Hello, I am very new hear, but was ecstatic to find such a well-maintained community of experts and people who share similar situations. Thank you so much in advance for any guidance.
My sincere apologies if this is not the right place to post this.
I would like to say that I have a rather unique situation; however, it may not be so unique to an expert who deals with this frequently. Whether my situation is unique or not, I do know that I have a lot of flexibility and options.
In an attempt to paint a sufficient picture of my situation below, I will apologize in advance for any extraneous information that I provide.
Let’s start with my background…
I am a United States citizen who currently serve as a Principal for an American-based consulting agency. Most of our clients & projects are based in the United States; however, we often get medium-term projects in various countries from time to time.
Because of these projects, I am currently living in Spain while being paid by my American employer.
My employer is currently my only source of income.
How I came to live in Europe for the last several years...
In late 2016, we were hired to manage a large-scale project that spanned the entire European Union - this is when I moved from the United States to Europe to set up and manage this project.
The first few months, I was living out of hotel rooms in the various countries where we planned to have activity and was operating on a tourist visa. Then in early 2017, I settled into London and used that as our project’s main base (still operating on a tourist visa).
In May of 2017, the cold weather of London finally got to me, so I decided to open another office in Spain. Once I settled into Spain, the founder of my company & I travelled to Madrid to meet with attorneys to set up a Spanish entity & begin the process of acquiring a work visa.
In March of 2019, the Spanish government finally issued me a work visa.
How I realized I was in need of a proper consultation…
With this past year being the first on a work visa, I realized I needed to consult an expatriate accountant as well as a Spanish accountant to understand what I needed to do in order to remain compliant with the tax laws.
I got great news from the American accountants who informed me that I was eligible to submit an amended return for 2017 & 2018 since I was out of the United States for nearly the entire year - and that would result in a refund.
Unfortunately, from the Spanish accountant, the news was significantly more somber. He informed me that I would likely have to pay a tax rate of 50%+ given my income level.
This was a massive gut-punch.
I quickly realized, especially considering that I control many flexible variables, that there must be a smarter way to set up a proper structure to lower my tax responsibility while still enjoying my quality of life.
Variables that I think could be helpful...
I am more than certain that my current employer would be willing to pay me as a consultant who operates his own company in another country.
I am also confident that my current employer would be willing to lower my salary to pay for some expenses directly (i.e. rent).
I am willing to move somewhere else; however, I’d prefer to stay in Spain. Although, if it will save me tens of thousands on my tax bill every year - I am very open-minded.
If it makes sense to set up a new company in another country - at the moment, there are two other employees in our European operation. I could also explore the possibility of moving them to this new company payroll if there is a requirement to employ. When a bigger international project comes, it’s not uncommon for us to need to hire up to a dozen or more core staff as well. Again, not sure if this matters, but wanted to put it on your radar.
I have a long-term on & off girlfriend who is a United States citizen & carries a Montenegro passport as well (currently living in New York City). I know Montenegro has some advantages, but not sure what complexities exist after legally marrying someone with a passport from the country. Might be a crazy idea, but wanted to flag it for you.
One final thing to consider…
Recently, in an unrelated conversation, a few friends and I were discussing setting up a holding company where we each have our individual companies invested. With this main holding company, we were considering business ventures or real estate acquisitions to turn them into income properties via AirBnb or similar.
Even though this is something we are planning to do, I figured it might factor into your proposed strategy for my personal situation.
I really cannot thank you enough for your time.
My sincere apologies if this is not the right place to post this.
I would like to say that I have a rather unique situation; however, it may not be so unique to an expert who deals with this frequently. Whether my situation is unique or not, I do know that I have a lot of flexibility and options.
In an attempt to paint a sufficient picture of my situation below, I will apologize in advance for any extraneous information that I provide.
Let’s start with my background…
I am a United States citizen who currently serve as a Principal for an American-based consulting agency. Most of our clients & projects are based in the United States; however, we often get medium-term projects in various countries from time to time.
Because of these projects, I am currently living in Spain while being paid by my American employer.
My employer is currently my only source of income.
How I came to live in Europe for the last several years...
In late 2016, we were hired to manage a large-scale project that spanned the entire European Union - this is when I moved from the United States to Europe to set up and manage this project.
The first few months, I was living out of hotel rooms in the various countries where we planned to have activity and was operating on a tourist visa. Then in early 2017, I settled into London and used that as our project’s main base (still operating on a tourist visa).
In May of 2017, the cold weather of London finally got to me, so I decided to open another office in Spain. Once I settled into Spain, the founder of my company & I travelled to Madrid to meet with attorneys to set up a Spanish entity & begin the process of acquiring a work visa.
In March of 2019, the Spanish government finally issued me a work visa.
How I realized I was in need of a proper consultation…
With this past year being the first on a work visa, I realized I needed to consult an expatriate accountant as well as a Spanish accountant to understand what I needed to do in order to remain compliant with the tax laws.
I got great news from the American accountants who informed me that I was eligible to submit an amended return for 2017 & 2018 since I was out of the United States for nearly the entire year - and that would result in a refund.
Unfortunately, from the Spanish accountant, the news was significantly more somber. He informed me that I would likely have to pay a tax rate of 50%+ given my income level.
This was a massive gut-punch.
I quickly realized, especially considering that I control many flexible variables, that there must be a smarter way to set up a proper structure to lower my tax responsibility while still enjoying my quality of life.
Variables that I think could be helpful...
I am more than certain that my current employer would be willing to pay me as a consultant who operates his own company in another country.
I am also confident that my current employer would be willing to lower my salary to pay for some expenses directly (i.e. rent).
I am willing to move somewhere else; however, I’d prefer to stay in Spain. Although, if it will save me tens of thousands on my tax bill every year - I am very open-minded.
If it makes sense to set up a new company in another country - at the moment, there are two other employees in our European operation. I could also explore the possibility of moving them to this new company payroll if there is a requirement to employ. When a bigger international project comes, it’s not uncommon for us to need to hire up to a dozen or more core staff as well. Again, not sure if this matters, but wanted to put it on your radar.
I have a long-term on & off girlfriend who is a United States citizen & carries a Montenegro passport as well (currently living in New York City). I know Montenegro has some advantages, but not sure what complexities exist after legally marrying someone with a passport from the country. Might be a crazy idea, but wanted to flag it for you.
One final thing to consider…
Recently, in an unrelated conversation, a few friends and I were discussing setting up a holding company where we each have our individual companies invested. With this main holding company, we were considering business ventures or real estate acquisitions to turn them into income properties via AirBnb or similar.
Even though this is something we are planning to do, I figured it might factor into your proposed strategy for my personal situation.
I really cannot thank you enough for your time.
