Living in Denmark - Offshore Company Dropshipping

[Nakajima]

Hey there and thanks for tuning in!

I started dropshipping around 5-6 months ago with my girlfriend, and things turned out way more crazy than we expected. We began just the usual way of dropshipping from a supplier in china, by then moving on to importing our products Denmark and hitting around 6 figures monthly.

Thing is, due to Denmark having the highest or one of the highest taxes, we lose 25% in sales tax and 55% in income tax, making us lose a HUGE amount of profit. I wanna know how we can create a legal setup that can avoid this.

I know a friend who has a setup in HK owned by a trust(in his parents name) and by a nominee. He then hired himself through his UK company as a payment processor. All payouts are going through his company in UK, then he takes 2-5% and sends the rest to the other company in HK.

This would require us to stop importing and ship directly from China, which is fine btw

Any ideas on where I can seek help to make a setup similar or something else that works and is legal in Denmark?

Thank you!

 

[troubled soul]

Try Dubai free zone company setup.
There are many drop shipping business register here.

 

[CaptK]

You will need to follow what your friend has done. It's a good workable set up and continue shipping from China. I wouldn't use the HK company I would swap that out for a UAE Company.

UK company for payment processing, UAE Company as the "supplier" and you guys take a commission as the local agents.

 

[Nakajima]

You will need to follow what your friend has done. It's a good workable set up and continue shipping from China. I wouldn't use the HK company I would swap that out for a UAE Company.

UK company for payment processing, UAE Company as the "supplier" and you guys take a commission as the local agents.

Why the a company in UAE and not HK? Also, creating a UK company managing it from Denmark should be legal I think.

 

[Sols]

Generally speaking:

1. Big tax savings.
2. Legal.
3. Stay in Denmark (or swap in any other high-tax and tax-aggressive jurisdiction).

Pick two.

Speak with a local tax adviser to see if you can find a smarter way of paying yourself that doesn't involve quite so much tax. A lot of entrepreneurs forget to (legally) optimize for local taxation, especially those who have offshore in the back of their head. Unless you can afford to fully relocate operations of the company offshore (and only be a shareholder), whatever you do will end up resident in Denmark and subject to Danish tax.

The only somewhat realistic option aside from that would be to go for something like Isle of Man or Cyprus and have the company tax resident there through professional directors. You might still run into problem if you are subject to a strict audit or court proceedings, depending on amounts involved, how you pay yourself, and what part of the operations are still with you in Denmark.

 

[Nakajima]

Generally speaking:

1. Big tax savings.
2. Legal.
3. Stay in Denmark (or swap in any other high-tax and tax-aggressive jurisdiction).

Pick two.

Speak with a local tax adviser to see if you can find a smarter way of paying yourself that doesn't involve quite so much tax. A lot of entrepreneurs forget to (legally) optimize for local taxation, especially those who have offshore in the back of their head. Unless you can afford to fully relocate operations of the company offshore (and only be a shareholder), whatever you do will end up resident in Denmark and subject to Danish tax.

The only somewhat realistic option aside from that would be to go for something like Isle of Man or Cyprus and have the company tax resident there through professional directors. You might still run into problem if you are subject to a strict audit or court proceedings, depending on amounts involved, how you pay yourself, and what part of the operations are still with you in Denmark.

Thanks! The thing you mentioned "whatever you do will end up resident in Denmark and subject to Danish tax."

If company is in a nominee's name we will only pay taxes of the 2-5% we withdraw from the payouts correct?

 

[Mark Rucken]

There are so many otpions, but since you are from a highly regulated country that will not give up on tax that easily, I recommend you visit a local Agency specializing in international company structuring in order to find the best set-up that will be 100% legal in Denmark.

You might end up paying 10k a year for the set-up, but that is nothing in comparison how much you pay to the State at the moment.

 

[ImKing]

Why the a company in UAE and not HK? Also, creating a UK company managing it from Denmark should be legal I think.

You really want to speak with both a tax lawyer, check with Tommy V. Christiansen and some of the big tax advisor firms like Deliotte and PWC - you need them to back you up when the tax authorities come after you.

Denmark is a nightmare if you do international business as a small "guy on the floor" they simple rape you forth and back and will fine you as much as they can until you give up your business model. Denmark is not a country to live in unless you already have a lot of money to pay the professionals.

If you see my a*s, you know it has a hole as big to launching a rocket, it is really not funny.

If you don't have money or won't spend the money and sleep well, then relocate and find a place far away.

 

[Sols]

Thanks! The thing you mentioned "whatever you do will end up resident in Denmark and subject to Danish tax."

If company is in a nominee's name we will only pay taxes of the 2-5% we withdraw from the payouts correct?

No, tax residence in Denmark is determined by effective control and management. A nominee is just that — a nominee, just a name on a piece of paper. You're still exercising effective control and management, so the company in Danish.

 

[CaptK]

Thanks! The thing you mentioned "whatever you do will end up resident in Denmark and subject to Danish tax."

If company is in a nominee's name we will only pay taxes of the 2-5% we withdraw from the payouts correct?

If you use a nominee you will only pay what you send to yourself.

