hk + gibraltar companies in eu

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Mavpu

New member
Hello everybody, I have a hk and gibraltar companies and live in EU. The companies are recent (no first income declaration has yet been done). For one I am the only shareholder for the other i own a lower % (above 25%).
I thought that I was liable for taxes once paying myself but i understood that my company could be taxed from the EU jurisdiction. I am currently consulting some lawyers to understand what to do but I feel is a big problem. I do not own assets in the country I am resident but I do own them in other countries.

What are my options?

1) next year i will declare my ownership of foreign companies and pay taxes + fine + (I risk to go to jail?)
2) set up a local company make it owner of my operations, receive future profits here and optimize the income of the other 2
2) leave the country, what happens ?
3) i read about Dubai privacy, what if i set up a business there and give it the ownership of the companies?

Fun fact, hk company uses EPB bank account...so also to be seen what happens here if everything is lost my hk accountant said i could declare the loss bringing my income to 0

I know i need a lawyer but I'd also like to hear from people that saw or thought about the same issues.
Thanks!
 

Sols

Staff member
Mentor Group Gold
Are you just a shareholder or are these companies that you actively manage and operate?
 

Mavpu

New member
Are you just a shareholder or are these companies that you actively manage and operate?
I am active in both in the sales and invoicing part; to produce and develop I receive invoices from other companies. My main supplier is in China this is why i did the entity there.
Bank accounts are under company name but of course connected to me.

Edit:
I could stop operating them hiring and become only shareholder if it could help.
 

Sols

Staff member
Mentor Group Gold
The company that you own wholly is tax resident where you live. If you want to play by the rule book, that company will likely have to pay tax just like a local company.

The other company is a little trickier. But if you hold 25% and there are no other big shareholders who are also running the business, that company is most likely also tax resident where you live.

On that basis...

1) next year i will declare my ownership of foreign companies and pay taxes + fine + (I risk to go to jail?)
You risk fines, penalties, and jail time if you do not make the proper declarations. It's unlikely to go as far as prison if it's just a one-off mistake and you are proactive.

2) set up a local company make it owner of my operations, receive future profits here and optimize the income of the other 2
Depending on where you live, there might be some accounting acrobatics you can do to lower your tax burden through a local holding company, local operating company, or something else. A good local tax adviser can help you with this.

2) leave the country, what happens ?
Theoretically, you would incur a tax debt that would just sit there and grow over the years. That can have different problems depending on where you're from.

In reality and if you're not on anyone's radar, you will probably not be a consideration. Just make sure you start clean in your new home.

3) i read about Dubai privacy, what if i set up a business there and give it the ownership of the companies?
Do not go down the path of secrecy. Secrecy will not help you. Secrecy will only make things worse if/when you are caught. You can't just feign ignorance and apologize if you've taken steps to be secretive.

Fun fact, hk company uses EPB bank account...so also to be seen what happens here if everything is lost my hk accountant said i could declare the loss bringing my income to 0
For accounting purposes, you probably haven't incurred a loss simply because a bank is inoperable. If you do and the bank later resumes operation, you have a new injection of cash to explain. It becomes a loss if the bank fails and you are unable to get your money out.
 
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