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Martin Everson

Offshore Retiree
Staff member
Mentor Group Gold
Elite Member

Martin Everson

Offshore Retiree
Staff member
Mentor Group Gold
Elite Member
Those are only directors fees (7k for trading company and 3.5k for holding) @Martin Everson
:oops:

I guess you will have turnover to make those costs seem inconsequential.
 

fartinav

New member
@Martin Everson sorry for my ignorance, but what else could the director be apart from a nominee?
I need a local director for the substance, so my companies are tax resident in Malta
 

Martin Everson

Offshore Retiree
Staff member
Mentor Group Gold
Elite Member
@Martin Everson sorry for my ignorance, but what else could the director be apart from a nominee?
I need a local director for the substance, so my companies are tax resident in Malta

1. Are you signing a declaration of trust with this director?
2. Has the director agreed they will open accounts for the companies?
3. Has the director specified what their duties will be for the companies?

If you are not signing a document in point 1 above then you may satisfy effective management and control being in Malta. In terms of a substance test for the Malta companies you would need to meet at least the following:

1. At least 50% of directors resident in Malta
2. An office must be present in Malta
3. Business decisions and board meetings take place in Malta
4. Operations must be in Malta so helps to have local invoices to prove local costs incurred.

I think you will be ok then with above points however. It's not Malta taxman you need to worry about but your home taxman if they are aggressive in nature.
 

ilpablo

Active Member
This. If you have the money (imo you should not think about this under 6 figures anyways) hands down Malta, under 100k Cyprus.
Structures are as simple as it gets btw.
May I ask you why do you think Cyprus is better?

They asked me 4k to setup the company, plus you have to rent a place the whole year spending other 5/6k.

Plus 2/3k annual costs of accountancy, plus taxes around 15% with social contribution and national health system.

Am I missing something about Cyprus?
 

ilpablo

Active Member
Hi guys, it seems a lot of people are interested in the Maltese scheme.

But I'm wondering did you ever considered Romania or Bulgaria instead?

I was also looking into Malta, but even tho I like to spend some time in the Island, things seems quite expensive and complicated.

So I found that Romania could be a good alternative. Any thoughts?

Also speaking about the 183 days rules and place of effective management, if you will be questioned by your home country.

I've been told that is always better to get your residency and manage the company in the same place, because it will tie yourself in that country for the porpouse of your personal residency as well.

So if go to Malta, open the Maltese company.

If you go to Romania, open the Romanian company.

Etc...

Once things are setup and running, you can always rent a space and hire a local director and move somewhere else, but the costs will grow, and also here it depends about where you setup the company. An employee + an office in Romania or Bulgaria will cost you around 1k per month, while in Malta will cost twice.

Another thing is that once you have a permanent address with a regular contract it's really hard that one of these countries will check on you wether you were present for 183 days or not. Ofc it's better to spend some time, but whilst you don't brake any laws and pay your taxes, they have not any interest to do so.

Being safe from any problems from your home country is another story. In this case I guess it's sufficient to prove you have:
- a permanent address in that country
- economic ties (a company) in that country
- you didn't spent more than 183 days in your country (also very difficult for them to prove, unless you worth very big money, they won't invest time and effort in these investigations)
- you don't have any big ties with your home country (you don't own a car, bike, home, boat, etc, no gym subscriptions, etc)

In this case you can setup yourself and your company in one of these country, and still be able to travel and spend time in other places (example: 5 months in Barcelona (if you are not Spanish) and 4 months in Thailand or Paris (if you are not French).

Please someone tell me if I'm wrong about this.
 

fartinav

New member
@ilpablo it seems like Bulgario or Romania are not stable jurisdictions. It could work, but as per the tax lawyers I've talked to, they do not recommend this options. Malta is the safest jurisdiction I've heard of.
 

CyprusLaw

Mentor Group Gold
May I ask you why do you think Cyprus is better?

They asked me 4k to setup the company, plus you have to rent a place the whole year spending other 5/6k.

Plus 2/3k annual costs of accountancy, plus taxes around 15% with social contribution and national health system.

Am I missing something about Cyprus?
The company incorporation fees seem high. Do this include nominee services? Generally, the fees you would expect would be 1500-2000 for company incorporation and around 2500 per annum for nominee services.

Accounting and audit depend on volume of transactions but you can find around 1000-2000 per annum.

It is not necessary to rent a flat.

Tax is 12.5% on profit of the company plus 2.65% for GHS on dividend payments.
 

ilpablo

Active Member
The company incorporation fees seem high. Do this include nominee services? Generally, the fees you would expect would be 1500-2000 for company incorporation and around 2500 per annum for nominee services.

Accounting and audit depend on volume of transactions but you can find around 1000-2000 per annum.

It is not necessary to rent a flat.

Tax is 12.5% on profit of the company plus 2.65% for GHS on dividend payments.
They quoted me with these fees, yes maybe i can find something better.

But everyone said I must rent a place for the whole year. Why isn't true in your opinion? there is some workaround?
 

CyprusLaw

Mentor Group Gold
They quoted me with these fees, yes maybe i can find something better.

But everyone said I must rent a place for the whole year. Why isn't true in your opinion? there is some workaround?
1) The renting of a place is required to become a tax resident in Cyprus. In order to do this you need to live in Cyprus for 60 days and not more than 183 days in any other jurisdiction. So even if you rent a flat for the whole year but you are living abroad for over 183 days then the structure for you being considered a Cyprus tax resident would fail.

