€700K - Where incorporate and live as digital nomade

[Financelady45]

Hello,

About Me: 45years old Consultant and Analyst with Western European Pass

I am going to work on some projects for US Firms where I will get approx €700K over the next 3 years:
2019: €400K
2020: €200K
2021: €100K

I am currently based in Europe in a country where the corporate taxes are around 26%. My tax advisor has suggested me to incorporate here a Ltd, pay 26% taxes of €700K (€175K) and with the rest amount buy properties (525K). I can also have approx 150K cash from the sale of another apartment for a total of 675K.

Goal: I want to retire now and generate an auto income (1500/2000EUR) and live as digital nomad!

My aim:
1.- Be able to live and work as digital nomad
2.- Assets Protection (Make sure no one can steal by properties)
3.- Make sure to do all 100% legit and legal as I want to sleep well

Do you have any suggestions?
Thanks
Miranda

 

[Clip]

Move to Thailand, with 2000€ per month you can live pretty nice and no overseas profits. Also LLC doesn’t tax you anything.

 

[void]

what does 'move to Thailand' exactly mean? from what I know you can get only short-term visa (applies to most of the EU countries) or do you suggest buying some of their Elite residency programs? Could you provide some links to up-to-date information about this subject?

 

[momordica]

Did he have any particular reason why he suggested to incorporate in the country of your residency? 26% is one thing, but also consider possible dividend withholding tax or dividend tax on personal level in your country. Eventually you will need it.

 

[Clip]

what does 'move to Thailand' exactly mean? from what I know you can get only short-term visa (applies to most of the EU countries) or do you suggest buying some of their Elite residency programs? Could you provide some links to up-to-date information about this subject?

The Thai Elite Visa for Nomads: Is It Worth It? | Nomad Capitalist

 

[Shlomo]

Forget about Thailand, it is one of the world's most corrupt countries, and their Thai elite visa is a joke! The country is ruled by a military junta, and the military junta has repeatedly made populist remarks to confiscate property from foreigners. As most of you know already, foreigners cannot own land, for example.

Instead, I would suggest a Polish LCC with bearer shares, with only 9% tax rate as of 2019. You can easily open a bank account. As an EU citizen you do not need to look at any kind of residency programs or citizenship programs. There is nothing complicated or risky about this, as would be the case living in a country like Thailand or having some kind of offshore setup

Not only this, but Poland has among the highest rental yields in the EU, and one of the most promising real estate markets. Rental incomes would only be taxed at 9%. Poland also has among the lowest personal income taxes in all of the EU. The cost of living is very low, in addition to real estate, and a private health care insurance would be very cheap.

Another country in Europe I would look at is Georgia, albeit it is outside of the EU, and if Poland would not be good for some reason I could provide more details.

 

[JohnLocke]

Most people willing to move consider Dubai, you may have a look into it.

 

[Clip]

Whats is Dubai cost of living?

 

[Shlomo]

If going by the Numbeo cost of living index then the UAE ranks 35 globally, and it seems when looking at individual cities, Dubai is not very expensive. This contradicts my own impressions concerning Dubai. Personally, I think living in an Arab country is not the most desirable option, especially for the average European. Besides, the thread starter is a woman, and I would think living in an Arab country would not be a good choice then. I am not speaking from any actual knowledge how it is living in Dubai as a woman, only what I think is the case.

 

[GrumpyMess]

Forget about Thailand, it is one of the world's most corrupt countries, and their Thai elite visa is a joke! The country is ruled by a military junta, and the military junta has repeatedly made populist remarks to confiscate property from foreigners. As most of you know already, foreigners cannot own land, for example.

Yes, until Thailand joins AEOI you can feel there quite safe, but not after, because there is no law exempting foreign income.

Instead, I would suggest a Polish LCC with bearer shares, with only 9% tax rate as of 2019. You can easily open a bank account.

If I'm not mistaken the PIT is still 19%, so much better is to use Cyprus non dom program with total 12.5% in the worst case and only 60 days presence requirement or Romania with 3% corp tax for micro entities and 5% dividend tax.

