EU living in Georgia - Not elegible for 1% scheme - where to incorporate?

[mad1max]

You could also switch between Northern Cyprus (TRNC) and Turkey every 3 month. There is a cheap flight between Antalya and TRNC. Instead of living there permanently. I am thinking of doing this, haven't been to TRNC yet though. Until your company works. You also may have to pay exit tax if you plan to leave Europe later.

You could also switch between Northern Cyprus (TRNC) and Turkey every 3 month. There is a cheap flight between Antalya and TRNC. Instead of living there permanently. I am thinking of doing this, haven't been to TRNC yet though. Until your company works. You also may have to pay exit tax if you plan to leave Europe later.

 

[gnud]

Yes in Romania now. Eu citizen and this is my 10th country that I live in. I dont mind cold weather as long as house is well insulated or i can ski. Winter in Italy sucked as poorly insulated homes and ski high heating cost are not favourable.

I was told by a Romanian that insulation and heating are problems in Romanian apartments. What's the situation in your opinion?

 

[orangekangaroo]

I was told by a Romanian that insulation and heating are problems in Romanian apartments. What's the situation in your opinion?

That is possibly true for the old communistic high rises. Most of these are on district heating. Plus district heating is owned by local governments and with rising energy prices they are close to bankruptcy, this happened in Timisoara. Which means a bailout by the central government. If you go for new built apartment or house, which I have, they are surprisingly well insulated (10cm foam on inside, 25cm hollow brick, 10cm foam on outside) and most of the newer ones have even triple glazing. I have very low energy bills here in Romania. With the recent price hikes, heating will be 150-175 euros per month for my 3 bedroom house. Me working from home.

Last year I was in Italy, Tuscany and for my 4 bedroom farmhouse I was paying 600 euros in heating oil and 200 euros in wood per month, and I still was cold with only 3 rooms at 18 degrees and the rest below. Italy is a great place to live from May till October.

 

[Brace]

I have been to Cabo verde multiple times and to several islands, but mostly to beach resorts many years ago, and dont know how the capital is right now, but it was dangerous before, also not much data on cost of living but the flights itself are very expensive (no low cost) so one has to account those expenses as well, and its a logistical nighmate because its a island and very far away from europe so there is not much. If a computer brakes down getting a new one will be extremely expensive, same for smartphones and any equipment/goods needed, i dont think it provides value for a serious life and serious business to be based there, but i think its an incredible place to relax and withdraw for some time.

I confirm, new construction in Romania is incredible solid, when i was living in Constanta I visited a lot of new construction and the standard of insulation was very high, almost seducing me to try to spend a winter there, i think i will feel probably better at home there than in a much warmer place like Portugal, that has no insulation at all...

Can you elaborate more on the cost to setup the romania micro company and the monthly cost with accountant and the cost of having an adress or office (is it mandatory?) I saw if i do it myself I need to deposit 200 Lei but could not find what other fees exist.

Are you able to operate the bank acount and manage everything in engish by yourself or you need consulting all the time to know what you can and can not do? If you could give some insight your experience would be very valuable for us that are starting out and not really sure if the whole LLC thing is really feasible or not and I guess that Romania would probably be the next best thing in terms of cheap/easy to start with. If that example of 6.8% is correct could be worth to come clean and have a proper EU company with VAT etc and all legit instead of high costs and risks of the residency in paraguay or Georgia if they decide to enforce POEM /PE.

Funny thing was that even before having this new project that i am working now and needing to find a place to incorporate, i went to live in Romania, in a quest for a new life with low cost of living, no gentrification absurd prices, and more freedom overall. First I was in Bucharest searching for a studio in OLX, loved it, but the studios and food were not so cheap like i was thinking and I ended up finding a place in Constanta, but then summer came and the studios go for touristic daily rentals and then i moved on to assess how things are in Turkey.

 

[uplana]

Guys if you have money it can't be a problem to find a good house or flat to rent in Romania? I can't believe that money can't buy you something that is suitable for you to live in.

