Company in EU, IT and consulting services in fr

[georgio]

Hello all,

I'm an EU citizen (no tax-free country), and have some clients in France, providing consulting and IT services. I also have had some UK clients in the past, and I have some (very) small revenue from mobile apps worldwide. Currently, I have a UK company, which is normally paying its taxes. However, the dividends were not declared to my EU home country (where I'm still a resident).

Recently my UK business account (Revolut) has been "semi-frozen", meaning that I cannot transfer any money to other personal bank accounts and EMIs (only to my personal Rev). Their support is not telling me what's going on, but I've managed to withdraw most of the funds.

My plan after Brexit seems to concentrate more in France, and I need to see my clients there quite often at their offices, as they're big corps (so 6-9 months/year spent there, then my home country and traveling), and trying to build an offshore agency of developers that can handle projects there. Also trying other projects aside e.g. mobile apps or saas (currently no big profits from it).

Some of the options I'm considering:
1. Have a normal French company and declare a resident in France (lots of social contributions).
2. Have a company in Malta or Cyprus or other, and rent a flat there, charge my clients from this company.
3. Have a French company to charge my clients, and a company in Cyprus etc. that will charge the French company. Use a nominee director for it, or rent something there and become a resident.

What are your thoughts on that? Anybody experienced something similar, or have an idea?

Cheers

 

[Marc Jacob]

Hey Georgio, the french taxation can be very tricky as you know... why don't you try to combine two types of companies - EURL (for issuing salaries) in addition with a EU or US structure for optimizing a part of you incomes and for onboarding non-french customers ?

 

[georgio]

Hey Georgio, the french taxation can be very tricky as you know... why don't you try to combine two types of companies - EURL (for issuing salaries) in addition with a EU or US structure for optimizing a part of you incomes and for onboarding non-french customers ?

Hey Mark, it is indeed.. a EU or US structure as a French resident? From what I know you have to declare your worldwide income as a french resident (plus bank accounts)..

 

[Marc Jacob]

Correct, as a french resident you have to declare your worlwide incomes and foreign personal bank accounts or business accounts which are located in a jurisdiction classified as a tax heaven (you can refer to the list of the EU), note that there's not such requirement for business accounts within the EU and for "onshore" jurisdictions, therefore the taxman may ask you to proof that there's substance and an independant management (meaning that the decisions are not made from France) in your foreign company.

 

[Marzio]

Why not creating a Swiss branch of your UK LTD where you are the non-resident director residing in Geneve? Corporate income taxes in Geneva from 1 january 2020 will be 13.99%

You could use the branch exemption option so nothing will have to be paid in UK, you will charge your French customers from the Swiss branch and from Geneva you are 15km from the French borders.

 

[KJK]

Why not creating a Swiss branch of your UK LTD where you are the non-resident director residing in Geneve? Corporate income taxes in Geneva from 1 january 2020 will be 13.99%

How exactly would that work? "non-resident director residing in Geneve"?

I'm not sure whether OP is actually French or French resident.
He mentioned he is from "my EU home country" and that he wants to "concentrate more in France"...

If he's indeed French resident, then having a Swiss company probably won't help him that much. Though it's probably better than a French company.

 

[Marzio]

How exactly would that work? "non-resident director residing in Geneve"?

I'm not sure whether OP is actually French or French resident.
He mentioned he is from "my EU home country" and that he wants to "concentrate more in France"

The UK LTD will have the non-resident director meaning the director will not be UK resident.

The UK LTD director will be the director of the swiss branch of the LTD hence will get the residency permit to live in Swiss and get taxed both on corporate level and personal level.

It doesn't matter if he is French or is residing in France, when he will move to Swiss will be taxed there.

Then he will have to calculate how many days he could stay on France (probably up to 182 days) without getting taxed there.

 

[georgio]

The UK LTD will have the non-resident director meaning the director will not be UK resident.

The UK LTD director will be the director of the swiss branch of the LTD hence will get the residency permit to live in Swiss and get taxed both on corporate level and personal level.

It doesn't matter if he is French or is residing in France, when he will move to Swiss will be taxed there.

Then he will have to calculate how many days he could stay on France (probably up to 182 days) without getting taxed there.

Thanks for the insight, why setting up a swiss branch, and not directly a company there?

 

[Spinat]

Thanks for the insight, why setting up a swiss branch, and not directly a company there?

I would like to ask the same, it sounds to me much better to setup a company entire seperately.

 

[Marzio]

If you have 20.000CHF to shell out to form a SAGL then go for it. A branch only needs 1000CHF to be opened and also retain the prestige of a LTD company.