i was under the impression that having a company abroad is possible no matter what (except some countries where non-residents can't have companies). i think that's a 100% correct statement (it does not matter where you live or what privacy is there or if there's real substance). please correct me if i'm wrong, but i could set up a company almost anywhere, without privacy, without living in that country and without substance - i could do that tomorrow... there are no IFs here...
Yes, it's absolutely possible and fully legal. But that doesn't mean you can avoid taxes where the work is carried out.
The Belgian tax code has rules for permanent establishment and the effective place of management.
Essentially what this means is: "If your company has an office in Belgium, you pay Belgian taxes for profit from that Belgian office."
So you can register your company on the moon: If they find out that the reality is that all the profit your moon company makes is effectively created from your sofa in Brussels, where you sit with your laptop managing an online store, then that is taxable in Belgium, for which Belgian corporate income has to be paid. For the Belgian tax office, it is completely irrelevant what the laws on the moon say. They want to see that corporate income tax. (And if you live in Belgium and you pay out anything to yourself from that company, then personal income tax applies as well.)
If the laws on the moon say: "Any profits from a moon-registered company are taxed 5%" - then of course you will have to comply with those laws as well.
So you would be paying the Belgian corporate income tax of ~30% PLUS the 5% moon corporate income tax.
But IF there is a tax treaty, then there could be a rule like: "It doesn't matter where the company is registered. If all work is only done either in Belgium or on the moon, then corporate income tax shall only be paid in that country."
Which would go both ways - so someone working from the moon could register a Belgian company and only pay 5% moon corporate income tax, instead of ~30%.
All of this changes, as soon as there is economic substance:
Say you've saved some money and you have heard that Belgian food is very hip on the moon. You find a chef who wants to open a Belgian restaurant on the moon, but has no money. You buy real estate on the moon, register a restaurant company and hire him as the manager. You give him some money to hire waiters and buy ingredients and furniture, but that's it. The rest is up to him. Every year, 50% of the profits from the restaurant on the moon are paid out to you in Belgium, the rest is reinvested into the restaurant.
The moon restaurant clearly would only pay 5% of corporate income tax as you are not involved in the daily business. Maybe you fly there twice per year to discuss how things are going, but basically, you just cash in on your investment. For the dividends, you pay personal income tax in Belgium (again, both moon rules and Belgium rules for dividend payments apply - there could be withholding tax on the moon).
But there definitely won't be any Belgian corporate income tax to be paid because no work for that restaurant is carried out in Belgium.
So if you want to use the moon tax rate for your business, you MUST make sure that your business is like a restaurant on the moon, not like an eBay store.
And you must have other reasons for that, except just wanting to save taxes.
For an online store, you could say you want to register the company in Hong Kong to be closer to suppliers in China. But you would need a local director in Hong Kong who needs to be working from a proper office. And you will have to pay a regular salary, probably a couple thousand dollars per month or whatever would be the average salary for such work in Hong Kong.
That's why some people prefer setting up their companies in places like Romania/Bulgaria/Georgia, where wages are low, so it's not so expensive to hire a local manager and an office. But it's still not cheap and you would still have to be able to prove to Belgian authorities that you are not managing the company from Belgium and that all work is done outside of Belgium.
That's the only legal way.
The alternative is to just break the law, set up the company and hope you won't get caught. But that's obviously illegal and can land you in jail.
You're welcome.
