Georgia HNWI Residence **The best Tax-Free base with resident certificate regardless of time spent there?**

[realdealbusiness]

Hi,

I read online that you can attain a Georgian HNWI status by showing that you earned 200.000 GEL+ (~$63k USD) annual income in any of the three previous years prior to the year of submitting your application. Or you just stay there 183+ days a year.

The main benefit of an HNWI in Georgia:
- No minimum stay required
- tax residence certificate, even if you stay less than 183 days
- territorial taxation system
- No CFC ( does that even matter?)

Currently I am living in Cyprus and Georgia beats Cyprus both in taxation and minimum required stay. The latter does not bother me at all in Cyprus - it's just that I can be even more flexible in Georgia apparently. Cyprus has amazing weather almost year-round though... big plus. But the fact that the EU is getting worse every day for business makes me want to leave asap. Especially during the last few months you can sense that the EU really does not care about their people. More regulation, less privacy and harsh enforcements.

Right now I am trying to find a tax-free (or low-tax) setup with minimum (or no) amounts of bureaucracy / paper work to be able to focus only on the business once everything has been set up.

Furthermore I do not want to travel all the time and live with a solid routine in decent locations. Cold weather, gray sky or abnormal heat is just not for me, so I am looking to avoid that by diversifying.

I thought about combining 2-4 locations that I can use each year as bases. In each base I want to have either an appartment I rent or some sort of a flexible recurring long-term rent deal with a local.

- 6 months Georgia + 3 months *Bali + 3 months slow-travel to one or two locations of choice
- 4 months Georgia + 4 months *UAE + 4 months Cyprus (f.e. January-April UAE, May-August Georgia, September to December Cyprus)
- 4 months Georgia + 4 months *Portugal + 4 months ...
You get the idea.

My questions would be:

1) Does anyone here live a certain lifestlye and does this work tax-wise or not?
2) Is it really that easy to get a Georgian tax residence certificate by being HNWI even when staying less than 183 days?
3) Is it possible to run a foreign company tax-free?
4) Is it possible to live entirely tax-free in Georgia or not (Dividends, income, ...) ?
5) Which locations on this earth allow renting an appartment there without becoming tax-resident?
6) Would you rather stay at one location 183+ days to be safe?
7) I could be mis-interpreting the CFC & foreign-source income situation. Suppose clients are all not from Georgia. Could I operate a UAE FZ from Georgia & earn dividends / income tax free or not?
8) In case all this is working, which company would you set up for ease of doing business and living tax-free?
*9) Which countries would you recommend to have a base in (I used * only as example)?

Source of information: HNWI Tax Residency In Georgia With No Minimum Stay
I am in no way, shape or form affiliated with this website nor do I know the author. This is the first website that popped up when I googled "tax residence georgia hnwi minimum stay". I am only posting this link to get clarity about the validity of the information the author provided. @Admin please remove link if it is against guidelines.

 

[JustAnotherNomad]

I don’t know anything about that scheme, but even if you are a tax resident of Georgia, what’s stopping any other country from declaring you tax resident of their country as well?
And then there would probably be tests in the DTA (if there even is one) and Georgia would lose, rendering the certificate worthless.
Of course if you only live in Georgia, the UAE and Cyprus it probably won’t matter. But then again, would you really need a tax certificate?
I don’t really see the advantage, except if your home country requires a tax certificate to let you go. Am I missing something?

 

[realdealbusiness]

I don’t know anything about that scheme, but even if you are a tax resident of Georgia, what’s stopping any other country from declaring you tax resident of their country as well?
And then there would probably be tests in the DTA (if there even is one) and Georgia would lose, rendering the certificate worthless.
Of course if you only live in Georgia, the UAE and Cyprus it probably won’t matter. But then again, would you really need a tax certificate?
I don’t really see the advantage, except if your home country requires a tax certificate to let you go. Am I missing something?

Yes, I agree. That's why I want at least one solid home base so that I am safe in case someone starts asking questions.
I heard from many tax consultants that they believe it's better to have a proper tax residence where you declare your income just to be on the safe side.

 

[Konstanz]

Yes, I agree. That's why I want at least one solid home base so that I am safe in case someone starts asking questions.
I heard from many tax consultants that they believe it's better to have a proper tax residence where you declare your income just to be on the safe side.