If that is the only reason for not looking further into Romania while company setup and taxes are easy and low then it should be looked further into.

I believe there are some rich people in Romania and they don't live like stone age people.

 

[orangekangaroo]

I have been to Cabo verde multiple times and to several islands, but mostly to beach resorts many years ago, and dont know how the capital is right now, but it was dangerous before, also not much data on cost of living but the flights itself are very expensive (no low cost) so one has to account those expenses as well, and its a logistical nighmate because its a island and very far away from europe so there is not much. If a computer brakes down getting a new one will be extremely expensive, same for smartphones and any equipment/goods needed, i dont think it provides value for a serious life and serious business to be based there, but i think its an incredible place to relax and withdraw for some time.

I confirm, new construction in Romania is incredible solid, when i was living in Constanta I visited a lot of new construction and the standard of insulation was very high, almost seducing me to try to spend a winter there, i think i will feel probably better at home there than in a much warmer place like Portugal, that has no insulation at all...

Can you elaborate more on the cost to setup the romania micro company and the monthly cost with accountant and the cost of having an adress or office (is it mandatory?) I saw if i do it myself I need to deposit 200 Lei but could not find what other fees exist.

Are you able to operate the bank acount and manage everything in engish by yourself or you need consulting all the time to know what you can and can not do? If you could give some insight your experience would be very valuable for us that are starting out and not really sure if the whole LLC thing is really feasible or not and I guess that Romania would probably be the next best thing in terms of cheap/easy to start with. If that example of 6.8% is correct could be worth to come clean and have a proper EU company with VAT etc and all legit instead of high costs and risks of the residency in paraguay or Georgia if they decide to enforce POEM /PE.

Funny thing was that even before having this new project that i am working now and needing to find a place to incorporate, i went to live in Romania, in a quest for a new life with low cost of living, no gentrification absurd prices, and more freedom overall. First I was in Bucharest searching for a studio in OLX, loved it, but the studios and food were not so cheap like i was thinking and I ended up finding a place in Constanta, but then summer came and the studios go for touristic daily rentals and then i moved on to assess how things are in Turkey.

SRL

• The cost of setup for me was 450 euros inc VAT. You can find it cheaper, for me dealing locally and professionally is most important.
• Accountancy services are unknown yet, I assume it to be around 50 euros a month.
• You can use a virtual office address (120 euros a year), I used my home address as HQ address (work done at clients) - requires Contract Accomodat and your landlord agreement.

Banking

I opened a bank account with BCR, people at the branch spoke good English and the app called George is also in English. I used this bank as they provide business USD debit cards, handy if you want to set up PayPal and withdraw USD without conversion rates. 90% of my clients pay in USD.

EU benefits

• VAT - handy if you do B2B and have lots of EU clients.
• Access to good banking,
• Loads of payment gateways (with cheaper rates)
• Access to EHIC (European Health Identity Card)

With Romanian SRL you have up to 1 million euros turnover to play with. This makes it the cheapest option in the EU. Once you grow you can always look for other alternatives.

 

[uplana]

With Romanian SRL you have up to 1 million euros turnover to play with.

how to understand that ?

 

[orangekangaroo]

how to understand that ?

after 1 million euros turnover per year, you will pay 16% corp tax on the additional instead of 1%. There might be cheaper juristictions.

 

[Brace]

Thanks for the insights OrangeKangaroo!
Do you kno from those 450 Euros how much was for government fees and how much for their services?
Because if i do this in Romania I will go back there personally and probably avoid most of consultants fees, but i cant figure out how much are the non avoidable government fees. So far i could only find out that i need to deposit 200 RON but nothing about fees...

My project needs a proof of concept and will have zero turnover in the beggining for some weeks/months but needs to be ready to invoice enterprise B2B companies in case they by my services.

So for now I only need the cheapest incorporation place that i can find, until i have proor of concept.
I am even considering the UK LLP if it is really 20GBP only and if i dont need to go there... (will use online bank only)

Once i have proof of concept it will be very clear what type of turnover i will have and then decide to incorporate again for good in the right place.

