Advice Needed - Moving my company

Gandalf

New member
Hello everyone!

Hello everyone! I’m looking for advices regarding my travel business. Annual revenue is around 100.000€
I mainly organize and sell tours in different parts of the world, and I’m also the guide of the tours.

I sell these tours online only and currently I am not a travel agency but I want to become one.
Basically I sell a package to the clients that includes: accommodation, food, transportation , entrance fees, activities... and so on during the tour, plus my guiding compensation.

With my job, I’m always on the move and I don’t spend more than three months in the country I’m currently “tax resident” in. Due to the high taxes, the difficulty to open a travel agency/tour operator and all the ademptions in my country, I’m looking to move and become tax resident in a place that would allow me to open a travel company easily and that has a simplified & low tax system.

So my questions are:

-What country would you suggest me to check (I know some countries require 183 days to give you tax residency and that’s not possible for me because I’m always traveling for work)?

- Someone some time ago told me that if you are a digital nomad and don't spend more than 3 months in the same country, you are not eligible to pay taxes anywhere. Any detailed info on that? Because still I guess is important to have healthcares somewhere in the world.lol

-As it is now, if I stay tax resident in my country and open the company in another country with low taxes, my dividends from the company are taxed in the country where I live, so it doesn’t make it really appealing as I will end up paying a lot anyway.
Option 1: I become tax resident where I open the company. (Downside: place where I wouldn’t enjoy spending 3 months)
Option 2: I become tax resident in another country which allows me to have my company in another country (tax heaven or similar) without having to pay high taxes for the personal income from my company.
However which country allows me to become tax residents without spending more than 3 months there and without having my business based there?

Looking forward to hearing your ideas!
 

SaintVince

New member
Check panama permanent residence. Several of my friends set up companies ther, staff Xmas ad got the PR cards. now they declare themselves as Panama residents and dont pay taxes.
 

Gandalf

New member
Check panama permanent residence. Several of my friends set up companies ther, staff Xmas ad got the PR cards. now they declare themselves as Panama residents and dont pay taxes.
Ok I will look into that.

And how does the TAX system in Panama works for an LTD / travel agency? Are there taxes when taking the money from the company as dividend?
Do you have to pay social security as well?

Also do you know if is really expensive to maintain a company in Panama?

Thanks for you help
 

SaintVince

New member
What are the requirements to become Panama residency? any link or name to a trusted firm that can help with it?
Just search for: Panama Friendly Nations visa.
costs are around $4k/person or $8k per family of 2 adults and 2 kids.
this includes all paperwork, getting Corp set up and permanent residence status.

the whole process can be done by yourself, or you could research a reputable company and get them to do this for you.

if you are from the country that is not a friendly nation, it is still possible to do this but you will also need to get visa to get to Panama first.
 

JimBeam

Active Member
Depending on where are you located and the passport you have, Cyprus might not be a bad idea. You can get tax residency there in 2 months (if you don't stay in some other country 183+ days). You will pay 12.5% CIT tax (or 13.75%) but after that you can pay yourself dividends without any additional. If you can make some tours there during the summer or if you can stay there 2 months during the winter and it's done. Still your company will be in EU you will have access to SEPA. Running the company is not that cheap but once you're in there you can probably find cheaper services than online (for eg. we pay the accounting and auditing about 2-2.5k/year but you can probably find that cheaper once you're there).
 

pippo

New member
There's surely some better adivce around, but here's my 2 cents.

Ireland has a hassle free procedure for you to setup a travel agency. In case you do not offer any travel to, from or through the Republic of Ireland, you can pretty much incorporate a ltd company there and call yourself a travel agency the day after.

Google it, you're going to find all the info easily.

About residency in Ireland, I'm in a similar situation. If you are in the mentor group you may follow my recent topic.
 

Gandalf

New member
Depending on where are you located and the passport you have, Cyprus might not be a bad idea. You can get tax residency there in 2 months (if you don't stay in some other country 183+ days). You will pay 12.5% CIT tax (or 13.75%) but after that you can pay yourself dividends without any additional. If you can make some tours there during the summer or if you can stay there 2 months during the winter and it's done. Still your company will be in EU you will have access to SEPA. Running the company is not that cheap but once you're in there you can probably find cheaper services than online (for eg. we pay the accounting and auditing about 2-2.5k/year but you can probably find that cheaper once you're there).
I have an European passport.
But looks really hard to get the permit for becoming a travel agency

Also my country requires to have an office and home for the entire year to be "legal". Do you know approximately the price for each one per month?

