Does Offshore still makes sense now for EU nationals?

[nunu]

Hello everyone
I'm really glad I found this forum, it feels like home for multinationals.

Does it make sense to open an offshore company & bank account nowadays for the purposes of reducing/optimizing your taxes, or purchasing real estate in west Europe (VAT refund)?

It seems like the EU's black list (EU list of non-cooperative jurisdictions) has a lot of countries which previously were a good option for tax optimization.

But how is there any benefit now when the EU has sanctions against countries like Seychelles, or most of the countries (e.g. Hong Kong) are cooperating with the EU?
The anonymity seems gone through the countries which cooperate with the EU, while doing any business or making purchases through the offshore doesn't seem to have the tax benefits it used to have before.

What are you guys doing or planning to do within the next few years in order to keep your previous structures working, and avoid the EU sanctions?
What changes are you making?

This questions is targeting people with tax residence in EU (e.g. Germany, Austria).

I guess in the end I'll have to pay someone to give professional advice on the matter, but I was hoping there are people here who are in an awkward situation and are willing to share company structures and their adjustments.

 

[Sols]

No, and it hasn't made sense for a long time for reducing/optimizing taxes, unless you are resident in a tax haven (which for EU nationals can easily be Malta, Cyprus, or Ireland) in which case there are cases where foreign companies can be worthwhile.

Secrecy is by and large gone, short of very expensive/exotic solutions. Tax planning is still alive, but requires more finesse than before — nearly always including moving to another country, unless you have significant capital and can pay someone to make arrangements for you.

However, we're in a transition period now and have been for a while. People are still getting away with it (simple offshore structures), due to what's left of secrecy, lack of enforcement, being small fish, or just luck.

The real wake up calls will be the huge tax bills that start arriving in in people's mailboxes over the coming couple of years, as tax authorities get better at making sense of all the data received under CRS.

 

[deepsudeep]

BVI is not blacklisted! But it is scary how others have been blacklisted.

 

[neweraoffshore]

If you don't want to leave Germany you really need to invest in a heavily expensive structure with substance in other countries. Just the advertised virtual offices are not enough (even if they tell you that you will get a dedicated office with dedicated address etc.), you also need at least a real dedicated employee and sometimes not even this enough when the court overrules you.

Maybe this thread from me can help you to understand the problems more further: [FOR EU CITIZENS] Problems when going Offshore - List

But the best is to really relocate. You can still keep your German/Austrian company. I attached a pdf which aims to explain how to tax a non-resident CEO for a German company. It's quite actual (April 2020). Sadly it's written in German, so it may not be useful for everybody here, but in your case you will get a lot of compressed informations with references to EStG, AStG etc. so you can look up the paragraphs in the German laws.

 

[JackAlabama]

Hello everyone
I'm really glad I found this forum, it feels like home for multinationals.

Does it make sense to open an offshore company & bank account nowadays for the purposes of reducing/optimizing your taxes, or purchasing real estate in west Europe (VAT refund)?

It seems like the EU's black list (EU list of non-cooperative jurisdictions) has a lot of countries which previously were a good option for tax optimization.

But how is there any benefit now when the EU has sanctions against countries like Seychelles, or most of the countries (e.g. Hong Kong) are cooperating with the EU?
The anonymity seems gone through the countries which cooperate with the EU, while doing any business or making purchases through the offshore doesn't seem to have the tax benefits it used to have before.

What are you guys doing or planning to do within the next few years in order to keep your previous structures working, and avoid the EU sanctions?
What changes are you making?

This questions is targeting people with tax residence in EU (e.g. Germany, Austria).

I guess in the end I'll have to pay someone to give professional advice on the matter, but I was hoping there are people here who are in an awkward situation and are willing to share company structures and their adjustments.

It is helpful to get yourself out of the new sowjetunion aka eudssr.
Otherwise difficult

 

[ImKing]

eudssr.

I agree, agree

 

[deepsudeep]

If you don't want to leave Germany you really need to invest in a heavily expensive structure with substance in other countries. Just the advertised virtual offices are not enough (even if they tell you that you will get a dedicated office with dedicated address etc.), you also need at least a real dedicated employee and sometimes not even this enough when the court overrules you.