Of course if i can do it straight from the beginning in the right way would be best.

 

[orangekangaroo]

Check out this post if you want to incorporate cheaper, you might be able to do so for 200 euros:

https://www.offshorecorptalk.com/threads/cheap-romanian-incorporation-services.35633/#post-194094

For me what is important is that I work with a local company (Timisoara) for setup and accounts.

 

[TmeWalcO]

Hi @orangekangaroo:

You mentioned your UK LLP + Individual Entrepreneur did not work in Georgia. Can you tell me more about that? What happened?

 

[orangekangaroo]

Hi @orangekangaroo:

You mentioned your UK LLP + Individual Entrepreneur did not work in Georgia. Can you tell me more about that? What happened?

There is no way you can use a structure with Uk LLP and individual entrepreneur scheme and pay 1% tax. I don't know the exact details but talk with a tax consultant.

 

[TmeWalcO]

There is no way you can use a structure with Uk LLP and individual entrepreneur scheme and pay 1% tax. I don't know the exact details but talk with a tax consultant.

Did you consider other tax schemes in Georgia? Did you find a trustworthy accountant?

I'm in exactly this position, where I'll be in Georgia in a month, but I need Stripe, so I was thinking of some kind of setup with US LLC, even if I have to pay some tax.

 

[startfleetio]

Did you consider other tax schemes in Georgia? Did you find a trustworthy accountant?

I'm in exactly this position, where I'll be in Georgia in a month, but I need Stripe, so I was thinking of some kind of setup with US LLC, even if I have to pay some tax.

Does Stripe not support Georgian companies?

 

[mad1max]

No georgia is not supported! Verfügbare Länder: Stripe auch in Ihrem Land finden | Stripe

 

[TmeWalcO]

@startfleetio It's not, which is one of the biggest obstacles for me....

@orangekangaroo Can you tell me more about why you chose the city you're in Romania? The country (inside the EU, low tax, and Stripe) seems a much better option for me too. However, I'm a bit concerned that the costs (mainly rent and employees like a housekeeper) would be significantly higher.

 

[EliasIT]

Check out this post if you want to incorporate cheaper, you might be able to do so for 200 euros:

https://www.offshorecorptalk.com/threads/cheap-romanian-incorporation-services.35633/#post-194094

For me what is important is that I work with a local company (Timisoara) for setup and accounts.

cheap is not always the best - but it can work if you have some basic knowledge.

 

[orangekangaroo]

@startfleetio It's not, which is one of the biggest obstacles for me....

@orangekangaroo Can you tell me more about why you chose the city you're in Romania? The country (inside the EU, low tax, and Stripe) seems a much better option for me too. However, I'm a bit concerned that the costs (mainly rent and employees like a housekeeper) would be significantly higher.

I had discarded Bucharest, pollution and worst traffic and Cluj, the most expensive city. So I spent 3 weeks travelling Romania. I really like Brasov, beautiful city and plenty to see around, plus hiking and skiing. The downsides are it is not connected well. No highways and no airport yet, although one opening soon. If you happy to stay in one place this is it. Ski resort is 15 minute drive from downtown. Bucharest is 2 to 5 hours drive away depending on the traffic.

I also like Sibiu and its beautiful old town. It is connected to a highway and has an airport with mainly destinations to Germany. It is on the smaller side though.

I also visited Oradea which is only 10 minutes drive from the Hungarian border. Beautiful centre, but it felt too provincial for me. This has small airport with 5 or 6 destinations.

In the end I settled for Timisoara. It is on the west and has developed well. You have good highway connections to Serbia and Hungary. It has an airport with 25 destinations. The old town is lovely, still needs some work though. It will be European capital of culture in 2023. There is an ok expat scene. In the IT scene it just ranks behind Bucharest and Cluj. Cost of living is lower than those 2.

