low tax country for music business

[Max Folech]

Hey everyone! My name is Max, and I seek any advice from you guys!
My friend and I are working on a commercial project, and we decided to incorporate in some low tax country (or not, we just want to make business more profitable for us). The project overall is a web platform, a marketplace for selling music tracks. And here is my question: do you guys know any tax efficient jurisdiction for such music business?
Providing you with some more details: my friend and i are both based in Russia, and our employees will be Russian residents too (at the beginning at least). Our platform is supposed to receive payments from all over the globe, and all business will be carried out online. Daily management and control will be performed from Russia.
I am aware that music industry is more complicated than general trading, as one has to deal with IP management and protection (copyright and all that). I'm currently looking into Lithuania (i'm more into MB structure, but UAB is looking good also), but British LLP and US multi-member LLC seem great to me. As i understand, in Lithuania employer must pay social security, pension contributions, etc even for a non-resident remote worker. So could i avoid paying all these contributions to "Sodra" by hiring a contractor or employer of record?
Or i might be wrong at all, and the answer lies in the opposite direction.
Any info from you will help!

 

[troubled soul]

Not low but Tax free solution
Do look into Dubai free zone .

https://dmc.ae/

18.7.3 Digital Media Library, Distribution and Management (Companies engaged in maintaining, managing and distributing electronic online library of media such as images, films, video clips and music)

Cost will be high for Dubai media city.
But For long term no hassle, no tax , worry free solution will be Dubai Media City.

Hope this help.
I am not expert do consult legal advisor before taking any decision.

Thanks

 

[JustAnotherNomad]

If you are Russian tax residents and you have Russian employees, you will have to pay tax for that company in Russia. But I don't know how strict Russia is with enforcing that.
In theory, you could at least hold the IP in an offshore company, but Russia has introduced CFC rules, so that won't be an option either.
There's probably no cheap legal/compliant way for you to save on taxes here, but I guess it's possible that the Russian authorities aren't good at enforcing the rules for small fish.
If you are looking for a legal structure, I would recommend you to talk to a Russian advisor, or someone specializing in Russian clients.
You could try Eltoma Global. I don't have any experience with them, but I believe they work a lot with Russian clients. There are probably lots of suitable advisors in Cyprus in general.
Regarding Lithuania, you should probably contact @Gediminas .

 

[CyprusLaw]

Hey everyone! My name is Max, and I seek any advice from you guys!
My friend and I are working on a commercial project, and we decided to incorporate in some low tax country (or not, we just want to make business more profitable for us). The project overall is a web platform, a marketplace for selling music tracks. And here is my question: do you guys know any tax efficient jurisdiction for such music business?
Providing you with some more details: my friend and i are both based in Russia, and our employees will be Russian residents too (at the beginning at least). Our platform is supposed to receive payments from all over the globe, and all business will be carried out online. Daily management and control will be performed from Russia.
I am aware that music industry is more complicated than general trading, as one has to deal with IP management and protection (copyright and all that). I'm currently looking into Lithuania (i'm more into MB structure, but UAB is looking good also), but British LLP and US multi-member LLC seem great to me. As i understand, in Lithuania employer must pay social security, pension contributions, etc even for a non-resident remote worker. So could i avoid paying all these contributions to "Sodra" by hiring a contractor or employer of record?
Or i might be wrong at all, and the answer lies in the opposite direction.
Any info from you will help!

A lot of Russian businesses set up in Cyprus so this would be a good option. Provided that everything is structured properly you would be paying 12.5% corp tax on company profits. I stress that there should be proper structuring.

 

[Fred]

Hey everyone! My name is Max, and I seek any advice from you guys!
My friend and I are working on a commercial project, and we decided to incorporate in some low tax country (or not, we just want to make business more profitable for us). The project overall is a web platform, a marketplace for selling music tracks. And here is my question: do you guys know any tax efficient jurisdiction for such music business?
Providing you with some more details: my friend and i are both based in Russia, and our employees will be Russian residents too (at the beginning at least). Our platform is supposed to receive payments from all over the globe, and all business will be carried out online. Daily management and control will be performed from Russia.
I am aware that music industry is more complicated than general trading, as one has to deal with IP management and protection (copyright and all that). I'm currently looking into Lithuania (i'm more into MB structure, but UAB is looking good also), but British LLP and US multi-member LLC seem great to me. As i understand, in Lithuania employer must pay social security, pension contributions, etc even for a non-resident remote worker. So could i avoid paying all these contributions to "Sodra" by hiring a contractor or employer of record?
Or i might be wrong at all, and the answer lies in the opposite direction.
Any info from you will help!

If your place of management is Russia - everything you setup Offshore in the EU will be reported under CRS and gets you in trouble from the Russia side.

If you want to go offshore then do it without compromise like mentioned from @azb1. Setup won't be cheap but I guess you are running some good numbers if you are looking for Offshore solutions.

A lot of Russians are moving there business at least to Dubai right now as everything else is not reliable you end up banking on EMI's that rip you off with fees or still you have to pay taxes like Estonia, Cyprus etc.

Especially since the citizenship by investment was stopped by Cyprus it's getting unattractive for most Russian - at least for the big ones with significant wealth.

 

[Mr Gus]

Probably Dubai is your best bet if you are Russian, you will not having problems getting a residence visa and setting up a company as a Russian. I believe it is more challenging for Russian to get residence and setup companies in the EU.

And like Fred said you will be reported under CRS as a Russian. I believe Russia also started cracking down on tax avoiders/evaders recently.

 

[Max Folech]

Not low but Tax free solution
Do look into Dubai free zone .

https://dmc.ae/



Cost will be high for Dubai media city.
But For long term no hassle, no tax , worry free solution will be Dubai Media City.

Hope this help.
I am not expert do consult legal advisor before taking any decision.

Thanks

Thanks mate! This do helps. What do you think about Abu Dhabi Media Free Zone and Sharjah Media City? These two seem to be cheaper than Duabai.
And what about management and control rules in UAE ? I found out recently, that company dealing with IP is eligible for econimical substance test i.e. have real office, local employees and conduct its business from UAE

 

[Max Folech]

A lot of Russian businesses set up in Cyprus so this would be a good option. Provided that everything is structured properly you would be paying 12.5% corp tax on company profits. I stress that there should be proper structuring.

Thank you for your advise. I've been looking at Cyprus too. But a company is resident in Cyprus if its control and management are exercised in Cyprus, is this true? If so i would have to relocate to Cyprus?

 

[CyprusLaw]

Thank you for your advise. I've been looking at Cyprus too. But a company is resident in Cyprus if its control and management are exercised in Cyprus, is this true? If so i would have to relocate to Cyprus?

Ideally relocating to Cyprus would be the most concrete structure and also the best tax optimization move. But, if you don’t want to do this you will need to have a nominee director, this will show that management and control is in Cyprus. Nominee directors still work as a structure in Cyprus and are not challenged by the tax authorities

 

[Max Folech]

Ideally relocating to Cyprus would be the most concrete structure and also the best tax optimization move. But, if you don’t want to do this you will need to have a nominee director, this will show that management and control is in Cyprus. Nominee directors still work as a structure in Cyprus and are not challenged by the tax authorities

Thank you for sharing this info with me