Thanks for you help!
 

Gandalf

New member
Which countries do you organise tours to ?
Which countries are you in most often?
Well at the moment I'm in my home country for about 3/4 month per year as I come back here after every trip.
I spend less then 3 months in all the other countries that are places that vary from South America to North Europe etc.
 

Gandalf

New member
Just search for: Panama Friendly Nations visa.
costs are around $4k/person or $8k per family of 2 adults and 2 kids.
this includes all paperwork, getting Corp set up and permanent residence status.

the whole process can be done by yourself, or you could research a reputable company and get them to do this for you.

if you are from the country that is not a friendly nation, it is still possible to do this but you will also need to get visa to get to Panama first.
Do you know the taxation in Panama?
I'm sure my own courtly will keep me under the radar too much if I move to Panama.
 

Gandalf

New member
There's surely some better adivce around, but here's my 2 cents.

Ireland has a hassle free procedure for you to setup a travel agency. In case you do not offer any travel to, from or through the Republic of Ireland, you can pretty much incorporate a ltd company there and call yourself a travel agency the day after.

Google it, you're going to find all the info easily.

About residency in Ireland, I'm in a similar situation. If you are in the mentor group you may follow my recent topic.
Unfortunately I'm not in the mentor group!

Really good to know that about Ireland as it will be exactly what I would need.
Just a question, do you have any idea of how much time I need to spend in the country to become tax resident?

How much does the tax system work?

Cost for house /office should be really high there, correct?
 

pippo

New member
Depends on what you consider "high".
90€ a month for a tax advisor
600 € a year for company address + secretary
Roughly 400€ a month for a room for rent, 1k for a house, OUTSIDE DUBLIN ;-)
 

Gandalf

New member
Depends on what you consider "high".
90€ a month for a tax advisor
600 € a year for company address + secretary
Roughly 400€ a month for a room for rent, 1k for a house, OUTSIDE DUBLIN ;-)
That doesn't sound too bad.
The only problem for my home country is that my office need to be my alone otherwise that will be sufficient proof that I'm trying to pay less taxes and evading.

Even tho sounds crazy!

What's the taxes for LTD?
Taxes on dividends ?
 

Gandalf

New member
Thanks everyone for the suggestions, I’ve been doing some more digging myself and in the end I’ve thought about the following possibility.
Setting up a tour operator company in Estonia

Becoming tax resident in Cyprus, under the 60-day rule
If my thinking is correct, Estonia should not tax my dividends, and Cyprus should only ask me to pay 12.5% on my dividends.
What do you think?

Why not opening the company directly in Cyprus? Because it looks like it’s not that easy/fast to get the license to open a tour operator, they require several years of experience in a travel agency, a degree in tourism or a test. While it looks that Estonia only requires me to pay a fee to be tour operator.

However I want to hear what you think about the way I’ll be taxed and if I’m correct. Will my dividends be taxed in Estonia or just in Cyprus?
Looking forward to hearing your thoughts
 

Gediminas

Offshore Tax Advisory
Mentor Group Gold
Commercial Service
Business Angel
Hi,

The income of the Estonian company is not subject to tax as long as they are not distributed. When they are distributed in the form of dividends Estonian corporate income tax is applied. So much better from your mentioned options is the Cypriot tax residency and Cypriot company. Total tax rate (including company level and individual level) would be 12,5%.

Moreover, if you are a tax resident in Cyprus you might also set up a Maltese company where the effective tax rate is 5%. Dividends received from Maltese company would not be taxable either in Malta (with WHT) nor in Cyprus.

I hope this helps. ;)
 

Elve

Active Member
If I am not mistaken in Cyprus, it only pays taxes on what is remitted in the country as in Malta, in this case it will not be much if you pay taxes only on your expenses in Cyprus (only 60 days per year).

All your expenses during your trips could be considered expenses of the Estonian tourism company and then not pay taxes either. Taxes would be optimized by the fact that you do not need to distribute much dividends and keep your savings in the Estonian company.
 
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