Nomad Setup

[Casper]

Hi, everyone. I currently live in Portugal, originally from Denmark, but looking for a better place. I chose Portugal because of crypto and NHR. The no minimum stay made it suitable for me, because I want to be free to travel as I see fit, and not have to spend half a year in a country.

But the tax here is too high for anything but crypto. So, I'm looking for a better option. Currently no income, but have savings. I'd rather set something better up now, than wait, til later. So, far I've looked into the following, and would appreciate some feedback.

Bulgaria - Would be my choice for now. Get a cheap apartment, to prove I'm living there. It's cheap, and seems like a good compromise. But the risk of prison if I, or the accountant, makes a small mistake, seems a bit crazy.

Romania - Seems too unreliable. They keep changing the micro company, and I'm going to do primarily consulting, so, doesn't seem like much of an option in my case.

Dubai - Expensive to setup. But I could skip living there. I have no intention to go back to my own country anyway. But seems like it's more relevant further down the road.

Cyprus - The 60 day rule, makes it perfect for me. I could use Xolo to begin with, and just find a cheap 300 euro apartment. However, tax still seems pretty high, when you add the social contribution.

Malta - Tax seem to be a little lower than Cyprus, but they don't have the 60 day rule.

Georgia - Can't figure this one out. Some say tax is low, others say it's not, because Georgia might claim you run everything from Georgia. So, not sure, if it's an option or not?

US - Ironically, it seems like I would end up paying less tax, in the US, than the other options. (Dubai aside.) With their crazy worldwide taxation, I could use it to my advantage. Then I don't need to have an apartment all year. Also it would be so much easier and transparent to run a business there, rather than in a non-English speaking country. Or am I missing something?

 

[JohnnyDoe]

You have left out of the list so many countries!
I suggest one: Grenada. Low cost of life, no hurricanes, perfect weather, no taxes, good infrastructure, lush nature, lots of direct flights to the major cities.

 

[Houdini]

US - Ironically, it seems like I would end up paying less tax, in the US, than the other options. (Dubai aside.) With their crazy worldwide taxation, I could use it to my advantage. Then I don't need to have an apartment all year. Also it would be so much easier and transparent to run a business there, rather than in a non-English speaking country. Or am I missing something?

It's not that easy to relocate to the US as far as I know, you will need a Green card and they will require a lot of paperwork, or am I wrong ?

Dubai is perfect for business setup, if you ever need it done, speak with @Fred he is one of the trusted guys here, for banking you may talk to @Gediminas also a long trusted fellow around here.

Granada, it's worth to look into I believe, but have you made up with your self how you will want to live your life the next 10 years or so?

 

[troubled soul]

Do check Thailand, Mauritius and malayasia ...may be fit into your criteria

 

[karishi]

At the moment the best choice for me for digital nomads is Dubai, especially if for your home country you have already moved to Portugal. In this case you can keep portugal as residency for your home country and get residency in Dubai. If you have read other threads there is some movement around it and some discussion, but If you never go back to denmark at the moment that's the safest choice. The company setup is expensive but with 90 days and a property you can get a tax certificate which might/might not be useful down the road, and as of now, just entering every 6 months doesn't get you reported. The city is much better than pictured, although go there and have a look. Of course you need to pay attention not to trigger residency anywhere else. The idea with Dubai is that you can ive as a digital nomad until you get bored of it, at that point you get 2-3 years of tax certificates in dubai and then you start your life and have kids where you want without raising too many eyebrows.
Moving to the US is not easy at all, you would need a green card. and then you would have fiscal ties to the US, I would stay really away from it. And it's an horrible place where to live in my opinion, Dubai is much better at that point.
Don't go in any place where you risk prison for doing strange things. Think also about how much you trust the system to put the money in, I am sure lots of people will tell you that Dubai is not a safe place where to put the money, but for me it's a lot safer than Bulgaria/Romania/Georgia/Cyprus.
I suppose you are young, so keep in mind that at some point you will get bored of travelling/wan to have kids/fall in love with a girl in a high tax country. Plan in advance.

