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Company formation advice needed

dutchboy

New member
Hello

I'm a lurker on this forum and just registered to get some advice.


I am doing affiliate marketing and making good profits 40,000 $ monthly. I live in the Netherlands.

With this amount of money I need a company formation.

What I basically want is:

- To pay less taxes
- Rather not move to another country, maybe Hong Kong. But I think the Dutch Tax Authorities will still try to get their taxes even if I cut all ties.
- Be able to live good



I have researched 2 options:


1. Dutch B.V (100% legit way)

You pay 20% corporate taxes as a Dutch B.V on the profits. The UBO needs to get a minimum salary of 46,000 EU a year which you need to pay income tax over so you keep like 23,000 EU a year of salary. If you want to pay dividend to yourself you pay 25% total taxes on it.

My plan is to keep everything in the B.V and make as many expenses as possible. But the problem is that the authorities will question those expenses. How can I travel with the profits I made? How can I enjoy live with it?



2. UK Limited with IBC

In the Netherlands the UK Limited is a legit alternative to the B.V as of 2003. I found a company in the Netherlands that offers a company formation:

The formation is: Company (Limited) owned by a holding (Limited), the holding is owned by a IBC (Limited). The IBC has a nominee shareholder. The IBC will be sending invoices so there will be no profits.

+ So you don't pay 20% corporate taxes.
+ UBO minimum salary can be 20,000 a year

- still need to pay income tax if I want to take it out of the company unless I move to another country and cut ties with the Netherlands.

I'm not sure if this is a smart formation.





Any advice or suggestions would be appreciated
 

blueweb

Corporate Services
Mentor Group Gold
Elite Member
One simple way but not legal way would be to setup a Cyprus company, owned by a Seychelles IBC which act as shareholder and director of the CYP company as well as UBO. You invoice the B.V company and pay in Crypto to the Cyprus company.

After that, you find a wallet that exchange crypto to FIAT and has a Debit card as well as offer SEPA transfer.

Now you have the tool to get money out.

It may be questioned by your Tax authorities so you better prepare this business model very well and you may even included a tax attorney for the legal part. It's a complicated setup which I we are not allowed to discuss in the public forums, it includes darks if you want to do it right.

I'm sure there will come other replies with more legal setups but less tax-efficient thu&¤#
 

anotherone

Active Member
I discourage you to try the dutch sandwich. I have set up an Irish company and it was a mess. Cyprus is a much better place than Ireland.

In the Netherlands, you pay a lot of taxes as a tax resident anyway.

The corporate tax in the netherlands is not the problem:

Reduction the Dutch corporate income tax rate

In 2019 the corporate income tax rate will be 19% (2018: 20%) on the first € 200,000 of taxable profits (2018: € 200,000) and 25% (2018: 25%) for taxable profits exceeding € 200,000.

In the next years the Dutch corporate income tax rate will be gradually be reduced as follows:

  • 2020: 16.5% on profits up to € 200,000 and 22.55% on profits above € 200,000
  • 2021: 15% on profits up to € 200,000 and 20.5% on profits above € 200,000

The dividend tax is 15% ///
The total income tax is up to 51%
In this context, it is not really helpful to look for the country with the cheapest corporate tax ever because anyways you will a lot in income tax.


I lived near Rotterdam and I vividly remember how rich dutch CEO operated. Their car was owned by their company. But in the end, they paid a significant amount of taxes. I also tested the health system of the netherlands as I had a big health problem. It was really crap. The public hospitals are bad in the Netherlands. So, you pay taxes for a bad health system.

Either you move to another country like portugal and pay 10% income tax during 10 years or you should go for a solution as suggested by blueweb which can't be discussed on a public discussion board.
 

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dutchboy

New member
One simple way but not legal way would be to setup a Cyprus company, owned by a Seychelles IBC which act as shareholder and director of the CYP company as well as UBO. You invoice the B.V company and pay in Crypto to the Cyprus company.

After that, you find a wallet that exchange crypto to FIAT and has a Debit card as well as offer SEPA transfer.

Now you have the tool to get money out.

It may be questioned by your Tax authorities so you better prepare this business model very well and you may even included a tax attorney for the legal part. It's a complicated setup which I we are not allowed to discuss in the public forums, it includes darks if you want to do it right.

I'm sure there will come other replies with more legal setups but less tax-efficient thu&¤#
I discourage you to try the dutch sandwich. I have set up an Irish company and it was a mess. Cyprus is a much better place than Ireland.

In the Netherlands, you pay a lot of taxes as a tax resident anyway.

The corporate tax in the netherlands is not the problem:

Reduction the Dutch corporate income tax rate

In 2019 the corporate income tax rate will be 19% (2018: 20%) on the first € 200,000 of taxable profits (2018: € 200,000) and 25% (2018: 25%) for taxable profits exceeding € 200,000.

In the next years the Dutch corporate income tax rate will be gradually be reduced as follows:

  • 2020: 16.5% on profits up to € 200,000 and 22.55% on profits above € 200,000
  • 2021: 15% on profits up to € 200,000 and 20.5% on profits above € 200,000

The dividend tax is 15% ///
The total income tax is up to 51%
In this context, it is not really helpful to look for the country with the cheapest corporate tax ever because anyways you will a lot in income tax.


I lived near Rotterdam and I vividly remember how rich dutch CEO operated. Their car was owned by their company. But in the end, they paid a significant amount of taxes. I also tested the health system of the netherlands as I had a big health problem. It was really crap. The public hospitals are bad in the Netherlands. So, you pay taxes for a bad health system.

