Question Best visegrad country for online business? (Hungary, Poland, Czechia and Slovakia)

[marioIT]

Hi, I've got plenty of friends pestering me daily with questions like this.
Some did the best thing and left EU, but many others like French, Italians and Spanish want to relocate away from their tax hellholes without going too far away from their home country.
So that they can fly back easily on random weekends or when there's a need (usually old parents so they don't want to go too far).
They want to stay inside Schengen zone as they got the freedom of movement and can fly quickly where they want, without all the no-schengen queues and BS like that.

I told them hey, look at Czechia, Hungary and Slovakia. Some of them add Poland, but it's really borderline as many of them don't like going too much up North.

- Do any of you live in any of these countries right now?

0 tax is not a requirement.
We're talking about low tax, low pension contributions and a goverment that don't want to squeeze you, still relatively decent place to live, not that expensive, to bootstrap online businesses (marketing, saas, apps, webdev etc)
Revenue range 50-500k.
They don't want the dubai lifestyle. Just want a decent apartment in the city center, internet, and safety/peace that allow them to focus on growing their business for a few years before relocating elsewhere more tax-friendly.

- Do you believe is still good and safe to live there for such a timeframe(next 5 years)?
- Which country is best business wise? (bank accounts, processors, internet speed, taxes, low bureaucracy, the whole war/gas issue etc)

PS. no LGBT issues, they are all fine with Hungary too, as long as it satisfies their business requirements I stated above.
Later I will add some papers and my opinion.

 

[Marzio]

Take a look at this post from a couple years back.

 

[void]

Slovakia is a tax hell (social and health insurance is applied even to capital gains) and way behind Czech rep.
Czech rep. is great for (especially low profile) individuals and company taxation is also "reasonable" compared to other European countries
don't know much about Poland and Hungary

 

[Marzio]

social and health insurance is applied even to capital gains

Wow that's beyond retarded.

 

[marioIT]

Slovakia is a tax hell (social and health insurance is applied even to capital gains) and way behind Czech rep.

f* hell! that's crazy, didn't know this.

Czech rep. is great for (especially low profile) individuals and company taxation is also "reasonable" compared to other European countries

don't know much about Poland and Hungary

Yeah I had friends many years ago in Czechia. I remember they did ok, wasn't good, wasn't bad but still better than the other EU countries.
It was good for transport companies etc at the time.
But I know many tax laws changed A LOT in these countries during the last 10 years.

In my mind it always ends up in a fight between Budapest, Prague, Warsaw.
I visited all of them, as a tourist, but never had interests for business. So I know their
It's just that Warsaw is way to far for many of my friends. IMHO don't think Krakow is worth, but maybe I'm wrong.

So I always say them it's very likely Budapest(Hungary) vs Prague(Czech Republic)...

Budapest is way much English speaking than Prague IIRC!
But as I said I went there as a tourist not for business...

 

[RealDude]

I am in Wroclaw (Poland) this week. It was part of Germany before WW2. This means that the people here are not as secretive as those further east. The problem is that the current worldwide inflation wave does not stop in front of the Eastern European countries. Poland has currently, for example, an income tax of 19% and the social contributions are capped at about 4000, - € per year. But the value added tax amounts to proud 23%. No one can say how far the taxes in the East will have to be raised in 2023.

 

[Marzio]

Poland has currently an income tax of 19%

There's a lower bracket also: 9% up to 2 millon € turnover.

Poland could be a great choice in case of a SaaS because they have the best developers worldwide tied to Russians.

 

[RealDude]

There's a lower bracket also: 9% up to 2 millon € turnover.

Poland could be a great choice in case of a SaaS because they have the best developers worldwide tied to Russians.

9% coporate tax. income tax and Capital gain tax is 19%.

 

[Marzio]

9% coporate tax, not income tax.

Correct, i misread your post

 

[RealDude]

Poland even has a estonian like tax scheme to choose from.

