Jurisdiction advice

[John Noel]

Dear Sirs,


I'm an EU citizen who has lived in Switzerland working as an employee for the last 8 yrs (my first job - never paid any tax in the EU).
Now I'm gonna resign and do my own business, I can live anywhere and establish a company anywhere, I just care about wasting the least possible money on taxes.
First question: if I keep my residence in Switzerland for the next 3-4 yrs I'd normally get a Swiss passport, considering it will cost (address and health insurance for me + my wife) approx 80-100k chf plus 17.5% taxes on my future wage (employee of my own company), is it worth it?
Consider switzerland doesnt have that CFC thing and capital gain tax is 0%

Second: where to establish an holding company? where to establish an operating company?
The objective is to maximize privacy and minimize corporate taxes

If I stayed in switzerland 3-4 for getting the passport I would initially pay myself a below average salary and expense the most I could on the operating company (therefore I need to incorporate in a place where this is doable)


Thanks in advance for sharing your advice

 

[EliasIT]

It depends on what your goal is! It doesn't seem clearly defined in your thread!

On one hand, you want to pay the lowest possible tax, on the other hand, you want to have a Swiss passport!

 

[John Noel]

It depends on what your goal is! It doesn't seem clearly defined in your thread!

On one hand, you want to pay the lowest possible tax, on the other hand, you want to have a Swiss passport!

Sorry, maybe my post is poorly phrased, but both objectives are reachable:
1 incorporate now in a tax friendly environment while still being in Switzerland
2 while in Switzerland pay myself 0 dividends and low salary
3 get the passport
4 leave Switzerland and move my tax residency in a tax friendly environment
5 release dividends and/or increase salary

So, again, which are your recommended tax friendly environments for both:
1 myself in three years
2 the holding company now
3 the operating company now

 

[Don]

Sorry, maybe my post is poorly phrased, but both objectives are reachable:
1 incorporate now in a tax friendly environment while still being in Switzerland
2 while in Switzerland pay myself 0 dividends and low salary
3 get the passport
4 leave Switzerland and move my tax residency in a tax friendly environment
5 release dividends and/or increase salary

So, again, which are your recommended tax friendly environments for both:
1 myself in three years
2 the holding company now
3 the operating company now

Do you mean to establish a branch office / PE in Switzerland of this foreign entity, and repatriate profits to the foreign entity, and once you have changed tax residence, you withdraw the profits making sure they dont get taxed further?

 

[Rexstone]

if you want 0 corporate tax in 2023 there's just caribbeans and channel islands

 

[John Noel]

Do you mean to establish a branch office / PE in Switzerland of this foreign entity, and repatriate profits to the foreign entity, and once you have changed tax residence, you withdraw the profits making sure they dont get taxed further?

No Sir, sorry for the confusion, let me articulate again
I meant the following:

1. I live now in switzerland
2. I establish now a holdin company 100% owned by me in place X, let's say BVI
3. I establish now an operating company 100% owned by the holding in place Y, let's say caymann
4. I establish a sole proprietorship for consulting in switzerland
5. i invoice 60k chf per year from my swiss sole proprietorship to my caymann operating company for consulting services
6. i pay my rents and bills and health insurance with those 60k for 3 years
7. after 3 years, I get the swiss passport and I move my a*s and my tax residency to place Z, where dividend and inccome tax are 0
8. live happily at 0 tax afterwards, with a swiss passport in my pocket

So my questions are:

1. where to incorporate the holding?
2. where to incorporate the operating?
3. where to move after getting the swiss passport to live my future life?

if you want 0 corporate tax in 2023 there's just caribbeans and channel islands

can you expand or describe a bit?

 

[JustAnotherNomad]

If you manage your company from Switzerland/work for the offshore company from Switzerland, the company has to pay tax in Switzerland.
If you don't want that, you have to move to a different country.

If I were you, I would work with a Swiss tax advisor to set up a good structure in Switzerland, until you have your Swiss passport. If you want it.

 

[JohnLocke]

If you manage your company from Switzerland/work for the offshore company from Switzerland, the company has to pay tax in Switzerland.
If you don't want that, you have to move to a different country.

If I were you, I would work with a Swiss tax advisor to set up a good structure in Switzerland, until you have your Swiss passport. If you want it.

Actually, that's the best advice you can get from here. You also can't live in Switzerland for 60K CHF per year unless you are completely indifferent to how you live or you already own a house that is paid for, which would also be contradictory to your question as a whole.

 

[Gediminas]

Dear Sirs,


I'm an EU citizen who has lived in Switzerland working as an employee for the last 8 yrs (my first job - never paid any tax in the EU).
Now I'm gonna resign and do my own business, I can live anywhere and establish a company anywhere, I just care about wasting the least possible money on taxes.
First question: if I keep my residence in Switzerland for the next 3-4 yrs I'd normally get a Swiss passport, considering it will cost (address and health insurance for me + my wife) approx 80-100k chf plus 17.5% taxes on my future wage (employee of my own company), is it worth it?
Consider switzerland doesnt have that CFC thing and capital gain tax is 0%

Second: where to establish an holding company? where to establish an operating company?
The objective is to maximize privacy and minimize corporate taxes

If I stayed in switzerland 3-4 for getting the passport I would initially pay myself a below average salary and expense the most I could on the operating company (therefore I need to incorporate in a place where this is doable)


Thanks in advance for sharing your advice

Hey,

Switzerland applies permanent establishment rule, which means that if you manage this foreign company from Switzerland it might be taxable in Switzerland with a standard corporate income tax rate.

The only safe way to set up such a structure is to ensure that these companies are locally managed.

 

[John Noel]

Dear Sirs,
I got your point and I decided to follow your advice: the company has to be locally managed.
Even more cause I learned that having already spent 7 years in Switzerland I will be able to request a passport with just 3 years in the future.
I really appreciated your sharing of wisdom but please be so kind to answer one last question: if you needed to start a company tomorrow and move there your fiscal residence together, what that place would be? and why?
Thanks

 

[BlackJack]

If you manage your company from Switzerland/work for the offshore company from Switzerland, the company has to pay tax in Switzerland.
If you don't want that, you have to move to a different country.

If I were you, I would work with a Swiss tax advisor to set up a good structure in Switzerland, until you have your Swiss passport. If you want it.

Why don't open a Dubai branch in a freezone by nominating a so called "General Manager"? In that case emitting invoices from there is not taxed, or not?

 

[daniels27]

Honestly. I would recommend you a Singapore offshore company or Guernsey. That shroud do it's job for 4 years. You need 4 years as the passport citizenship takes up to one year.

For your living costs, sole proprietor sounds most reasonable. Just claim some phone bills, restaurants, SBB on them. And now my advice invoice some other companies from US, Australia etc. Just don't use your companies. The Swiss will want to see the invoice and it they are from your offshore ones, they know where to dig. If you then also open a bank account in Turkey or Georgia and pay from your company to there and then from that account to you, nobody will find out.

For your last question. Many Swiss like low tax places like Singapore, etc. I know less that would spend much time in middle East though. Even Georgia is a great place. Montenegro also popular, some like Malta too.

 

[JustAnotherNomad]

Why don't open a Dubai branch in a freezone by nominating a so called "General Manager"? In that case emitting invoices from there is not taxed, or not?

You would have to prove that the work is actually done from there and that you don't secretly run things from Switzerland.
That includes paying a realistic salary to the manager, renting an office, etc.
That all comes with additional costs.