worries me is when they say "companies of new formation" if me, having a company before that, even if I closed it, would be a problem.

That could indeed cause a problem but you could keep your actual company and transform that company in a ETVE holding company and then open a subsidiary in the Canary Islands to take advantage of the ZEC with a new company.

The holding could be used in the future to further expand your business and to let you receive dividends tax free if you'll decide to move from Spain.

But lets stick to the present.

 

[CaptK]

If you set up a company in either UAE, US or UK they will both work for you.

Your wife could set up the UAE entity and you the UK.

UK is purely a payment processor to revive payments and distribute accordingly. Your wife opens the UAE company to receive the funds which you want to keep or vice versa.

 

[KDX]

If you set up a company in either UAE, US or UK they will both work for you.

Your wife could set up the UAE entity and you the UK.

UK is purely a payment processor to revive payments and distribute accordingly. Your wife opens the UAE company to receive the funds which you want to keep or vice versa.

How does one setup a UK company that way that it only accepts payments? UK LLP + dormant LTD? How does the payment/EMI/banking setup go for something like that? Don't FIs get spooked when you have a setup like that?

 

[CaptK]

UK Limited not an LLP is purely to charge a fee to process payment about 1.5%. Then you distribute payments as you wish and the fee that you charge is taxable in the UK after expenses.
Your only liable for VAT if you pass the £82K profit threshold, which means you need to do £8M worth of transactions to be liable.

It’s a very common structure in the UK for people who use outsourced or remote workers.

 

[KDX]

UK Limited not an LLP is purely to charge a fee to process payment about 1.5%. Then you distribute payments as you wish and the fee that you charge is taxable in the UK after expenses.
Your only liable for VAT if you pass the £82K profit threshold, which means you need to do £8M worth of transactions to be liable.

It’s a very common structure in the UK for people who use outsourced or remote workers.

I might have a need for this kind of thing in the future, do you do these kinds of setups? What about the public register, can you use nominees?

 

[CaptK]

I might have a need for this kind of thing in the future, do you do these kinds of setups? What about the public register, can you use nominees?

Yes, it’s becoming more popular with more people working from home, remote workers and people becoming freelance.

I do set these up especially for clients in either developing world or aggressive tax jurisdictions. Your local tax I can’t help with but I’m sure people can sort that out themselves.

One of my other businesses is outsourcing services like account’s, HR and payroll.

 

[Marzio]

I do set these up especially for clients in either developing world or aggressive tax jurisdictions.

Can you explain how this works?

You setup a UK LTD that sells something and then claim 98.5% of that income as expense to shift profits in another jurisdiction?

The LTD is taxed on the 1.5% fee that charges as the "intermediary billinc service provider", is that right?

 

[CaptK]

Can you explain how this works?

You setup a UK LTD that sells something and then claim 98.5% of that income as expense to shift profits in another jurisdiction?

The LTD is taxed on the 1.5% fee that charges as the "intermediary billinc service provider", is that right?

This company is simply an intermediary that connects the service provider to the customer. Call it 1A.

1A connects Customer with Service Provider selling website development. Customer pays 1A for a website plus charges a fee for it.
1A takes their fee and send the balance to the Service Provider.

For example Fiverr.com

 

[RaoulDuke]

This company is simply an intermediary that connects the service provider to the customer. Call it 1A.

1A connects Customer with Service Provider selling website development. Customer pays 1A for a website plus charges a fee for it.
1A takes their fee and send the balance to the Service Provider.

For example Fiverr.com

Thank you Capk. I think a Gibraltar company on my wife's name is the perfect solution. I'll look deeper into it. Really appreciate the input.

 

[uplana]

Anonymity. Even if the solution implies having two companies (Like a BVI company with nominees owning an Irish company - I read this is a bit outdated now, but so you know what I mean). My activity is far from illegal, but it's critical for me that nobody can know who's the actual owner. (unless someone tells on me, obviously.)

obvious you are looking into a setup with darks ( let's keep that for mentor group gold ) or you need a sophisticated setup as many times outlined in various threads already.

 

[RaoulDuke]

obvious you are looking into a setup with darks ( let's keep that for mentor group gold ) or you need a sophisticated setup as many times outlined in various threads already.

Thanks for the answer, but I'm not looking for that at all. I read that in some cases like Panama, you have nominees or something as "heads" of the company, and then then there's a private contract where you are the owner. Sorry I can give you more details I don't know more at the moment.

 

[KDX]

Thanks for the answer, but I'm not looking for that at all. I read that in some cases like Panama, you have nominees or something as "heads" of the company, and then then there's a private contract where you are the owner. Sorry I can give you more details I don't know more at the moment.

You should really just relocate. Either that or you have to go through the illegal route (what you are describing, or darks)

Who do you need to be hidden from? Who can't know who the UBO is? If you are fleeing a 3 letter agency, good luck

 

[RaoulDuke]

You should really just relocate. Either that or you have to go through the illegal route (what you are describing, or darks)

Who do you need to be hidden from? Who can't know who the UBO is? If you are fleeing a 3 letter agency, good luck

Dude, it's way simpler than that, I just don't want the Spanish government to know I'm the owner of that company so they can force me to pay taxes in Spain implying that my "center of interest" is in Spain and not in "whatever" jurisdiction I incorporate my new company. I don't know how much you know about the Spanish tax office, but if you knew how they operate (which is close to a mafia) you'd know that even doing things right, relocating, living in a different country even the whole year, having proof of that (rent, utility bills, grocery tickets...) Even not stepping in Spain once during the whole year... they always find a "reason" to tax you in Spain. And if you don't have leverage or something they can put their clutches on, then you are fine never coming back to Spain as long as your bank account is in a country where Spain can't block it. But if you have properties like it's my case, they can take them and block any bank account I have in Spain until I pay whatever they tell me.

I'm not feeling anything, I haven't even done a movement yet. I'm just trying to see what would be best for me. And my options are, I sell everything I own, pay taxes for it in Spain, then relocate and open a new company wherever I move... and luckily Spain will leave me alone... or I open the company in name of another person of my trust which is not Spanish citizen or tax resident in Spain.

 

[KDX]

or I open the company in name of another person of my trust which is not Spanish citizen or tax resident in Spain.

This is illegal. Just so you know. That's why I recommend relocating and just putting the company on your wife's name so that nothing will be reported to Spain. Making an illegal structure and trying to somehow remit funds back to Spain will be very risky

I sell everything I own, pay taxes for it in Spain, then relocate and open a new company wherever I move... and luckily Spain will leave me alone...

Many people would probably argue this is the only option

 

[luap]

I made the move from Spain myself, to Cyprus. I sold my apartment in Spain and emptied my Spanish bank accounts. Cyprus has a DTA with Spain, and as you're dealing with software/games, you can open an IP Box in Cyprus to pay effectively 2.5% tax (soon will increase to 3%). Lot's of Spaniards in Larnaca.

 

[KDX]

I made the move from Spain myself, to Cyprus. I sold my apartment in Spain and emptied my Spanish bank accounts. Cyprus has a DTA with Spain, and as you're dealing with software/games, you can open an IP Box in Cyprus to pay effectively 2.5% tax (soon will increase to 3%). Lot's of Spaniards in Larnaca.

How much of "Software" does the IP box cover? Only software license/purchases type businesses? Or can it be applied to webapps websites generating revenue through ads etc.?