Do check Thailand, Mauritius and malayasia ...may be fit into your criteria

Yes Thailand has no CFC rules which with the right setup might be good. I have friends living there. And it's also a great place where to live

 

[Konstanz]

Yes my suggestion would be same. Don't inform your home country about any change that you move out of Portugal.
Let it be same as is. And you can emigrate from Portugal to Dubai or some other tax free country.
I don't suggest territorial countries... just tax free

 

[algotrader]

You don't risk anything in Bulgaria. The tax authorities here don't care much. Pretty every Bulgarian small business owner here is cheating by selling products/services black for cash without booking it. I have never heard of anyone here having issues with the tax office but I hear a lot of bad stories from Germany.
In Bulgaria and any other Balkan country, they are happy if you declare at least something and pay something instead of moving to somewhere else. But accounting here can be very bureaucratic and tedious.
The problem is that in order to be considered tax resident here you need to spend at least 183 days per year here or have your centre of vital interest here (property or company). So you might have issues with your home country if you don't get a tax residence certificate in BG.

 

[Konstanz]

You don't risk anything in Bulgaria. The tax authorities here don't care much. Pretty every Bulgarian small business owner here is cheating by selling products/services black for cash without booking it. I have never heard of anyone here having issues with the tax office but I hear a lot of bad stories from Germany.
In Bulgaria and any other Balkan country, they are happy if you declare at least something and pay something instead of moving to somewhere else. But accounting here can be very bureaucratic and tedious.
The problem is that in order to be considered tax resident here you need to spend at least 183 days per year here or have your centre of vital interest here (property or company). So you might have issues with your home country if you don't get a tax residence certificate in BG.

Yes, people rarely need tax residence certificate. But it's very important document when you are audited by your home country. Without it you will have big problems to prove your tax residence in other country
Of course other things such as rent, utility bills , spending time is also important.
The same issue is with Dubai. If you will not spend there at least 90 days, you would not get this certificate and this might lead to serious problems later
About Bulgaria I dont' know but usually European countries don't check if you spent any single day. If you are registered in "population register" or at local tax authority, they just issue you that certificate. But the issue is that if you are investigated, your home country will send request to that other Europe country or UAE with request to provide details if you really lived in that country. And that country like Bulgaria, UAE could check if you really rented apartment etc.
There is no real way to "fake" anything

 

[karishi]

Yes, people rarely need tax residence certificate. But it's very important document when you are audited by your home country. Without it you will have big problems to prove your tax residence in other country
Of course other things such as rent, utility bills , spending time is also important.
The same issue is with Dubai. If you will not spend there at least 90 days, you would not get this certificate and this might lead to serious problems later

So the main issue of NOT having a tax residency certificate is that, if you have none for a year, technically speaking you should be paying taxes in your country of citizenship. This is not an issue if you ahve severed ties with your citizenship country and you never go back there, but it's of course an issue when you re-enter, especially if you move money into the country. So as long as you leave a digital nomad lifestyle there is no problem having no tax residency certificate, but at some point having 3 years of them will come handy. That's why dubai is good, because the tax is zero and it has double taxation agreements. Of course the tax certificate is worth nothing if you trigger residency in another country, I mean if you spend 90 days in dubai and 183 days in Spain, you are a tax resident in spain and it would be a complex situation to determine what should be taxed where.

 

[Konstanz]

So the main issue of NOT having a tax residency certificate is that, if you have none for a year, technically speaking you should be paying taxes in your country of citizenship. This is not an issue if you ahve severed ties with your citizenship country and you never go back there, but it's of course an issue when you re-enter, especially if you move money into the country. So as long as you leave a digital nomad lifestyle there is no problem having no tax residency certificate, but at some point having 3 years of them will come handy. That's why dubai is good, because the tax is zero and it has double taxation agreements. Of course the tax certificate is worth nothing if you trigger residency in another country, I mean if you spend 90 days in dubai and 183 days in Spain, you are a tax resident in spain and it would be a complex situation to determine what should be taxed where.