Maybe this thread from me can help you to understand the problems more further: [FOR EU CITIZENS] Problems when going Offshore - List

But the best is to really relocate. You can still keep your German/Austrian company. I attached a pdf which aims to explain how to tax a non-resident CEO for a German company. It's quite actual (April 2020). Sadly it's written in German, so it may not be useful for everybody here, but in your case you will get a lot of compressed informations with references to EStG, AStG etc. so you can look up the paragraphs in the German laws.

Thanks for sharing your experience. I am in Finland and was looking for options. It makes sense that it cannot be that easy/cheap to set up management elsewhere without government knowing about it

 

[Fred]

Thanks for sharing your experience. I am in Finland and was looking for options. It makes sense that it cannot be that easy/cheap to set up management elsewhere without government knowing about it

The problem in first place will be your abroad financial institution for your offshore company.

If you go for let's say a Belize company with Belize Bank account this setup won't grant you a residence Visa in Belize.

Therefore the Bank in Belize will report your financial statements at the end of the year to the tax authorities in Finland.

The first step would be to setup your company in a jurisdiction like UAE that grants you a residence Visa along with the company formation. With the residence Visa you can open a local UAE bank account that considers you as a UAE resident because of the residence Visa. The UAE bank won't report you financial statements under CRS to Finland.

That's the UAE - non EU side.

For Finland - the EU side it's different.

As long as you keep living there the whole year with all your exiting ties - the above UAE setup will work of course and many people live that way without any problems - but and it's a big BUT in case something goes wrong - Finland tax authorities can go after you. Depending on the amount of money it can go as far as to go to jail.

This can be optimised as well.

Hope I could give you together with the thread of @neweraoffshore a good inside in a setup that works in practice still for single passport holders of high tax countries like we are.

 

[deepsudeep]

The problem in first place will be your abroad financial institution for your offshore company.

If you go for let's say a Belize company with Belize Bank account this setup won't grant you a residence Visa in Belize.

Therefore the Bank in Belize will report your financial statements at the end of the year to the tax authorities in Finland.

The first step would be to setup your company in a jurisdiction like UAE that grants you a residence Visa along with the company formation. With the residence Visa you can open a local UAE bank account that considers you as a UAE resident because of the residence Visa. The UAE bank won't report you financial statements under CRS to Finland.

That's the UAE - non EU side.

For Finland - the EU side it's different.

As long as you keep living there the whole year with all your exiting ties - the above UAE setup will work of course and many people live that way without any problems - but and it's a big BUT in case something goes wrong - Finland tax authorities can go after you. Depending on the amount of money it can go as far as to go to jail.

This can be optimised as well.

Hope I could give you together with the thread of @neweraoffshore a good inside in a setup that works in practice still for single passport holders of high tax countries like we are.

I read that to get tax residency I would need to stay 183 days but the visa is issued for 6 months? So it is short of the target. I could move there and trade stocks from there so I dont really have to set up a company unless that is what is required to get the visa. But I need the bank ccount and tax residency immediate after I get there

 

[Fred]

I read that to get tax residency I would need to stay 183 days but the visa is issued for 6 months? So it is short of the target. I could move there and trade stocks from there so I dont really have to set up a company unless that is what is required to get the visa. But I need the bank ccount and tax residency immediate after I get there

The visa is issued for 3 years - to keep it valid you have to be every 180 days for minimum 1 day to the UAE. So per year you have to be in the UAE in total 2 days.

You are right if you want to get the tax certificate you have to stay a little bit longer here.

The bank account is possible as soon as you have the residence visa.

Let's say you want to start the process today - everything you need including Company, Residence, Emirates ID will be in your hands in 2 weeks. From there on we proceed with the bank account openings - business as well as personal.

 

[troubled soul]

Best way to avoid a TAX in 2021. Move to Tax Free country

 

[nunu]

Just wanted to jump in real quick and say Thank You to everyone that replied so far @Sols @deepsudeep @neweraoffshore @JackAlabama @ImKing @Fred @azb1

Very helpful and clarifies the situation for me quite a bit.