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Moving EU Company Funds to Offshore Company for Tax Purposes

ecky

New member
I came across the forum fairly recently as I am trying to figure out the best way to move my money out of an EU company, specifically Spain, so that I don't get stuck paying Spanish income tax when I pay myself a wage.

Quick background: I am a UK citizen, use a UK bank account I have had for many years as my main account but I have not lived in the UK for 12 years now. I am essentially not tax resident anywhere as I never spend more than 6 months in one place, but I am considering Panamanian residency down the line. As far as the UK goes this is fine as they use a territorial tax system. However in Spain they don't so I want to avoid paying myself directly from the Spanish company.

I have sold a family home after the death of a family member, the house was owned by a Spanish company (Company A). Company A will still operate but I want to move the majority of the funds out of it, so that I can reinvest them and avoid the Spanish tax system. To do this I have setup a Wyoming based LLC (Company B). Once I have the money in the Company B it won't be a problem as they have no state taxes and I have no personal income taxes. The problem I am having is how best to move the money from the Company A to Company B.

Could I simply write a a large loan and set repayments far in the future and then write it off down the line? What is the best way to move the money from Company A to company B that wont raise suspicions or cause headaches down the road?
 

Konstanz

Active Member
Option 1 payout dividends and avoid possible troubles in the future and close spanish company.
Option 2 you need proper legal advice how to invest funds into other company and avoid problems
 

Gediminas

Offshore Tax Advisory
Mentor Group Gold
Commercial Service
Business Angel
I came across the forum fairly recently as I am trying to figure out the best way to move my money out of an EU company, specifically Spain, so that I don't get stuck paying Spanish income tax when I pay myself a wage.

Quick background: I am a UK citizen, use a UK bank account I have had for many years as my main account but I have not lived in the UK for 12 years now. I am essentially not tax resident anywhere as I never spend more than 6 months in one place, but I am considering Panamanian residency down the line. As far as the UK goes this is fine as they use a territorial tax system. However in Spain they don't so I want to avoid paying myself directly from the Spanish company.

I have sold a family home after the death of a family member, the house was owned by a Spanish company (Company A). Company A will still operate but I want to move the majority of the funds out of it, so that I can reinvest them and avoid the Spanish tax system. To do this I have setup a Wyoming based LLC (Company B). Once I have the money in the Company B it won't be a problem as they have no state taxes and I have no personal income taxes. The problem I am having is how best to move the money from the Company A to Company B.

Could I simply write a a large loan and set repayments far in the future and then write it off down the line? What is the best way to move the money from Company A to company B that wont raise suspicions or cause headaches down the road?
Man, I strongly suggest you consult with the tax advisor. Otherwise, you will get yourself into problems.

I can help you with that, feel free to email me. My partner is a guru, he can figure it out.
 

ecky

New member
Option 1 payout dividends and avoid possible troubles in the future and close spanish company.
Option 2 you need proper legal advice how to invest funds into other company and avoid problems
Option 1 wont work for a couple of reasons, but mainly the Spanish company needs to be operational at least in the short term (next year or so).

Option 2 is what I am trying to achieve but not entirely sure how. I was under the impression a company can just loan another company. I will be in control of both companies but not legally as part of Company A. Say for example Company A loaned Company B 400,000$ then 2 years from now Company A was dissolved before the loan was paid back, would this be possible?

Man, I strongly suggest you consult with the tax advisor. Otherwise, you will get yourself into problems.

I can help you with that, feel free to email me. My partner is a guru, he can figure it out.
Will do.

To be clear, all taxes and debts will be paid by Company A up until the point I want to move majority of funds over to Company B.

For example say there is 1 million USD in Company A, and I want to keep 200k in the company for it to operate but want to move 800k to Company B, which I will use to invest in shares and property and pay myself a wage.
 

ecky

New member
Well since I presume you own both the Spanish company and the future company in a tax haven, then your idea about a loan won´t work.
I don't actually own the first company, but I am in control of it. Shares are held by family members.

Even if I did though, why couldn't I just do an unsecured interest-free loan with no repayment plan? The company has paid all its corporate tax, surely it can do whatever it wants with what is left over?
 

ecky

New member
To put it simply - because the tax officers are not stupid. :)
haha fair enough, I thought it was going to be more complicated than that. What if I was to create a few different companies and do loans and investments into them so that its not all going to one place?
 