Another country in Europe I would look at is Georgia

Georgia has quite low quality of life. You do not want to live in a shithole just to save some money. It's a good country for some things but not for living for a half of the year.

 

[Shlomo]

Yes, until Thailand joins AEOI you can feel there quite safe, but not after, because there is no law exempting foreign income.

This is just my opinion, but I feel there are significant political risks in Thailand. There is the constant threat of corruption, an unpredictable military junta, soon-to-come elections, in addition to the fact that Thailand has always been extremely nationalistic with policies that are often downright hostile towards foreigners. I do not mean that the people are hostile, but the laws and policies definitely are not in favor of foreigners (not even fair or neutral, I would say).

If I'm not mistaken the PIT is still 19%, so much better is to use Cyprus non dom program with total 12.5% in the worst case and only 60 days presence requirement or Romania with 3% corp tax for micro entities and 5% dividend tax.

I recently spoke to a lawyer who claimed that it has been lowered to 9% now, but it might be a misunderstanding; he might think it such a sure-thing, but in fact it still remains at 19%, although I do not believe this is the case. It seems the thread starter also wants to find a country to live in, and then I think Romania would be a worse choice, while certainly Cyprus would be much more expensive in terms of cost of living.

Georgia has quite low quality of life. You do not want to live in a shithole just to save some money. It's a good country for some things but not for living for a half of the year.

This is just my opinion, but if someone has been in both Georgia and Thailand, and they recommend Thailand over Georgia then I would find it very strange. It is true that both countries are developing countries, but because of the high corruption in Thailand, Georgia feels like a much more well-developed country all-round. In fact Thailand is richer, so it should be the opposite.

In my experience, Georgia has lower cost of living than Thailand. It is true that locals are very poor by EU standards, but as a foreigner you would not notice so much difference. In Thailand however, the poverty is striking and it is everywhere. Even visiting Ukraine as a tourist or living there as an expat, things would not be so different compared to elsewhere in Europe. Georgia also has high crime safety, low corruption for being a developing country, low taxes, business-friendly climate and pro-immigration laws.

 

[GrumpyMess]

I recently spoke to a lawyer who claimed that it has been lowered to 9% now, but it might be a misunderstanding; he might think it such a sure-thing, but in fact it still remains at 19%, although I do not believe this is the case.

You are talking about CIT, it really has been lowered to 9% for micro entities, but there is also a 19% dividend tax. Also Poland has an exit taxation rule which has be taken into account. It's not a bad place to live at all, but it's tax regime is not the most advantageous.

while certainly Cyprus would be much more expensive in terms of cost of living

yes, but if you take into account taxes then it can be even cheaper

 

[7889]

Georgia set up was mentioned. With it, you don't need to move. As of today, if you register company in one of Georgia free econimic zones (which is super easy) you only pay for annual license. Otherwise you are essentially tax free (unless you decide to do business with local companies). Georgia is not part of automatic tax exchange too.

 

[Financelady45]

Hello Friends,

Thanks so much for your comments, you make me really happy.

Here some options:

A.- Country of Residence: Top 5 Economy in Europe:
Pros: Stable Economy, No default risk,
Cons: 26%: It is a lot of money, the only possibility to reduce this would be by paying myself a salary and hiring a family member.

B:- Romania, Hungary, Poland
Pros: Life cost nothing there, Low Taxes
Cons: Corrupted counties, difficult to trust them

C.- Georgia
Pros: Low Taxes
Cons: Mafia

D.- Thailand
Same as Georgia

In particular I would like to invest this money in buying properties so that I can rent them and live with the rental. I do not want to stuck in one place and I do not want to worry about DBA Taxation agreement between my hometown and places where I live.

If you were in my situation, what would you do? How would you invest?

 

[void]

if you think that life in Poland costs nothing and that it is more corrupted country than say Spain or France you can't be more wrong :-D
you should travel a bit before making conclusions like this

 

[1nomad]

What about Malta ordinary residence scheme?

 

[Financelady45]

What about Malta ordinary residence scheme?