For me being able to travel and jump in the car and drive to Western Europe is a big plus. Especially with air travel so compromised due to COVID. From Brasov to the Hungarian border is easily 7 hours drive. From Sibiu it is 4 and a half.

Checked out Bucharest last month and ain't too bad either, some lovely new built areas on the metro line where you can have good quality of life.

@startfleetio It's not, which is one of the biggest obstacles for me....

@orangekangaroo Can you tell me more about why you chose the city you're in Romania? The country (inside the EU, low tax, and Stripe) seems a much better option for me too. However, I'm a bit concerned that the costs (mainly rent and employees like a housekeeper) would be significantly higher.

Use this cost of living comparison tool.

Cost of Living Comparison Between Timisoara, Romania And Tbilisi, Georgia

www.numbeo.com

Yes Tbilisi is cheaper by 20%. But taxation in Georgia higher and good banking options and payment gateways are hard to get.

 

[11111]

My reasoning was that for the first months i needed a cheap place to live and work from. So if i can live in a very cheap place and spend half of what i would spend in a developed country I will get DOUBLE the time of runway for my business to take off, and save resources for the business instead of wasting them on high cost of living.

My original goal was to go to Paraguay and get my residency there, but as i went trough the budgeting of everything it was adding on and becoming more and more investment and risk and stuff to deal with that would delay me and distract me a lot.

So I decided to be a bit conservative for now and stay around Europe until i have proof of concept that my business works and makes money. Save this money to grant me the best chances of success and once successfull will go to celebrate in south america and get the tax residence there.

So for now, i went to Turkey because it´s good weather and very cheap but i got stuck in finding accomodation because of the lack of english, and all being dealt with real state agencies who charge you comissions and i did not see any future there, then i saw that Batumi has relatively good weather (compared to snowy eastern and soviet countries) and beach and loads of luxury studios that sit empty after the summer season and here i solved, for now, my accomodation problem.

My plan was, if i stay here long enough, to move to Tbilisi in April/May.

But i dont think i will remain here for that long, the cost of opportunity is very high, every week that i spend here i am missing out on so much great things in other places that i can not have here...
I am still think if i should go to south america or not.

More friends, fun, parties, belonging, better weather, i speak the languages, i can have girlfriends and great connections and integrate much more.

Here i think i am doomed, not much future! I believe this is my case but not for everyone, I think this place would be incredible for someone from a soviet background that speaks russian and comes from a similar culture, this is the best weather in all ex soviet union and huge beach, and summer is busy with nightlife etc
These guys would thrive here, and probably hate south america... hehehe

So our personal profiles matter a lot!

I think for me its a bad match bout could be a great one for a diferent profile.

For example for me asia is also a total no go...zero interest....

But I was looking into moving to Tunis, or Marrakesh or Agadir, all due to weather and low cost of living, but after my experience in turkey and here, i realized these places will not give me the good living conditions enough to be productive and focused, it´s too much hassle and logistical problems to resolve all the time and nothing never works...


how about you? whats your country? and are you operating from romania now?

Thanks for the reply orangekangaroo, yes i have seen other posts of you and that made me curious about Romania.
I am at the moment in Georgia, but i have been to bucharest and lived in Constanta, it is a much better place to live, by far.
It is very important to live in a quality place with quality infrastructure and environment.
Georgia at least here in Batumi, seems a really shitty place that does not offer any value at all. It is really like being in Africa, no infrastructure at all. I think it will be very hard to survive the 183 days here, especially in Winter, and the cost of living is not that cheap, and specially the human cost and the cost of opportunity of being here alone and isolated. it is really a crappy experience.

Romania offers so much more and it seems to be where i draw the limit line, but I think the problem with Romania for me is that I am fine living there, but only from 1st April to 1st November, than it starts to rain, snow and very cold and dark. Business wise the second problem is that we depend of local accountant, and a business adress and consulting for this and that because we dont speak the language and all of that adds up to the operating costs...And you never know the rules very well on how to run your company....