Either you move to another country like portugal and pay 10% income tax during 10 years or you should go for a solution as suggested by blueweb which can't be discussed on a public discussion board.
Thanks for the information. What do you guys think about my option 2?
 

anotherone

Active Member
@dutchboy
Let's imagine that the IBC is a gibraltar company. Imagine that you succeed to open a bank account in gibraltar. At some point you will need to transfer money from Gibraltar to the Netherlands. You will pay the dividend tax 15% on it. but then, you must also pay the social contribution. I don't remember how the social contribution works in the netherlands.

Also, the dutch government may have a list of offshore countries. If you link yourself to an offshore country, if you get an investigation from the tax authorities, it is going to be tough. It is going to be legit but it is going to attract the interest of tax authorities.

I think that maybe it would be worth setting up a UK company owned by a Cyprus IBC. Try to pay as much as 6% of corporate tax in the UK to please the local tax authorities. But then, from the cyprus IBC, you will have to pay yourself, in this case you will pay 15% dividend tax. Then, you must check if you have a to pay social contribution on this money too. Then, you must check if there is such a thing as income tax afterwards.

For option 2, you will also have to keep in mind that you must have 2 general ledgers. You must have your book keeping for the UK company in pounds. You will not be able to open an account at a mainstream bank in the UK because you are not a UK resident. So, good luck for the conversion between euros and pounds. (imagine that you have a euro bank account for your UK company). Then, you need a bookkeeping for your cyprus company.

My advice... Take your time before setting anything.
 

clemens

Corporate Services
Mentor Group Gold
You want to consult a tax advisor locally that can help you so you avoid any troubles with your tax office later on. It may be the best for your situation.
 

dutchboy

New member
You want to consult a tax advisor locally that can help you so you avoid any troubles with your tax office later on. It may be the best for your situation.
Thanks, yes I will be going one soon. They seem to know what they are doing. Will explain my situation there and hope that they can help me with lowering the taxes atleast a bit.
 

Perry8

New member
Also, the dutch government may have a list of offshore countries. If you link yourself to an offshore country, if you get an investigation from the tax authorities, it is going to be tough. It is going to be legit but it is going to attract the interest of tax authorities.
This is something that cannot be stressed enough. If you want to live in the EU (including EEA countries and the UK), you need to adapt your structure to this. Essentially what this means is that you cannot just open an IBC in a "tax haven", while you live and spend your money in EU, and expect the tax authorities to "buy that story".

This is the reason why most EU residents will choose to open a company in another EU country. This is much easier to "defend" as your freedom of establishment is one of the four freedoms in the EU treaty. Granted, your local tax office can, under some circumstances, "re-domicile" your company to your country of recidence. But, they will be much more reluctant to do that with a EU company han an IBC from Seychelles.

You can, of course, use real offshore companies as well, but it requires a structure - not just opening a company.
 

JimBeam

Active Member
Don't get me wrong: but without moving your ass out of the Netherlands - it's pretty hard to get anything that will not get you in trouble. There are so many laws and regulations (google BEPS for example) that are made to prevent this kind of activity... and if they smell something they'll hunt you down and you'll end up in jail (less likely at least not long term) or paying more than you would pay in the Netherlands alone (more likely).

So, my advice is pretty simple: go with the Dutch company and pay all the taxes.

If you expect that your business will grow in next year or two, and you want to move your ass a bit out of Netherlands, there are some options. (PM for a chat - I'm not an sales agent but have some persoanl experience).

Also, my advice is to forget any location within EU (Cyprus, Malta, Ireland, UK...) as it's so easy for them to discover that you have a company there. They know that you're in NL and they'll force you to pay the the dutch tax (even if you paid it there already!) Sometimes they'll even track your cell phone to prove that you have been doing business from NL and that your company was setup in another country just to avoid NL taxes etc.
 
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dutchboy

New member
Don't get me wrong: but without moving your ass out of the Netherlands - it's pretty hard to get anything that will not get you in trouble. There are so many laws and regulations (google BEPS for example) that are made to prevent this kind of activity... and if they smell something they'll hunt you down and you'll end up in jail (less likely at least not long term) or paying more than you would pay in the Netherlands alone (more likely).

So, my advice is pretty simple: go with the Dutch company and pay all the taxes.

If you expect that your business will grow in next year or two, and you want to move your ass a bit out of Netherlands, there are some options. (PM for a chat - I'm not an sales agent but have some persoanl experience).

Also, my advice is to forget any location within EU (Cyprus, Malta, Ireland, UK...) as it's so easy for them to discover that you have a company there. They know that you're in NL and they'll force you to pay the the dutch tax (even if you paid it there already!) Sometimes they'll even track your cell phone to prove that you have been doing business from NL and that your company was setup in another country just to avoid NL taxes etc.
Yeah, I will need to pay those taxes... as I want to continue my life here in the Netherlands. Where did you gain your experience of the Netherlands from?
 

JimBeam

Active Member
Yeah, I will need to pay those taxes... as I want to continue my life here in the Netherlands. Where did you gain your experience of the Netherlands from?
I do have some connections with the Netherlands, but no real experience with Dutch tax system to be honest.
However, some rules apply for many countries (BEPS for example) but the only difference is that you might get unnoticed or get away with it in let's say Bulgaria or Greece but I doubt that you'll get away with it in Netherlands or Germany.
 
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