Life after Georgia - Best low-tax country within EU

[FantomOffshore]

Hi guys,

Last year I've traveled through Georgia and absolutely loved it, sadly the large influx of Russians and geographical distance from Western-Europe has sort of made me rethink my initial plan to move and set-up my IT businesses there. I make good money working as a freelancer 80K+ and have side-gigs that generate about 30/40K for minimal work (I want to scale those once I am tax-free). What initially drew me to Georgia was the mountains and the incredibly cheap housing (allowing me to save up for housing in my home country and invest money in stocks) and option to live there for a year and more for about 1% tax while owning a property.

I've visited Georgia and absolutely loved it, especially the Svaneti mountain region. I would love to live in Batumi and be able to take weekend trips to Mestia. I also liked the people and the culture, basically everything although the food got bland after a while there was great Thai food in a lot of places as well as Chinese. Permanently settling however would mean annoying flights with a layover in Poland every time if I want to visit friends or family which is just not ideal for me. On top of that I have IT equipment that I would much prefer to move by car or train from Western Europe. On top of that the Russian influx has made the local populace significantly less friendly which is kind of a deal-breaker. I does not help that my name is really common in Russia although I am from Western Europe.

I was hoping to get a tip or advice from somebody here as I have now been reading and reading for two years but am kind of struck by analysis-paralysis. Estonia seems nice but only allow you to stay for one year which is not what I want, I basically want to buy a decently sized apartment and set up my business inside there. Move all equipment there and stay for more than 1 year for like 260 days per year.

What I am looking for in a country is the following:

- Decent internet-speed, preferably 100 Mb/s
- Preferably mountainous (or in the vicinity of mountains), I love mountains!
- Preferably has cold winters, heat is okay but no Asian humidity / perpetual summer.
- Ability to walk or cycle in cities - size of city does not matter
- Max income tax of 10 / 15%
- Banking that won't pose huge problems or sleepless nights over corrupt officials / bankers / payment processing shenanigans.

All my income is foreign-sourced. Portugal has been looking interesting for me, Montenegro looks cool, Serbia never struck me as particularly friendly to foreigners. The draw of Yerevan is strong but has the same problem Georgia has (which can be overcome but still). Any advice or direction would be greatly appreciated!

 

[12345]

Hi, have you checked Ireland? Seems like a good fit for you thanks

 

[polonieth]

Bulgaria. Plenty of mountains. Vitosha is right on the doorstep of Sofia.

 

[FantomOffshore]

Hi, have you checked Ireland? Seems like a good fit for you thanks

Does Ireland have special incentives for "nomads" or IT businesses? I just checked and could not find anything in particular. Country is brilliant though, would love to live there.

 

[CyprusLawyer101]

Have a look at Cyprus. Provides both mountains and the mediterrenean sea

 

[khinkali]

All my income is foreign-sourced.

I recommend that you triple check that. The definition varies from place to place and can be quite disappointing.

You like mountains. Maybe look into Andorra?

 

[Spinat]

Austria and Switzerland have lot of mountains.

 

[FantomOffshore]

I recommend that you triple check that. The definition varies from place to place and can be quite disappointing.

You like mountains. Maybe look into Andorra?

Thanks for the tip, for Georgia it seems registering for small-business is best. My definition of foreign-sourced was definitely not what I thought it was for that country.

I looked into Andorra but for that money I would much rather live in Georgia. Also, my income is good now but no one knows what the future holds.

I guess I should just go to Georgia again and move all my stuff by plane. While Bulgaria is enticing, the Caucasus Mountains are just that more impressive and Georgia has a special place in my heart.

I kind of feel the Caucasus has spoiled a lot of places for me as they are just so incredibly impressive and wild.

Austria and Switzerland have lot of mountains.

I love Austria, have been there many times, but the income taxes there are incredibly high. Am not rich enough for Switzerland sadly.

 

[khinkali]

I mention Andorra because people seem to like the lifestyle but yes, definitely expensive.

Thanks for the tip, for Georgia it seems registering for small-business is best. My definition of foreign-sourced was definitely not what I thought it was for that country.

If you have crypto income, you should check that the small business rules don't cause a problem. This might not matter in your case but there seems to be some risk of turnover being taxed, which would be horrendous with algo trading for example.

I am not qualified to give tax advice but it might be worth considering a mix of natural person for some activity with LLC for other activities. That's what I'm currently looking into.