And the american LLC is extremely simple and everything is in english so nothing seems to beat it... specially if your business fail, is the simplest and cheapest way to start so if the business fails you save a lot...

In terms of tax residency, thats the big challenge because it is hard to know if countries like Georgia or Paraguay or some others that offer territorial taxation will leave you alone or enforce "permanent establishment" or "substance over form" regulations once they find out you are operating your business from there.

But I guess i will wait and see and the burden is on them to find me and my business and make some kind of claim.

I think any venture has 3 domains:

1-The place you operate from:
Cost of living, acess to all the things you need as a person and as an entrepreneur.
2- The country where your company is incorporated:
Tax burden, ease of operations, rules & restrictions, liabilities
3-Your personal tax residency:
This only matters if you have sucess and high profits and has a hight cost and difficulty to get rid of your home country and make it offical in the new country. But more then the other 2 domains this one determines how much wealth you keep.


So my example is i am in Georgia working in establishing my business and it would theoretically by a very cheap place to operate from (1) and great place to have tax residency (3) but the truth is that living here is so challening and shitty that it is handicaping my productivity and my mind and soul, so nothing can flourish from such bad mental state and bad conditions...

And i am a big fan of the Paraguay residency but I am getting scared to take the leap there, because its going to be the same, a third world country with almost no infrastructure or living conditions, iliterate people, no way will i have sucess in such types of places...

I think people in the developed world have sucess because they have the human and technical and financial resources that lead to sucess.

So i think i will go offshore once and when i am sucessfull, for the time being I might have to move back to spain or portugal and pay some personal income tax there for a couple of years until the company gets some maturity. And only then go to paraguay or Dubai or something like that...

Your toughts are welcome guys, thanks!

I was in same boat as yours and had terrible starting point with Georgia
But
Batumi?
You are in Georgia but you are missing the entire life.
Go to Tbilisi
Go to Vake area
Chavchavadze avenue
The entire area is like Budapest
Modern, normal cool friendly people, million shops , coffee shops, restaurants, social life. Affordable living.
You are in the wrong place. If go there your entire experience will change in 1 minute.

 

[TmeWalcO]

I had discarded Bucharest, pollution and worst traffic and Cluj, the most expensive city. So I spent 3 weeks travelling Romania. I really like Brasov, beautiful city and plenty to see around, plus hiking and skiing. The downsides are it is not connected well. No highways and no airport yet, although one opening soon. If you happy to stay in one place this is it. Ski resort is 15 minute drive from downtown. Bucharest is 2 to 5 hours drive away depending on the traffic.

I also like Sibiu and its beautiful old town. It is connected to a highway and has an airport with mainly destinations to Germany. It is on the smaller side though.

I also visited Oradea which is only 10 minutes drive from the Hungarian border. Beautiful centre, but it felt too provincial for me. This has small airport with 5 or 6 destinations.

In the end I settled for Timisoara. It is on the west and has developed well. You have good highway connections to Serbia and Hungary. It has an airport with 25 destinations. The old town is lovely, still needs some work though. It will be European capital of culture in 2023. There is an ok expat scene. In the IT scene it just ranks behind Bucharest and Cluj. Cost of living is lower than those 2.

For me being able to travel and jump in the car and drive to Western Europe is a big plus. Especially with air travel so compromised due to COVID. From Brasov to the Hungarian border is easily 7 hours drive. From Sibiu it is 4 and a half.

Checked out Bucharest last month and ain't too bad either, some lovely new built areas on the metro line where you can have good quality of life.


Use this cost of living comparison tool.

Cost of Living Comparison Between Timisoara, Romania And Tbilisi, Georgia

www.numbeo.com

Yes Tbilisi is cheaper by 20%. But taxation in Georgia higher and good banking options and payment gateways are hard to get.

Have you checked Arad? Seems a good region for me, on the smaller side, cheap, not very touristic. Curious if quality of life and infrastructure there is significantly worst than other better known cities.