2) Your options are the following: (a) actually relocating full time to Cyprus and therefore renting a place; (b) living in Cyprus for 60 days and not more than 183 days in another jurisdiction, you could go for short term rental in this case; (c) a rental agreement could be arranged by your provider/lawyer without actually renting a flat for the whole year.

In any event as mentioned above paying rent in Cyprus but living abroad for over 183 days would not help the structure and you would just incur unecessary costs

Cyprus authorities have never actually challenged this.
 

ilpablo

Active Member
1) The renting of a place is required to become a tax resident in Cyprus. In order to do this you need to live in Cyprus for 60 days and not more than 183 days in any other jurisdiction. So even if you rent a flat for the whole year but you are living abroad for over 183 days then the structure for you being considered a Cyprus tax resident would fail.

2) Your options are the following: (a) actually relocating full time to Cyprus and therefore renting a place; (b) living in Cyprus for 60 days and not more than 183 days in another jurisdiction, you could go for short term rental in this case; (c) a rental agreement could be arranged by your provider/lawyer without actually renting a flat for the whole year.

In any event as mentioned above paying rent in Cyprus but living abroad for over 183 days would not help the structure and you would just incur unecessary costs

Cyprus authorities have never actually challenged this.

Thanks! Maybe I can investigate about this a bit better.

Since everyone told me I must have a long term rental contract I was looking in the market.

How much it cost the rental service you mentioned?

Also anyway I must own a company and manage the company from there so i'm gonna pay 12.5 + 2.65.

It's not possible to just get the residency permit and use an LLP uk or Romanian microcompany?

thanks
 

kkein

Entrepreneur
1) The renting of a place is required to become a tax resident in Cyprus. In order to do this you need to live in Cyprus for 60 days and not more than 183 days in any other jurisdiction. So even if you rent a flat for the whole year but you are living abroad for over 183 days then the structure for you being considered a Cyprus tax resident would fail.

2) Your options are the following: (a) actually relocating full time to Cyprus and therefore renting a place; (b) living in Cyprus for 60 days and not more than 183 days in another jurisdiction, you could go for short term rental in this case; (c) a rental agreement could be arranged by your provider/lawyer without actually renting a flat for the whole year.

In any event as mentioned above paying rent in Cyprus but living abroad for over 183 days would not help the structure and you would just incur unecessary costs

Cyprus authorities have never actually challenged this.
Isn't it hard in CY to open a bank account without proof of residency (rent/utility bill) and a work contract?
 

rockrock

New member
The following might work for people who don't need a business bank account and make most of their money with crypto.
So the idea is you get a Malta tax residency, economic self sufficiency residency but then also suppose CFC applies.

What about using an offshore foundation with zero tax that doesn't have an UBO? You don't own the foundation. You're not the UBO or beneficiary of the foundation. But you control the foundation. The UBO / purpose of the foundation being some abstract goal. Sure, no bank will open an account for that foundation.

Founder of foundation? Use a nominee founder? I think the founder of the foundation doesn't matter much. That's just the person who does the initial setup. Does not need to be involved later one.

Would any crypto currency exchanges open an account for that foundation?

If not, well use decentralized exchanges or stay below KYC threshold as long as that lasts.

Why bother with getting a tax residency in Malta? Because Malta will give you residence documentation card, a tax identification number (TIN) and tax assessment letter. TIN is requested by more and more banks. Revolut blocked my account before and requested to see source of funds by showing a tax assessment letter for a meager 10 K EUR first year total turnover.

Due to AML, I am sure when trying to move more than 10 K EUR at a time banks and fintech are going to bother me "what's your tax residency, TIN, tax assessment letter".

How to get the money out of the foundation? Well, you control the foundation and the crypto wallet. Use a private account at some EMI such as mistertango or better if there are any alternatives. Send the bitcoin there to sell to fiat.

Now what if the EMI asks for AML? You could tell them, that money is from the foundation as a reward because I did xyz for the foundation. You can even create a document for yourself. Does it end there all good?

Or would the EMI try to snoop into the affairs of the foundation? Would the EMI ask "what's your contact in the foundation?" Would the EMI ask "who's on the board of the foundation?"

A) Suppose you're a board member of the foundation. You show the EMI some paper that you are and a certificate of good standing of the foundation. I guess what could happen next the the EMI wants to snoop more and wants to know where the foundation got the BTC from? Well, trading. How far does the AML go?

B) Suppose it really wouldn't be your foundation, how could you possibly answer? EMI could claim "due to AML you were obligated to KYC your customer and the foundation"? Maybe have a passport copy of a board member and certificate of good standing from the foundation ready. The EMI could not reasonably demand information of the foundation made the BTC.

Either way, the EMI might find this sketchy and close the account?

Or the EMI might refuse to do business with foundations that are not in some transparency register? And even with transparency register, the EMI might refuse business if the foundation doesn't have a human UBO?

This is based on my previous question juristic person without owner / beneficiaries - foundation? avoid liability, taxes, protect assets?
 

CyprusLaw

Mentor Group Gold
Isn't it hard in CY to open a bank account without proof of residency (rent/utility bill) and a work contract?
As mentioned above, if your plan is not to actually relocate to Cyprus it will be difficult, as you would still need to have a rental agreement in place, and acquire the relevant residence permits (if applicable)
 

uplana

Corporate Services
Mentor Group Gold
Regardless where you setup you company to reduce your taxes the new (which obvious isn't new to most) rule is that you want to rent a full office, including staff and what else it requires to run a company. So you will have a rental / lease agreement and can proof your company to be located in that particular country and be tax resident there.
 
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