Need help regarding Holding + Sub companies structure.

[Hackator]

Hi everyone,

Been looking at this forum for some times and today I would need advices from you guys.

I am planing to open a holding/trust, which will contain several sub companies, investments (stocks, crypto, ...) and assets.
I am looking for a location where taxes are low/none and won't share informations with europe and asia. (And preferably where inheritance is available)

At the same time at this holding, I will create a company that will offer consulting services worldwide.
Clients will pay either online, by crypto or by wire.
I will have suppliers, tools, locals and hardware to pay in several asian countries.

End profits from the consulting company are sent back to the holding.
And the holding will provide me back the profits by dividents (monthly).

As you can see both companies will need bank accounts.
The consulting one, should have a way to receive online payments, transferts, to have an international credit card, and to buy and sell crypto.

Also, I am a European national, right now living in Taiwan, but looking to move to germany in the next years. My goal is to pay no taxes, or as minimal taxes as possible. And I don't care that the goverenment of the holding is aware of who I am, as long as this is not accessible by other governements or the public. (For the consulting company, it will be owned by the holding, so my name is ok to appear as director)

Hope all this help you understand what I am trying to build. If not don't hesitate to ask me more details.
Thanks everyone.

Tried to create a schema to help.

 

[CyprusLawyer101]

Hi there,
The following are initial matters for your consideration before deciding on the optimum holding structure:
1. Where will be your personal tax residency;
2. Where will your operational companies be based ; this is impprtant to assess how income will be taxed when distributed to the holding company, what treaties would be applicable if any etc.
3. Where are your clients be based and whether the consulting will twke place on site or online/by phone/email;

Deciding on these should get you started.

Hope this helps.

 

[Hackator]

Thanks for the answer:
1- Taiwan, then next year Germany.
2- There is no specific base for the operational company, it could be created anywhere.
3- Clients will be worldwide and the business will be online.

 

[CyprusLawyer101]

Thanks for the answer:
1- Taiwan, then next year Germany.
2- There is no specific base for the operational company, it could be created anywhere.
3- Clients will be worldwide and the business will be online.

Hm..whatever you do you should consider creating enough substance at your place of incorporation to meet anti-avoidance rules requirements. Also if you will be in Germany, look for an EU country which also has a double tax treaty with Germany to establish your co so you may benefit from EU directives and EU principles such as the freedom of establishment. These could provide a counterbalance where german anti-avoidance rules go too far. All in all , substance would be key and preferably be set up and running before you go to Germany ( preferably during transit). Your best bet is to engage a german based international tax lawyer to guide you through potential tax risks.

 

[Hackator]

What is the risk of "anti-avoidance rules" if I pay income taxes on the dividends/salary that I receive from the company in the country I live?

 

[CyprusLawyer101]

What is the risk of "anti-avoidance rules" if I pay income taxes on the dividends/salary that I receive from the company in the country I live?

There are a few anti avoidance rules, most notably the CFC rules, which may attribute income generated by the company abroad to its controlling shareholder and tax it. This is an invasive approach but it is justified by the fact that a jurisdiction is trying to protect its tax base from erosion by diverting income outside the country which normally otherwise it would have been generated in the country and taxed.
I hope this is clear.

 

[James Turner]

I would agree with @Lawyer101 here that your biggest issue if you intend to become a resident of Germany are German CFC rules, which will result in tax on the companies profits in Germany unless sufficient economic substance exists in the country of formation. The CFC subject alone is worth further discussion if you would like.

 

[kranj99]

Just wondering how EU directives would work with regards to substance. Say the said poster becomes a German tax resident and then sets up their holding in another EU member state that has a slightly favourable holding regime, but not an all-out tax haven. For example The Netherlands, or Luxembourg. So if a German resident exercises treaty rights and establishes a holding in the NL, but there is no substance in the NL, would CFC rules overwrite EU rules and the NL holding entity becomes tax resident in Germany?