Looking for the best solution

[sergeylim88]

So here are the basic facts:

Current place of legal residence is Montenegro
Citizenship I have are both Montenegro and one EU country

Offshore company I have is in Belize.
Company has nominee director.
Company bank account is in Cyprus bank.

I sell digital good mostly to US and Canada. I do this for few year already.
All the money earned is on the company's ban account and I am the beneficial owner.

The problems I am facing is the Montenegro law that says following:
Company is considered resident tax payer if it is founded or has management takes place on teritory of Montenegro.

I am afraid that I might be in the part that the management takes place on teritory of Montenegro. Since I live here, and I do run company from here even tough I have nominee director.

I some bank statements in Cyprus, the physical address is my Montenegro address, and explaination on that document is that physical address = address where management takes place.

My question is what would you do in my place to become 100% legit?
Should I move somewhere for 6 months with declaring residency, and then paying all the money from my company as dividends to my personal account.
Then I can even declare I have that money which I made while I was in foreghin country.

What should I do?

 

[GrumpyMess]

The same situation but another country. Unfortunately there are too little countries which do no tax dividents or have no personal tax, and most of them are shitholes.

To be 100% legit you also need to become non resident in your home country.

 

[Jav]

You don't want to pay any tax so you need to be a tax resident in 0% tax jurisdiction. There are plenty. What are the tax rates in Montenegro?

 

[JohnLocke]

It's what has been discussed a lot of times here already. Most countries in Europe have this rule, you will need to proof that management, and control is in the country where the company is registered in order to avoid to be taxed from worldwide income.

There is a lot of administration and documentation required to do so. Best is to consult a tax consultancy firm in your country which can help you find a solution for what you are looking for.

 

[sergeylim88]

Thank you all for the answers.

But we have to split taxes in two categories:
1st = corporate tax that company pays on it's profits
2nd = dividend tax that is paid by owner of company who gets dividends.

For 2nd I know I have to be in country that has no income tax, or in country that has flat tax (or tax rate) for foreigner income.

My question is about the 1st. As I stated in Montenegro there is a part of the law that says if you management is in the country, the company will become a tax resident (corporate tax will have to be paid in Montenegro).
Admin understood what I mean.

So, @Admin , what should I do prove that management, and control is in the country where the company is registered? I do have the registered address (same place where agent is LOL), and nominee director.
I can find someone from Belize, and give them like 100-150$ a month salary, and sign a contract with them so it can appear that the company really does exist there and it has employees. What do you think about this idea?
Can you point me to certain threads which you recommend me to read? I did search the forum and I can't find anything.

Worst case scenario would be moving to another country, that has low or 0% income tax, and has no CFC(because I don't want to pay tax for company profits for those 6 months I live there). Would you be able to tell me which countries should I look more close?

 

[JohnLocke]

I can find someone from Belize, and give them like 100-150$ a month salary, and sign a contract with them so it can appear that the company really does exist there and it has employees. What do you think about this idea?

That's a really good start. You may even consider to rent a small office there in order to make this setup complete.

 

[countryfree]

Is it worth it?
I think tax rate for companies in Montenegro is only 9%, so you should consider the cost of paying a reliable partner in Belize, and the cost of getting residency in another country.
Besides, if the company isn't registered in MNE, and if it doesn't do any business locally, how will the MNE tax man know about it?

 

[negon]

Best would be to cooperate with a local tax consultant in order to get a clean setup for this, there will always be some portion of risk left that they will refuse to recognize this structure.

 

[KJK]

I think you're a lucky guy to be born in Montenegro (let's not go through the recent history of civil war etc...). Such a nice, business friendly, no bulls**t country.
Many other people in Europe (not just in Europe) can envy you.

Yes, your company's management definitely takes place in Montenegro.
I think with your current setup you cannot truly be 100% legit according to law - so in the end it really depends on the practical implications.
Whether someone will be interested in you, whether you do something strange etc (and you yourself or a local advisor probably know the answer better than anyone on the forum)

 

[sergeylim88]

Thank you everyone for answer.
I was not born in Montenegro, I just acquired their citizenship (by father who is citizen), and EU citizen by mother (who is from EU country where I do not live and I never lived there)

As I stated before my company has nominee director, and that is something compared to a situation where you are personaly director.

I have some questions:
1. How do I prove that company has a rented office?
I do have registered office there (done by offshore agent). If I rent another office, do I have to inform Belize authorities or I just sign a contract and that is it, and that contact is the proof that I have rented office?

2. Can the person that works for me(Belize) rent me one room in their apartment as an office (contact can even say their entire apartment)?
Is this a good idea to do? this way I could pay some utility on company name, and I have utility bill for the services that require it?

3. According to Belize law I can not do any business in Belize, but I can have office and I can have people working with me.
Is this true, and would this setup cause me any issues/troubles?

If there is something else I need to pay attention to, let me know please.

All this is done in order to avoid CFC. I might move to Malta for 6 months as well, so all this has to work long term for Malta and Montenegro.