Estonia being marketed as 0% tax is one of the biggest scams in this industry. It's true until it's time to distribute profits. Then you're facing a potential net 25% tax bill. Sure, it might say 20% on distribution but if you read the fine prints, you'll find the 20/80 rule. There are use cases for Estonia, though, of course.
Oh, how utterly pedestrian that Estonia remains an enigma, especially in forums such as this, regrettably overshadowed by the predominant Cypriot legal intelligentsia, leading to an inevitable predisposition in favour of Cyprus. While I too indulge in promoting Cypriot legal expertise, I'm not so one-dimensional as to allow misconceptions to persist unchallenged. In fact, the opposite of what you have said is true. If you read the "fine print", you'll find that it's possible to reduce tax to 0%. It should come as no surprise that these refined intricacies might very well surpass the comprehension of the average mind though.
When it comes to use cases of Estonia and Cyprus, it's worth noting that actually, one of the best use cases is combining both Estonia and Cyprus.
Example: Estonia as an operating company. Cyprus as a holding to exit the company tax-free and rewarding shareholders with low effective tax profit distributions that could result from IP assets structured under the IP box regime.
Alas, for those with a cultivated appreciation for the finer nuances of international tax expertise, it remains a tragically elusive commodity, particularly in those lesser nations. This scarcity is further exacerbated by tedious impositions like DAC6, which, regrettably, dampen the enthusiasm of many a distinguished advisor from openly promoting cross-border structures, given the onerous duty of divulging such strategies to the tax authorities. Such is the lamentable state of affairs for professionals in this domain. Consequently, we are left to seek solace in but a handful of distinguished sanctuaries, like the venerable online forum, OffshoreCorpTalk. Here, one may delicately discourse upon these stratagems whilst judiciously preserving the cloak of anonymity—a luxury in such brutish times.
Estonia's fiscal framework, a detail that connoisseurs would no doubt appreciate, has been the very epitome of stability for over two decades. Indeed, for the past nine years, it has earned the distinction of being the most sought-after OECD jurisdiction from a tax standpoint.
This laudable recognition stems from four notable attributes of its tax regime. To initiate, there's a 20 per cent tariff on distributed corporate profits, while undistributed profits remain tax-free. Subsequently, a commendable flat 20 per cent duty on personal income, notably abstaining from personal dividend proceeds as an example of exemption. As a third highlight, its property levy focuses purely on the intrinsic worth of land, artfully avoiding the pedestrian assessment of tangible assets. Fourthly, it has a territorial tax system that exempts 100 per cent of foreign-taxed profits earned by domestic corporations from domestic taxation.
To conclude, Estonia boasts an impeccable fiscal framework befitting those with a discerning palate. While it does exhibit certain modest imperfections, one can; with a touch of adroit cross-border structuring, transform it into an outstanding instrument for boosting capital growth - Quite the sophisticated endeavour, I dare say.
I am about to sell (once again) a 5 figures Digital assets from my company.
It's basically a chunk of money that will be heavily taxed here in Canada at the end of the Corporate financial year since it's all profit.
I want to move out of Canada ASAP and get these money into the new corporate account of a country with zero or very low corporate Tax.
The country must be a legit country with a good name, not Cyprus, Bulgaria, Romania and so on... those are not accepted by the Escrow
payment system I use to transact large amount of funds with the buyers.
Is there any country that is relatively cheap (less than 5,000 USD) to incorporate a company and open a Business bank account?
Dubai I heard it's now 9% corporate tax and it's not very cheap to open a company and a bank account takes a long time plus you have to fly there.
Perhaps you could move the software rights to an entity in Estonia as a non-monetary capital contribution. It should be feasible with the indicated budget if structured right.
If you later sell the software at the same price as the valuation of the capital contribution, it could be structured with effectively 0% tax on the Estonian level.
Company, banking, etc., - all can be set up remotely.
You should ensure you can get away without paying tax in Canada on such a move though, which at first glance seems a bit complex.