Double tax treaty is only valid if you have spent 90 days in dubai, have tax residence certificate and have home there

 

[algotrader]

As a rule of thumb, when having a nomadic lifestyle, it is better to have a "base" somewhere in a low tax country and to have a permanent residence with long term rental there or better to own either property and/or a company/business there and to spend more time there than in any other country. And sometimes there can be special cases detailed in the DTT.
What can be very problematic for instance is having clients/employer in the previous high tax home country, moving the main residence to a low tax country and then travelling around without having any substance in the new residence country.

 

[Konstanz]

As a rule of thumb, when having a nomadic lifestyle, it is better to have a "base" somewhere in a low tax country and to have a permanent residence with long term rental there or better to own either property and/or a company/business there and to spend more time there than in any other country. And sometimes there can be special cases detailed in the DTT.
What can be very problematic for instance is having clients/employer in the previous high tax home country, moving the main residence to a low tax country and then travelling around without having any substance in the new residence country.

Nomadic life rarely works these days. You have to have some proper residence (home) / tax base in some country.
Many things can be problematic. Yes, if you have clients from your home country this can trigger investigation. Many things can trigger investigation. If you just travel around the world and your home country can prove that, big risk is they would still consider you tax resident of home country. For that reason you must have some other residence with substance

 

[karishi]

As a rule of thumb, when having a nomadic lifestyle, it is better to have a "base" somewhere in a low tax country and to have a permanent residence with long term rental there or better to own either property and/or a company/business there and to spend more time there than in any other country. And sometimes there can be special cases detailed in the DTT.
What can be very problematic for instance is having clients/employer in the previous high tax home country, moving the main residence to a low tax country and then travelling around without having any substance in the new residence country.

cutting ties with home country means:
- having registered as residing in a foreign country ( but not a high risk country, if you move to dubai you are under investigation automatically or considerent resident in your home ocuntry for 3 years unless otherwise proven ). In this case would be portugal
- having no properties execpt for those inherited
- no wife, no kids, no partecipation in any company
- possibly, no clients
Tax authorities perform investigation but they are constrained by how many investigation they can make and what is the possible return as time is not free. If you leave your country and you were making 150k a year, they will come after you to check, if you were making 30k a year, they will never bother unless there is some trigger. So if you comply with the above and you live a nomadic life, there should be no problems, unless you became famous and your home country knows you are making 1 million a year. Different countries can have different approaches, of course.
As said the issue is more if you will want to settle down at some points, because kids automatically means taxes, unless you live in dubai ( in that case kids means paying for school, which is 20k a year, so plan with care.

 

[Gediminas]

Hi, everyone. I currently live in Portugal, originally from Denmark, but looking for a better place. I chose Portugal because of crypto and NHR. The no minimum stay made it suitable for me, because I want to be free to travel as I see fit, and not have to spend half a year in a country.

But the tax here is too high for anything but crypto. So, I'm looking for a better option. Currently no income, but have savings. I'd rather set something better up now, than wait, til later. So, far I've looked into the following, and would appreciate some feedback.

Bulgaria - Would be my choice for now. Get a cheap apartment, to prove I'm living there. It's cheap, and seems like a good compromise. But the risk of prison if I, or the accountant, makes a small mistake, seems a bit crazy.

Romania - Seems too unreliable. They keep changing the micro company, and I'm going to do primarily consulting, so, doesn't seem like much of an option in my case.

Dubai - Expensive to setup. But I could skip living there. I have no intention to go back to my own country anyway. But seems like it's more relevant further down the road.

Cyprus - The 60 day rule, makes it perfect for me. I could use Xolo to begin with, and just find a cheap 300 euro apartment. However, tax still seems pretty high, when you add the social contribution.

Malta - Tax seem to be a little lower than Cyprus, but they don't have the 60 day rule.

Georgia - Can't figure this one out. Some say tax is low, others say it's not, because Georgia might claim you run everything from Georgia. So, not sure, if it's an option or not?