Hello,

Yes Malts is a great option because the corporate taxes officially are 35% but with optimization and deductions can reach 0-5%.
My main concern is about my residency and passport, I am afraid that they will follow me if I am moving all my interests to Malta without living there.

 

[7889]

You can not just move to Thailand or Georgia because you want to. You need grounds to obtain residence permit. In Georgia it's either having property of > usd 35k for short-term permit or investment visa (over usd 100k investment). There are much more things to consider for moving of course (language, cultural activities, healthcare, ease of transportation etc etc). Then again, saying that Georgia is "mafia" country is honestly laughable. What gave you that idea in the first place? Tbilisi is one of the world safest cities, way higher in all crime ratings than Bangkok. Georgia is also one of few countries with territorial taxation, i.e. your foreign income does not bother them at all, even if transferred to Georgia.

 

[GrumpyMess]

I do not want to stuck in one place and I do not want to worry about DBA Taxation agreement between my hometown and places where I live.

Unfortunately there are not so many residence programs which allow you not to be present in a country for a 180 days, otherwise you will not obtain a tax residence certificate, can't benefit from double tax treaties and you will not be protected from claims of your homeland. These are risks that cannot be eliminated, especially if you are from a western Europe.

If you were in my situation, what would you do? How would you invest?

I am exactly in your situation, you can read my threads, there is some interesting information

You need grounds to obtain residence permit. In Georgia it's either having property of > usd 35k for short-term permit or investment visa (over usd 100k investment). There are much more things to consider for moving of course (language, cultural activities, healthcare, ease of transportation etc etc). Then again, saying that Georgia is "mafia" country is honestly laughable. What gave you that idea in the first place? Tbilisi is one of the world safest cities, way higher in all crime ratings than Bangkok. Georgia is also one of few countries with territorial taxation, i.e. your foreign income does not bother them at all, even if transferred to Georgia.

Wow, I have read about Georgian's residence requirements, it's benefits, calculated the costs and I'm shocked. It seems it's possible to buy a 35k apartment and you get a residence card. 35k, this is a ridiculous amount comparing to other programs. This way you have an address for any foreign banks and proof of your stay in Georgia with no 180 day rule and no tax, no aeoi. For HNWI's it is also possible to get a tax residence certificate without a 180 day rule. I don't believe it can be true and there are no major drawbacks.

 

[momordica]

1. Set-up a FZE company in the UAE to invoice your clients. No acccouting, 0% CPT
2. Set-up a LLC company in Slovakia just to pay yourself a minimal wage. Gross is 520 eur and you will get 420 eur. For the 100 eur the state will take, you get relatively decent healthcare (or at least value for the money) and also right for government provided pension when you reach the certain age, the amount will be symbolic because you pay minimal levies but still you will be a net receiver from public system.
3. Disclose your life documentable life in the country of your current tax residency (rent, bank accounts...).
4. Rent / Buy place in Slovakia. You become a tax resident in Slovakia if you spend 180 days per calendar year in the country OR if you have "center of vital interests" in the country - which you will have bc of job, rent and no economic ties to any other country. If you would consider to live in the country, it is decent option. Cost of living is comparable to Poland/Hungary. If you are tired of huge cities, Bratislava offer some balance. From the capital town it is one hour to Vienna, two hours Budapest by car and Prague is reachable in 4 hours by train. Bratislava region is the 3rd richest region in the EU. Eurozone country. No CFC rules for private individuals. Slovakia is still the fastest growing economy since they joined the EU.
5. Pay yourself a dividend from your UAE company. 0% withholding tax imposed by UAE, 7% tax on dividends under DTT in Slovakia.
6. Invest in the real estate of your choice. The income derived from rent is treated as capital gains, taxed at the rate 19% (you will not pay social levies on this). If you will decide to sell the property (and held the property for at least 2 years) you will pay 0% tax. 0% tax rate also applies to sell of shares bought on the regulated market (if you hold them at least 12 months). You can buy stuff up to 15k eur in cash, physical gold worth of 10k per transaction also in cash... sell of physical gold is taxed at the rate of 0%.