Or the UK company is yours and tax residents in Denmark. You pay the tax required but the majority of profit goes to the UAE company. UAE is your tax free end company but be sensible with the split. 10/90 is more feasible.

The aim is to pay enough to be able to move out for a year or two. Build as much money living in the UAE and then bring it back tax free. That way you then don't mind paying 50% on your profits as you have money in the bank.

Pay something don't look to not pay anything.

 

[ImKing]

Or the UK company is yours and tax residents in Denmark. You pay the tax required but the majority of profit goes to the UAE company. UAE is your tax free end company but be sensible with the split. 10/90 is more feasible.

You go straight into prison and risk HUGE - MEGA - ULTRA big fines if you try this s**t with the Danish tax authorities. They will refuse to accept it.

Don't believe what this guy try to tell you, he has made a living from selling nominee and other services, it does not work for Denmark, I demand him to stay out of the thread and don't post more rubbish like what he already did. @CaptK information is NOT valid.

If you follow this information, you will pay more in fines and fees including the risk of prison than what you ever could have imagine.

As I said, the only guys that can help you avoid big troubles are the one I mentioned in the last post. It will cost money, sure, it won't be easy, sure, but you can get a valid solution.

 

[CaptK]

You go straight into prison and risk HUGE - MEGA - ULTRA big fines if you try this s**t with the Danish tax authorities. They will refuse to accept it.

Don't believe what this guy try to tell you, he has made a living from selling nominee and other services, it does not work for Denmark, I demand him to stay out of the thread and don't post more rubbish like what he already did. @CaptK information is NOT valid.

If you follow this information, you will pay more in fines and fees including the risk of prison than what you ever could have imagine.

As I said, the only guys that can help you avoid big troubles are the one I mentioned in the last post. It will cost money, sure, it won't be easy, sure, but you can get a valid solution.

Ok........ his friend is doing exactly the same with HK company. The PWC and Delloite's of this world won't help you.

But yeah happy to stay out of this thread but on this particular case I actually have a client who lives in Odense who follows a similar structure.

4 years down the line has not had an issue this is tax planning and tax efficiency. Maybe the people you consulted in your structure didn't know what they were doing.

 

[JohnLocke]

You go straight into prison and risk HUGE - MEGA - ULTRA big fines if you try this s**t with the Danish tax authorities. They will refuse to accept it.

Don't believe what this guy try to tell you, he has made a living from selling nominee and other services, it does not work for Denmark, I demand him to stay out of the thread and don't post more rubbish like what he already did. @CaptK information is NOT valid.

If you follow this information, you will pay more in fines and fees including the risk of prison than what you ever could have imagine.

As I said, the only guys that can help you avoid big troubles are the one I mentioned in the last post. It will cost money, sure, it won't be easy, sure, but you can get a valid solution.

Ok........ his friend is doing exactly the same with HK company. The PWC and Delloite's of this world won't help you.

But yeah happy to stay out of this thread but on this particular case I actually have a client who lives in Odense who follows a similar structure.

4 years down the line has not had an issue this is tax planning and tax efficiency. Maybe the people you consulted in your structure didn't know what they were doing.

Who stays out of the thread or not is not up to you @ImKing to decide, that's one of my tasks

This is a discussion forum and everyone can join a discussion as long as it isn't violating any forum rules!

 

[Nakajima]

Ok........ his friend is doing exactly the same with HK company. The PWC and Delloite's of this world won't help you.

But yeah happy to stay out of this thread but on this particular case I actually have a client who lives in Odense who follows a similar structure.

4 years down the line has not had an issue this is tax planning and tax efficiency. Maybe the people you consulted in your structure didn't know what they were doing.

Ok........ his friend is doing exactly the same with HK company. The PWC and Delloite's of this world won't help you.

But yeah happy to stay out of this thread but on this particular case I actually have a client who lives in Odense who follows a similar structure.

4 years down the line has not had an issue this is tax planning and tax efficiency. Maybe the people you consulted in your structure didn't know what they were doing.

Who stays out of the thread or not is not up to you @ImKing to decide, that's one of my tasks

This is a discussion forum and everyone can join a discussion as long as it isn't violating any forum rules!

Would it be possible to move to UK and create the same setup and just live there for some time?

 

[CaptK]

Would it be possible to move to UK and create the same setup and just live there for some time?

Yes that would work. The thing you have to remember with aggressive states like the Nordics your plan has to be to leave.

Then build your fortune and then come back in after. At the beginning you need to work smart.

 

[pesto]

Yes that would work. The thing you have to remember with aggressive states like the Nordics your plan has to be to leave.

you change your statement, that's good.

Indeed above is the only solution, it is pretty much what @ImKing tried to tell you already.

Looking at this thread, understanding how it works in Denmark and picking a simple city from Google does not make anyone to a specialist.

@Admin you should close this thread.

 

[JohnLocke]

Yes I will close this thread. We have discussed it and because at this point I know exactly what is true here and what is wrong we simply just close it.

Thanks for participating.

 

[JohnLocke]

After all this years stumbling over this thread again and decided to reopen it since it has still relevance for some or the other.