Gediminas

Offshore Tax Advisory
Mentor Group Gold
Commercial Service
Business Angel
haha fair enough, I thought it was going to be more complicated than that. What if I was to create a few different companies and do loans and investments into them so that its not all going to one place?
As I wrote to you in the email, I will update you on this case.
 

blockchain4ever

Active Member
Option 2 is what I am trying to achieve but not entirely sure how. I was under the impression a company can just loan another company. I will be in control of both companies but not legally as part of Company A. Say for example Company A loaned Company B 400,000$ then 2 years from now Company A was dissolved before the loan was paid back, would this be possible?
Typically depends on jurisdiction. In some places you cannot unless Company A is doing investments, Company B is doing the correct type of business etc. The risk being that it will be reclassified as dividends and withholding tax is applied.
 

ecky

New member
I’m not even sure what to say.
You better pay for some proper tax advice very soon before you get yourself into serious trouble.
I am in the middle of getting Panamanian residency, coronavirus basically stopped that. But will have it in place by the end of the year.
 

JustAnotherNomad

Entrepreneur
Panamanian residency is not some magic spell that will make the Spanish taxman go away. You seem to believe that if you stay 179 days in Spain, you will not be paying taxes in Spain, especially if you have paid someone in Panama a couple thousand dollars for giving you a plastic card.
If that’s really what you believe, you REALLY should save the money and spend it on a Spanish tax lawyer instead.
 

ecky

New member
Panamanian residency is not some magic spell that will make the Spanish taxman go away. You seem to believe that if you stay 179 days in Spain, you will not be paying taxes in Spain, especially if you have paid someone in Panama a couple thousand dollars for giving you a plastic card.
If that’s really what you believe, you REALLY should save the money and spend it on a Spanish tax lawyer instead.
Fully understand that.

Corporate tax has been paid, just don't want to pay out from the Spanish company and get stuck with income tax, want to move it over to a US LLC to reinvest in South American real estate.

Have a few different ideas how to do it, but likely will buy a small property in a non crs country and use that to get part of the funds out, then perhaps a cash injection into the US LLC that I will buy back in the future.
 

Narco

New member
Fully understand that.

Corporate tax has been paid, just don't want to pay out from the Spanish company and get stuck with income tax, want to move it over to a US LLC to reinvest in South American real estate.

Have a few different ideas how to do it, but likely will buy a small property in a non crs country and use that to get part of the funds out, then perhaps a cash injection into the US LLC that I will buy back in the future.
There are many ways, you just gotta be lucky finding a smart tax lawyer. What about buying a virtual property such as e-commerce from Company B? (Just an idea you can twist) Contracts stating that, etc.

Ignore those who have said pay taxes as that’s the easiest exit. As I said try to find a smart tax lawyer and study all possibilities.

Avoid panama (big red flag) and get UAE.
 

ecky

New member
There are many ways, you just gotta be lucky finding a smart tax lawyer. What about buying a virtual property such as e-commerce from Company B? (Just an idea you can twist) Contracts stating that, etc.

Ignore those who have said pay taxes as that’s the easiest exit. As I said try to find a smart tax lawyer and study all possibilities.

Avoid panama (big red flag) and get UAE.
Thanks for the input, that is actually something I am looking at as the sales tax in certain US states is small or non existent.

As for Panama, I actually lived there for 6 months in 2010. I have some very good contacts there and plan to focus on central/south America investments.
 

ikan

New member
Question ) Are the others family members share olders of Spanish company A aware and agreeing your plans ? If not ... Hummm !

If funds of company A are hold by spanish bank : not sure spanish bank will release the funds to Company B in USA the easy way to believe it ?
Spanish bank will be suspicious, and even if they comply the transfer, i guess they will clearly report this transaction (but will not tell you about it....).

•••• One silly strategy could be •••••• : Company A buy real estate in those countries you like so much (choose the best & most corrupted ones). With the pre-contract of sale fully legalised, you have most chances the Spanish bank will transfer in clear mode necessary funds for the property purchase. Wait and prepare next steps without sucribing insurance onto this new property. Organise "real fake" documents : the property had 100 % burnt (or" sunk into the sea" with hurricane - or local gang took it over.. or it could be a businness as well.) organise fruther legalised "real fake statements" the property/business and its soil is now worth almost nothing. Update accounting of Company A, assume huge Loss in the accounting. Later Company B buy for the cheap the property. After disclose company A with huge loss, or ask the Commercial Court in Spain to Disclose it due to huge loss, no assets, no turn over, no revenues and tax man is game over.
Silly, yes as well as lot of job to do- but good planification of the overall can do it.
 

CaptK

Company Formation, Bank Account, Real Estate
Mentor Group Gold
This made me laugh..........
What @ikan has said would work but a property leaves too much trail. I would go on the investment in a product/tech/service or start up.


For example forward purchase some wine for 2 years time. You will have to go there once (Paraguay) at least for 3 days. Then when delivery is due it doesn't turn up.

Take wine seller to court who cant be found.
 

ikan

New member
@ Captik : right and wise your are.

Pretty sure @ Ecky own Spanish Civil Real Estate company with no commercial purpose and restricted activites. Hard to justify such investment in products or services ....... Unless he can set up in Spain one new company B with commercial purpose hold by company A ?
 
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