You have not only to have certificate but show that you live in Georgia.
You have to cut your ties with home countries (sell / rent out real estate, sell cars, move your family to Georgia etc.)
Also if the company is managed out of Georgia I am not sure if you don't trigger permanent establishment regulations. Even if not CFC , your company/you can be still taxed in Georgia.
Well it also much depends on your size of business. How much deep you could be investigated.

 

[realdealbusiness]

You have not only to have certificate but show that you live in Georgia.
You have to cut your ties with home countries (sell / rent out real estate, sell cars, move your family to Georgia etc.)
Also if the company is managed out of Georgia I am not sure if you don't trigger permanent establishment regulations. Even if not CFC , your company/you can be still taxed in Georgia.
Well it also much depends on your size of business. How much deep you could be investigated.

Cutting ties with my home country: No problem, that does not even take me a day. In fact I already cut ties with my HT birth country a long while ago.

Of course I want to keep everything fully legal. That's why I opened this thread. Basically I want to find out advantages / disadvantages of Georgia.

All in all I want to find out the best tax residence for myself. If possible I want to avoid having to spend 183+ days in UAE.

 

[Konstanz]

Cutting ties with my home country: No problem, that does not even take me a day. In fact I already cut ties with my HT birth country a long while ago.

Of course I want to keep everything fully legal. That's why I opened this thread. Basically I want to find out advantages / disadvantages of Georgia.

All in all I want to find out the best tax residence for myself. If possible I want to avoid having to spend 183+ days in UAE.

What is your budget for residency?
Georgia is cheap , but it's random country.. For me it would be too much extreme.

 

[realdealbusiness]

budget is high. really looking for the best. quality > quantity.

I'd rather spend more and be in a business friendly country with ease of doing business rather than ending up in a shithole.

 

[JustAnotherNomad]

Have you ever been to Georgia? FWIW, they have great food and skiing, but it’s definitely not too far from being a shithole. Maybe go there first before you even consider spending half a year of your life there every year?

 

[realdealbusiness]

Let me clarify, Georgia is the best option I could find when we speak about ease of getting a tax residence. I know I created this thread heavily focussing on Georgia, because I wanted to find some things out before even considering it. I agree with you, one needs to visit countries first before relocating.

That does not mean I romantize about Georgia. I want to find the best solution (country / city) for entrepreneurs and simply go from there - to live & work from there long-term with almost no travel each year.

 

[JustAnotherNomad]

Getting tax residency there won’t help you if you spend significant time somewhere else - because the other country might also claim you as a tax resident. So I’m not convinced that it will actually help you that much.

Most high-tax countries declare you tax resident as soon as you have access to an apartment there. It doesn’t even matter how many days you spend there. So then two countries will try to tax you. If there is a DTA, it will determine who “wins”. But if there is no DTA, you will simply have to pay taxes in Georgia AND the other country. Only focusing on Georgia won’t get you far, I think.
I think the tax residency certificate will only help you as a formal requirement (such as if a bank requires it), not if push comes to shove.

 

[realdealbusiness]

Agreed. So back to the question:

What's the best *place to relocate longterm?

*while not getting tax resident of another place

 

[blockchain4ever]

Most high-tax countries declare you tax resident as soon as you have access to an apartment there. It doesn’t even matter how many days you spend there.

That's news to me. I don't think that's common. For example article 15 in the standard OECD tax treaty typically lets an employee work in a country for 183 days without paying income tax.

In practice, I think such laws are mostly toothless since the DTA will render such laws moot.

I agree that such a tax certificate probably don't make a huge difference in a real audit, but it can very well help you keep under the radar.

 

[daxbr]

If I understand correctly, he moved his tax residency from his EU native country to Cyprus a while ago. Now he wants to move it from Cyprus to Georgia. His original country will never be notified about Cyprus-Georgia move and therefore unlikely to complicate his affairs, which is his biggest concern. Not enough info to assess if Georgia is best for him.