 

[Dexur]

Romania is cheap, has amazing internet, mountains and a sea.
On top of that it has around 10% total tax (corporate + dividend) for micro companies ( up to 500k per year).
I'm moving there myself from Finland now

 

[backpacker]

I guess I should just go to Georgia again

Do NOT do it! Moreover, taxation has it's pitfalls and is about to change.
You got a wealth of suggestions in this thread. Pick one or look further.

 

[TheCryptoAnt]

- Decent internet-speed, preferably 100 Mb/s
- Preferably mountainous (or in the vicinity of mountains), I love mountains!
- Preferably has cold winters, heat is okay but no Asian humidity / perpetual summer.
- Ability to walk or cycle in cities - size of city does not matter
- Max income tax of 10 / 15%
- Banking that won't pose huge problems or sleepless nights over corrupt officials / bankers / payment processing shenanigans.

Romania, although Romanian banking is kinda trash but can be fixed with EMIs

 

[oldtimer2]

Do NOT do it! Moreover, taxation has it's pitfalls and is about to change.
You got a wealth of suggestions in this thread. Pick one or look further.

Hi everyone. I agree with FantomOffshore on many points about Georgia - love the country and love the people. However it is one of those countries where the Revenue Service interpretation of the law can backflip at any moment. Also, some laws are written very vaguely, which enables those sorts of interpretation backflips. Yes you can get advance tax rulings and it would be wise to do so if expecting to earn larger sums in a Georgian set up. Also, the government is not even handed about how it applies the law. Also, if you search for posts by the chairman of the International Chamber of Commerce in Georgia you will hear some hair raising stories that help to explain why many large companies were happy to have large bases in Russia (and even smaller ones in Armenia) but relatively very very few in Georgia. I know of companies mid way through investing large sums in Georgia and then running into 'administrative issues' that meant the project could not proceed, resulting in a windfall for certain Georgian parties and the foreigner suffering losses and departing never to return. It is the kind of story referred to by the ICC chairman. It is unheard of for a chairman of a national ICC to call the local government 'pirates' but sadly this is the case in Georgia. Be that as it may, for small/er activities that can easily relocate if necessary then I think Georgia with care can be fine. However, if you long for mountains and wonderful nature in a country similar to Georgia but in a more 'reliable' political and tax environment then you are probably looking at France Italy or Switzerland etc. Sadly you need to be in a higher income earning bracket and happy to pay 100k a year in fixed tax (in Italy for example). Maybe Slovenia or nearby might be worth a look. Never been but read its beautiful. Isle of Man might be another location but no mountains and only 2 full double tax treaties and windy and wet they say . Sorry I do not have any better advice for people who want to be able to sleep easy at night because their business structure is clean and straightforward. Personally, I grapple with the same subjects as FantomOffshore - but have not found any good answer yet myself for when the high priorities are great mountains, wonderful nature, reasonably solid government and tax rules, lower tax and supporting a clean business structure.

Backpacker: What taxes are about to change in Georgia? There are always rumours but maybe you have heard something more certain about pending changes? If so then I would greatly appreciate it f you could post about the specific changes here. Thanks.

 

[Marzio]

in a more 'reliable' political and tax environment then you are probably looking at France, Italy

You prepared the joke so well with your introduction that when i reached that phrase i couldn't help but LOL

Having reliable tax environment and Italy or France in the same sentence is an oxymoron.

 

[oldtimer2]

You prepared the joke so well with your introduction that when i reached that phrase i couldn't help but LOL

Having reliable tax environment and Italy or France in the same sentence is an oxymoron.

Its true . I was talking about the beauty of mountains and beautiful nature side - and accessing Italy or Switzerland through a fixed tax program. As I said, I have not found any solution like what FantomOffshore is looking for - I am searching for the same kind of place .