US - Ironically, it seems like I would end up paying less tax, in the US, than the other options. (Dubai aside.) With their crazy worldwide taxation, I could use it to my advantage. Then I don't need to have an apartment all year. Also it would be so much easier and transparent to run a business there, rather than in a non-English speaking country. Or am I missing something?

Hey,

In my opinion, Cyprus residency plus a UAE company might be a good combination - you set up Cypriot residency and establish a UAE company.

A company in the northern emirates (not Dubai) might save some costs in this case. UAE company will receive funds and will distribute dividends. Dividends will be taxable with 2,65% GESY contributions only (threshold applies). So effective tax rate is very impressive. The only tax risk you should manage is rather theoretical: you should structure legal matters so that the UAE company would not create a permanent establishment for tax purposes in Cyprus.

But I suppose this risk can be easily manageable if you are not living all year in Cyprus.

 

[kkein]

Cyprus and 300€ apartment maybe only for long term rental and in the north.
South Cyprus: forget about it, unless you are ready to go live in the middle of nowhere with no grocery stores around or stg like that.

 

[RealDude]

I hear a lot of bad stories from Germany.

Germany is not that bad, if you know the tax tricks.

If you have customers in the US you would pay 21% flat tax with your LP and KG setup. 79% tax free on your german private bank account thanks to DTA.

 

[Marzio]

If you have customers in the US you would pay 21% flat tax with your LP and KG setup. 79% tax free on your german private bank account thanks to DTA.

Really not bad at all!

How would that work?

 

[RealDude]

Really not bad at all!

How would that work?

Ask a reputable international tax expert. You can legally drive it so far that you only pay 1% tax in total. I do not understand why so many Germans have only Cyprus and Dubai in focus. This must have something to do with the dubious Influencer...

Have fun

 

[Casper]

Wow, thank you everyone, for all the great replies. I appreciate it! There's a lot to digest here.


Didn't think about Grenada, since I considered that mainly a country to get citizenship. In the future, this could certainly be an option. A second citizenship would make a lot of things easier, it seems.


I did consider Thailand and Malaysia, briefly. I really like SE Asia, so it would make sense. I'll take another look. Mauritius, is probably too remote for my liking.


Didn't consider the Green Card for US. Also, they require vaccination, so that's out anyway.


After reading your answers I'm leaning towards Cyprus right now. With their 60 day rule, I'm avoiding potential trouble in the future, and then establish a UAE company at some point.


But I'll look further into some of the other suggestions.


(No, I'm certainly not giving my homecountry any information, and haven't given them much of anything so far. I'll keep it that way.)

You don't risk anything in Bulgaria. The tax authorities here don't care much. Pretty every Bulgarian small business owner here is cheating by selling products/services black for cash without booking it. I have never heard of anyone here having issues with the tax office but I hear a lot of bad stories from Germany.
In Bulgaria and any other Balkan country, they are happy if you declare at least something and pay something instead of moving to somewhere else. But accounting here can be very bureaucratic and tedious.
The problem is that in order to be considered tax resident here you need to spend at least 183 days per year here or have your centre of vital interest here (property or company). So you might have issues with your home country if you don't get a tax residence certificate in BG.

What about this? Is it not enforced, or is it only in extreme cases? 1500 euro really isn't much. That could simply just be a mistake, and not even an attempt to avoid tax. 1-6 years of prison for next to nothing, seems crazy to me.

https://bglaw.eu/articles/bulgarian-caretaker-government-2021-tax-evasion-combat/

 

[Casper]

Hey,

In my opinion, Cyprus residency plus a UAE company might be a good combination - you set up Cypriot residency and establish a UAE company.

A company in the northern emirates (not Dubai) might save some costs in this case. UAE company will receive funds and will distribute dividends. Dividends will be taxable with 2,65% GESY contributions only (threshold applies). So effective tax rate is very impressive. The only tax risk you should manage is rather theoretical: you should structure legal matters so that the UAE company would not create a permanent establishment for tax purposes in Cyprus.

But I suppose this risk can be easily manageable if you are not living all year in Cyprus.

Could you elaborate on the theoretical risk? As long as I don't stay 60 days or 183 days in Cyprus, or where is the limit?