 

[JustAnotherNomad]

Sorry, that was poorly worded. What I meant was that most high-tax countries make it very easy to to (accidentally) become tax resident there. Either because you have an apartment there or because you spend time there frequently, even though it’s way less than half a year (270 days over a 3 year period), etc.
He wrote in another thread that he would like to be flexible with where he lives, find good talent for his business and basically live a comfortable life. I don’t think Georgia will help much with the overall goal.

 

[OTR365]

2) Is it really that easy to get a Georgian tax residence certificate by being HNWI even when staying less than 183 days?

I am tax resident in Cyprus, and had the same idea about Georgian HNWI. This year went down the drain because of travel bans. Anyway, a couple of months ago I visited the Revenue Service in Tbilisi.

- You need either a proof of assets (>3M GEL) or a proof of annual income (>200K GEL).
- The paper needs to be notarized/apostilled, and translated into Georgian.
- If you don't have Georgian residency permit, you need to have at least 25K GEL income from Georgian sources. This can be satisfied e.g. with a term deposit in a Georgian bank.

My long-term plan is to buy an apartment in Tbilisi and split my time between Georgia and 2-3 other countries. My home country (EU, Northern Europe) does not mind, as long as I don't stay there over 183 days/year. I am even allowed to own a holiday property there and still keep my nonresident status. Other EU countries have probably similar rules, and monitor these rules with varying aggressiveness. I just don't believe having a 2nd home in Indonesia/UAE etc. would bring you troubles if you don't overstay 183/365.

 

[JustAnotherNomad]

@OTR365 If you haven’t done so already, you’ll want to double check the rules for your home country regarding how many days you can stay there within a 36-month period etc. - not only in one year.
I know that some Scandinavian countries at least apply such a test. But if you stay there less than 90 days every year, you should probably be fine. Unless you have ties to the country like wife and kids etc.

 

[OTR365]

@OTR365...you’ll want to double check the rules for your home country regarding how many days you can stay there within a 36-month period etc. - not only in one year.

I am not aware of such a rule in my country. Many countries have rules for a situation when one is moving out, but keeps close ties (a house/spouse/business/work etc.). In Sweden it is five years, Norway and Finland three years, Denmark zero years. There does not seem to be a common template for this. Even the 183/365 rule has exceptions - in Norway it is only 61 days.

 

[hungarist]

Tbilisi is a beautiful city for visiting for a few weeks, but living there for 183+ days?
I doubt any HNWI would do that.

A lot depends on your citizenship.
US national? There is nothing you can do.
UK? Channel Islands.
EU national and still want to live in the EU? (except France) Monaco

Get a residency in Monaco and you will pay zero income tax and capital gains and you don't even have to spend any day there.
Monaco is part of the Schengen Area, it is not possible to check if you actually lived 183+ days in Monaco or anywhere else in the EU, so you can live all year in Portugal and still be Monaco tax resident.

Most high-tax countries declare you tax resident as soon as you have access to an apartment there. It doesn’t even matter how many days you spend there.

This is right.
If you are a Russian or Asian maybe a utility bill and spending some time there enough for your Cyprus or Georgia tax residency, but if you are from the EU it is useless.
If you have a house on your name there are probably (water, electricity bills), a French, German taxman can just say you are tax resident because you own a house.

 

[JustAnotherNomad]

Even the 183/365 rule has exceptions - in Norway it is only 61 days.

I don't think it's 61 days though, I think it's 180 days over a (rolling?) 36-month period or something like that. But yes, that's what I meant.

 

[JustAnotherNomad]

Get a residency in Monaco and you will pay zero income tax and capital gains and you don't even have to spend any day there.
Monaco is part of the Schengen Area, it is not possible to check if you actually lived 183+ days in Monaco or anywhere else in the EU, so you can live all year in Portugal and still be Monaco tax resident.

We already mentioned Monaco in his other thread as well:

Using 0% business with substance for full flexibility (CFC Rules) - professional setup

What I want to achieve? I want to be able to move around freely & with peace of mind to ultimately satisfy all parties, be it the governments, my partner & the business needs. My main concern is that I fear not seeing possible flaws in my approach and possible consequences resulting from that...

www.offshorecorptalk.com

I agree with the idea. Do you happen to know how much Monaco residency costs realistically? You would probably have to rent at least a small apartment, and space is very limited there. 2000 EUR per month? Do you think you could rent out the apartment through AirBnB when you're not there?