Offshore Company for a travelling trader

[Jonnny]

Hi All,


Could someone assist with some advice on opening an offshore company, and if it would meet all my requirements.


In a nutshell I am a currency trader, I only trade my own funds. Basically I live all over the place. Currently I am in Australia for a few more weeks. Then will be living between Spain, Austria and a few other European countries. Which will result in me becoming a tax resident in one of these countries.


What I would like to do is setup a tax efficient company or trust, in for example Cyprus. With my banking in another jurisdiction. I will setup a trading account with my broker through the company, and pay myself through the company (dividends or whatever is recommended).


With a company/Trust in Cyprus and for example, living in Spain. With low or no tax on income gained outside of the territory. And the double tax treaty. So If I trade from Spain the company tax would be 0% if trust, or 10% if company..


What about the salary I pay myself? Would the tax be determined by the country I reside in. So if Spain, and payed myself dividends it would be the local rate. Or if Slovakia, there is no tax on dividends from foreign sourced income.


Alternatively I could live mostly off a company credit card, and allow the company to pay my rent. So there would be little need to withdraw a salary.


I do apologize if these questions seem a bit basic, but I have done my research and have not found any clear answers.


Thanks


Again


Jonny

 

[JohnLocke]

Welcome aboard Jonnny, I hope you enjoy your stay:welcome:

What about the salary I pay myself? Would the tax be determined by the country I reside in. So if Spain, and payed myself dividends it would be the local rate. Or if Slovakia, there is no tax on dividends from foreign sourced income.

Correct, you will be taxed locally.

Alternatively I could live mostly off a company credit card, and allow the company to pay my rent. So there would be little need to withdraw a salary.

Most European country would tax this as well.

 

[Jonnny]

Welcome aboard Jonnny, I hope you enjoy your stay:welcome:
Correct, you will be taxed locally.


Most European country would tax this as well.

Hi Admin,


Thanks for the assistance so far. Could you possibly clarify a few more things.


It would seem there would seem the real advantage of the offshore company would be my ability to pay myself a lower income, thus paying less tax on the personal income. That's if I live in Spain.


Deloitte have stated the following on Slovakia ( I spend quite a bit of time there, so being a tax resident would be easy for me.)


- Investment income in the form of dividends is not subject to Slovak tax


-Taxation of dividends


– Dividends paid/received generally are not subject to tax in Slovakia


- Dividends Slovakia does not levy withholding tax on dividends


With the above information, is it possible to setup an offshore company that would allow me to take advantage of the possible tax benefits related to dividends..


Thanks Again


Jonny


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[JohnLocke]

I wasn't aware of this and as well I don't know the tax reform in Slovakia, however, if that is what Deloitte said, then is may be true. I would recommend you then, to look into a Cyprus company where you only pat 12,5% corporate tax on profits. You can at any time take out money as dividend, loan or royalties which are also not taxed in Cyprus.

 

[Jonnny]

I wasn't aware of this and as well I don't know the tax reform in Slovakia, however, if that is what Deloitte said, then is may be true. I would recommend you then, to look into a Cyprus company where you only pat 12,5% corporate tax on profits. You can at any time take out money as dividend, loan or royalties which are also not taxed in Cyprus.

Yes that seems to be the case, but I will get it all verified by a local tax specialist. Although there does seem to be a local health care tax on the dividends of 14%. Which basically results in me paying alot more tax than I was hoping for.


Maybe becoming a PT is my best option.

 

[JohnLocke]

Although there does seem to be a local health care tax on the dividends of 14%.

You mean in Slovakia right?

 

[Jonnny]

You mean in Slovakia right?

Yes, there is a 14% Health insurance contributions on dividends , although KPMG have some conflicting information on that.