CY resident + Romania micro company

[metronic]

hello guys,

I am in the process of moving to Cyprus this month and I was wondering about the Romanian micro business as it suits my business and the talent pool I need for it.

I wanted to ask about cfc rules in Cyprus that could apply to it. I would have a company in Cyprus as a holding company that would own the Romanian micro business but that’s not needed if you guys think that just keeping the Romanian micro company separate. I am planning to also hire in Romania under the company and have an office there. would this company be subjected to taxes in Romania or Cyprus? I spoke to an international tax planner and he said as long as people who do the work are hired and management/control is there it should fall under Romanian tax regime.

I would be paying myself in dividend of course as non Dom and the owner of the Romanian micro company and I am aware there is some withholding tax that might apply to that.

so to sum it up: Cyprus holding - Romanian micro business with employees , centre of control/management and a permanent address for business

if there is anything I missed or you guys want to add feel free to do so

I appreciate all the help and recommendations!

 

[TheoG]

If you have a Romanian registered business/company you can either expand by creation of rep.office or subsidiary of this entity as a holding. Taken that a subsidiary belongs to the same group structure (same owner and business) and depends from substance and activities different tax implications may vary and this requires a tax planning structure. You should speak with tax planner in Cyprus too. Also depends from your Bod members and tax residency type.

 

[orangekangaroo]

Why not move your residency to Romania, you will get taxed 1% on turnover of Micro company. Cyprus Holding company is 100% owner of the Romanian company and you can receive a dividend at 0% withholding tax. Let the divi accumulate in the holding company, if you need some it will be taxed in Romania at 5%.

 

[metronic]

Why not move your residency to Romania, you will get taxed 1% on turnover of Micro company. Cyprus Holding company is 100% owner of the Romanian company and you can receive a dividend at 0% withholding tax. Let the divi accumulate in the holding company, if you need some it will be taxed in Romania at 5%.

Due to 60 day rule, I travel a lot so it suits me perfectly. Can still have biz in other Eu country as a Eu citizen... of course I plan to create a substance (not sure if it would be as easy without it)

 

[orangekangaroo]

Romania excepts tax residency by domicile or by making it the centre of your living. Not difficult when you run a business from there. You can still travel, without having to be there 183 days. I have considered similar options as yours. It is all where you want to be as well. Having lived in Malta for 3 years, I am not so keen on island living. Although 60 days might be doable.

 

[metronic]

Romania excepts tax residency by domicile or by making it the centre of your living. Not difficult when you run a business from there. You can still travel, without having to be there 183 days. I have considered similar options as yours. It is all where you want to be as well. Having lived in Malta for 3 years, I am not so keen on island living. Although 60 days might be doable.

Did you pick romania now ?

 

[orangekangaroo]

Did you pick romania now ?

Going as soon as Covid-19 restrictions allow me to.

Romania micro company with Cyprus Holding company is 2 to 4% tax (includes the cost of Cyprus corporate holding structure).
Whereas Cyprus company for employment to get non-dom status and the fact that initially the micro company in Romania might be seen as a PE and be taxed at 12.5% in Cyprus, put me off.

 

[metronic]

Going as soon as Covid-19 restrictions allow me to.

Romania micro company with Cyprus Holding company is 2 to 4% tax (includes the cost of Cyprus corporate holding structure).
Whereas Cyprus company for employment to get non-dom status and the fact that initially the micro company in Romania might be seen as a PE and be taxed at 12.5% in Cyprus, put me off.

you actually moving to Romania or employing some people ? as from what I know you need something there so that your country of residence doesn’t try to tax it. in my case I have Cyprus holding and will do Romania micro with cy residency and still achieve 2-4% since I’ll have substance in Romania

 

[orangekangaroo]

Yes, I will move to Romania and employ people to built substance, I will need quite a bit of staff so can't be too hands off at the start. Cyprus holding company is there to collect Divi.

Your construction could work fine as well once you have substance in Romania and the place of management is not seen as being in Cyprus.

 

[metronic]

Yes, I will move to Romania and employ people to built substance, I will need quite a bit of staff so can't be too hands off at the start. Cyprus holding company is there to collect Divi.

Your construction could work fine as well once you have substance in Romania and the place of management is not seen as being in Cyprus.

yeah it won't be since I’ll have people in place there, actual workers not just some lawyers acting as directors lol. the only downside is you end up paying higher % in the end as it goes off revenue but still better with banking and everything. main thing is banking for me there because I don’t really trust banking and issues with it here in Cyprus

 

[andrewb]

Hey guys,
Need any help or advice from a Romanian citizen ?

 

[orangekangaroo]

Hey guys,
Need any help or advice from a Romanian citizen ?

Do you know of any reputable company formation providers in Romania?

 

[andrewb]

Do you know of any reputable company formation providers in Romania?

Search for an accountant , they can do it in your behalf, if you hire a company that you find it on google, will charge you triple. An accountant can open for you a company with less than 250/300 eur. but keep in mind that somebody needs to be administrator, with romanian residency. What citizenship do you own ?

 

[orangekangaroo]

Search for an accountant , they can do it in your behalf, if you hire a company that you find it on google, will charge you triple. An accountant can open for you a company with less than 250/300 eur. but keep in mind that somebody needs to be administrator, with romanian residency. What citizenship do you own ?

I have EU citizenship. I plan to move to Romania, but with pandemic everything is delayed a bit. I want to set things up beforehand.

 

[andrewb]

You cannot setup beforehand nothing , until you go to a notary and empower a company/accountant in order to register any company in your behalf

 

[ilpablo]

Hey guys, I'm thinking to do the same move.

Are you really relocating in Romania full time or as I read in a post above are you planning to travel then?

In this case it might be interesting to share some experiences and maybe also expenses.

I found two very good company formations.

They asked me 500 for the residency and company formation and around 60/70€ a month for the accountacy fees.

Do you have any experience with the beaurocracy behind running a company?

I got used to the Uk heaven, which i'm a bit afraid to live.

For this reason, in your opinion, it could make any sense to keep an LLP uk as a trading company and the Romanian SRL that pay the taxes before you get your own dividens?

 

[orangekangaroo]

Good to see more people interested in Romania option. I am planning to go next month. Covid dealt me a harsh blow physically. Recovering and as soon as energy levels up I will make a move.

 

[ilpablo]

Good to see more people interested in Romania option. I am planning to go next month. Covid dealt me a harsh blow physically. Recovering and as soon as energy levels up I will make a move.

I'm sorry to hear that! I can understand you very well and I hope you will come back stronger soon!

Have you already considered in which city would you move? I'm thinking about Timisoara, nice place, cheaper than Bucarest, good flights connection and closer to central europe.

Btw I just started a thread on this topic, and would be great if you can contribue with your thoughts.

https://www.offshorecorptalk.com/th...romania-vs-bulgaria-is-the-final-match.33945/

 

[orangekangaroo]

Part of my Visit is also finding where to stay. I will avoid Bucharest but thinking of Oradea, Timisoara and Brasov. The latter would give me some skiing, snowboarding options.

 

[fabyoga]

Part of my Visit is also finding where to stay. I will avoid Bucharest but thinking of Oradea, Timisoara and Brasov. The latter would give me some skiing, snowboarding options.

Cool! I am also planning my move to Romania with a similar setup! Have you consiedered Cluj? It is quite a nice city, compared to Bucharest. But has lots of universities, international companies and an airport with direct flights into all major european cities!