The only problem is that every polish citizen with an IQ greater than one is fleeing to the West. This also applies to the other countries mentioned.

 

[Don]

Poland even has a estonian like tax scheme to choose from.

The only problem is that every polish citizen with an IQ greater than one is fleeing to the West. This also applies to the other countries mentioned.

A quite popular structure is where someone registered as self-employed in Poland is invoicing the Estonian operating company paying an overall ~8-9% tax. (Estonian company only pays tax on distributed income).

 

[Marzio]

self-employed in Poland is invoicing the Estonian operating company paying an overall ~8-9% tax

How can a self employed in Poland pay so little taxes? PIT starts from 17% or 19% flat tax.

 

[Don]

How can a self employed in Poland pay so little taxes? PIT starts from 17% or 19% flat tax.

not a polish tax expert here. It's quite complex but I know a few guys who claim they pay 8.5%.
I know a Polish tax advisor who is kind of promoting that, happy to share contacts.
Perhaps this can help: CALCULLA - PL: Self-employment/contractor earnings

• flat rate tax - this is the easiest way how the tax can be calculated. In this model, the tax depends only on the incomes (e.g. hairdresser can pay 8.5% tax per each haircutted client). The tax rate depends on the kind of goods or services being sold (industry). In the most cases, flat tax rates are much lower than in other models, but it's not allow to deduct costs (e.g. internet bill). In other words flat tax rate takes into account incomes only and ignores the outgoings.

 

[RealDude]

?revenues from service activities, including revenues from catering activities in the sale of beverages with an alcohol content above 1.5%?

https://calculla.com/polish_lump_sum_tax_by_pkwiu_code

 

[offshore xpert]

Hungary might have a good legislation but you will run into lots of problems with the banks, especially OTP Bank. They will not be helpful at all, so you might want to consider the other jurisdictions as they might have a better banking system.

 

[Marzio]

you will run into lots of problems with the banks, especially OTP Bank.

Which kind of problems? Could you elaborate or better talk about personal experience banking there?

 

[JimBeam]

I'm no expert by any mean for these countries but from what I have read here and from what I know:

Avoid:
- Poland: issues regarding bank accounts being frozen, there where threads on this board before
- Slovakia (tax issue)

To consider:
- Czech Republic - was fairly open and many foreigners had companies there. Seemed easy to open and do business.
- Hungary - low tax (9% CIT)

Hungary might have a good legislation but you will run into lots of problems with the banks, especially OTP Bank. They will not be helpful at all, so you might want to consider the other jurisdictions as they might have a better banking system.

Have you tried to bank with MKB bank there?

 

[MiltonStone]

I say none of them!

 

[12345]

Among these 4 countries Hungary and Chech Republic have lower taxes so I'd choose one of these two
I agree Warsaw, Prague or Budapest offer great value for money in terms of lifestyle and hiring staff

 

[anotherone]

I can add my cents about Czech Republic. Czech Republic was great 7 years ago.
Prague hosts big tech companies: JetBrains, Semrush, Avast and AVG technologies (you may know these companies)
Tax are low but now, there is a problem about a real estate bubble in Czech Republic. Prices are going down and it is more expensive than East Germany (More expensive than Dresden). And real estate prices are going down the pipe. So, no good investments in prague right now.

In Hungary, The conversion of the Hungarian forint is a mess. I tried to find a serious accountant in Hungary to do estimate but I wasn't able to find one. In Hungary, it is still easy to find a great home in terms of Quality/price whether you want to rent or buy.
I wanted to find a good Hungarian accountant to estimate how much tax i would pay under the KIVA status.
So, I contacted helpers and then someone on upwork and they were unresponsive.
So, I was able to name big tech companies located in Czech republic, but now, can we name Hungarian tech companies? No... i don't think so.

Safest choice: Czech Republic, but no prague: Choose Pilsen or Brno.