 

[backpacker]

Hi everyone. I agree with FantomOffshore on many points about Georgia - love the country and love the people. However it is one of those countries where the Revenue Service interpretation of the law can backflip at any moment. Also, some laws are written very vaguely, which enables those sorts of interpretation backflips. Yes you can get advance tax rulings and it would be wise to do so if expecting to earn larger sums in a Georgian set up. Also, the government is not even handed about how it applies the law. Also, if you search for posts by the chairman of the International Chamber of Commerce in Georgia you will hear some hair raising stories that help to explain why many large companies were happy to have large bases in Russia (and even smaller ones in Armenia) but relatively very very few in Georgia. I know of companies mid way through investing large sums in Georgia and then running into 'administrative issues' that meant the project could not proceed, resulting in a windfall for certain Georgian parties and the foreigner suffering losses and departing never to return. It is the kind of story referred to by the ICC chairman. It is unheard of for a chairman of a national ICC to call the local government 'pirates' but sadly this is the case in Georgia. Be that as it may, for small/er activities that can easily relocate if necessary then I think Georgia with care can be fine. However, if you long for mountains and wonderful nature in a country similar to Georgia but in a more 'reliable' political and tax environment then you are probably looking at France Italy or Switzerland etc. Sadly you need to be in a higher income earning bracket and happy to pay 100k a year in fixed tax (in Italy for example). Maybe Slovenia or nearby might be worth a look. Never been but read its beautiful. Isle of Man might be another location but no mountains and only 2 full double tax treaties and windy and wet they say . Sorry I do not have any better advice for people who want to be able to sleep easy at night because their business structure is clean and straightforward. Personally, I grapple with the same subjects as FantomOffshore - but have not found any good answer yet myself for when the high priorities are great mountains, wonderful nature, reasonably solid government and tax rules, lower tax and supporting a clean business structure.

Backpacker: What taxes are about to change in Georgia? There are always rumours but maybe you have heard something more certain about pending changes? If so then I would greatly appreciate it f you could post about the specific changes here. Thanks.

I second that.
It is refreshing to see that at least a few people out there understand that Georgia is not the reliable partner most want to see in it. Specifically when it comes to taxation the country has rather dubious habits. Auditors at Revenue Service do not even know how to use/interpret their own laws and rulings. So, anybody who wants to build something serious in that country as a foreigner is usually doomed.
Add to it that Georgia's shaky legal system with court rulings that are dubious at best, and you have a toxic mix.
Everybody knows about the "back taxing" of virtual zone companies, the new VAT rules, the dubious interpretation of VAT rules in case you sell more than one apartment as a private individual ..... .
Moreover, with the influx of all these Russians local prices have skyrocketed. Even groceries are now cheaper in Switzerland than they are in Georgia (well, except you want to live on Khachapuri).

Now to your question: The current ruling party never liked what their predecessor did, specifically with regards to taxation. This is not surprising because the current tax law puts the working population at a significant disadvantage compared to the wealthy upper class. The government tried it's best to close loopholes, changed VAT rules, toughened income tax rules for real estate speculators .... . However, they were unable to fundamentally overhaul the base principles of the tax system because such amendments are prohibited by the constitution until 2023 (except they would have asked the people of Georgia in a popular vote).
So, since they are quite successful with fulfilling EU-demands and get a lot in return (next will be Georgia joining SEPA -> NBG Applies for SEPA Membership ) it is the territorial taxation which they still have to abolish. In return they will lower average tax rates for the local population (20% is considered to be too high). I wrote about the schedule and what to expect over here -> Structuring for < $100,000
In the meantime I can only warn about the dubious interpretation of laws in Georgia. Do take note that -for instance- Article 104.q of the Georgian Tax Code can always be used against anybody and anything, also backwards. Art. 104.q can transform almost any activity from foreign sourced income to Georgian sourced income with the consequence of full tax liability. Have fun with such a shaky law!

Mountains, scenery, nature: Not a reason to stick with Georgia.
Look into Bulgaria (think about Rhodope) or, as @oldtimer2 suggested, into Slovenia. On top of it you will also get a more healthy cuisine, good infrastructure + plenty of cultural events. Or, if direct sea access isn't required, Slovakia (High Tatras) can be an interesting alternative.

 

[FantomOffshore]

I second that.
It is refreshing to see that at least a few people out there understand that Georgia is not the reliable partner most want to see in it. Specifically when it comes to taxation the country has rather dubious habits. Auditors at Revenue Service do not even know how to use/interpret their own laws and rulings. So, anybody who wants to build something serious in that country as a foreigner is usually doomed.
Add to it that Georgia's shaky legal system with court rulings that are dubious at best, and you have a toxic mix.
Everybody knows about the "back taxing" of virtual zone companies, the new VAT rules, the dubious interpretation of VAT rules in case you sell more than one apartment as a private individual ..... .
Moreover, with the influx of all these Russians local prices have skyrocketed. Even groceries are now cheaper in Switzerland than they are in Georgia (well, except you want to live on Khachapuri).

Now to your question: The current ruling party never liked what their predecessor did, specifically with regards to taxation. This is not surprising because the current tax law puts the working population at a significant disadvantage compared to the wealthy upper class. The government tried it's best to close loopholes, changed VAT rules, toughened income tax rules for real estate speculators .... . However, they were unable to fundamentally overhaul the base principles of the tax system because such amendments are prohibited by the constitution until 2023 (except they would have asked the people of Georgia in a popular vote).
So, since they are quite successful with fulfilling EU-demands and get a lot in return (next will be Georgia joining SEPA -> NBG Applies for SEPA Membership ) it is the territorial taxation which they still have to abolish. In return they will lower average tax rates for the local population (20% is considered to be too high). I wrote about the schedule and what to expect over here -> Structuring for < $100,000
In the meantime I can only warn about the dubious interpretation of laws in Georgia. Do take note that -for instance- Article 104.q of the Georgian Tax Code can always be used against anybody and anything, also backwards. Art. 104.q can transform almost any activity from foreign sourced income to Georgian sourced income with the consequence of full tax liability. Have fun with such a shaky law!

Mountains, scenery, nature: Not a reason to stick with Georgia.
Look into Bulgaria (think about Rhodope) or, as @oldtimer2 suggested, into Slovenia. On top of it you will also get a more healthy cuisine, good infrastructure + plenty of cultural events. Or, if direct sea access isn't required, Slovakia (High Tatras) can be an interesting alternative.w

Well, this is all very good advice and I really appreciate it. Actually, upon second examination, I am now exploring Andorra again. My main problem was that I could only rent large spaces for families there, but I managed to find some apartments which look perfect. The proximity to France and Spain are also just brilliant, and I could even get there by train to move some IT equipment and then arrange for transport into Andorra from France. All just perfect.

 

[backpacker]

Well, this is all very good advice and I really appreciate it. Actually, upon second examination, I am now exploring Andorra again. My main problem was that I could only rent large spaces for families there, but I managed to find some apartments which look perfect. The proximity to France and Spain are also just brilliant, and I could even get there by train to move some IT equipment and then arrange for transport into Andorra from France. All just perfect.

I am glad you found something suitable. Take it and forget about Georgia.
Out of curiosity: How much is currently the monthly rent for a one-bedroom-apartment (i.e. living room + separate bedroom) in Andorra?

 

[FantomOffshore]

I am glad you found something suitable. Take it and forget about Georgia.
Out of curiosity: How much is currently the monthly rent for a one-bedroom-apartment (i.e. living room + separate bedroom) in Andorra?

Well, from what I see right now between €600 and €1000. Actually quite cheap considering the nature and quality of life there, especially if you like French and Spanish cuisine ;-).

My plan is to move in February or March, if you want I can give you an update if I discover other niceties pertaining to Andorra.

If rents are truly as low as I am seeing now it is an absolute no-brainer for me as mountains and French cuisine are among the things I love most in life.

The mountains are of course not as challenging from a mountaineering perspective but since I still have to work that might be for the best before I get seduced into proper mountaineering.

I thought I was limited to renting a €2000 -€3500 ski-village chalet and am very pleasantly surprised.

The biggest con for most people would be (I guess) that the lifestyle is relatively secluded with no big clubs and cultural activities, but I've rarely found the time nor the willingness to be severly hung-over the past year.

 

[backpacker]

Well, from what I see right now between €600 and €1000. Actually quite cheap considering the nature and quality of life there, especially if you like French and Spanish cuisine ;-).

My plan is to move in February or March, if you want I can give you an update if I discover other niceties pertaining to Andorra.

If rents are truly as low as I am seeing now it is an absolute no-brainer for me as mountains and French cuisine are among the things I love most in life.

The mountains are of course not as challenging from a mountaineering perspective but since I still have to work that might be for the best before I get seduced into proper mountaineering.

I thought I was limited to renting a €2000 -€3500 ski-village chalet and am very pleasantly surprised.

The biggest con for most people would be (I guess) that the lifestyle is relatively secluded with no big clubs and cultural activities, but I've rarely found the time nor the willingness to be severly hung-over the past year.

That was I was asking about the rent: Apartments of that size seem to be listed anywhere between EUR 600 and EUR 1'000.- which I found very reasonable for Andorra.
So, please give an update once you signed the rental contract.