Remote worker travelling the world - setup

[12345]

Hi I am advising my friend who is a programmist working remotely travelling the world with a camper car.
It was brought up many times probably but I'd like to confirm, what would be the best solution for him?
No tax residency at all is not adviced as I understand?
Currently he works B2B running a company in high tax EU country where he was born and is now working on changing his tax residency

What would be the best solution for him?
USA LLC + tax residency in territorial tax system such as Thailand and no taxes to be paid then? Does he need to visit Thailand often then and/or rent a place there?
Or which jurisdiction should he choose ?

Thanks a lot! I really love this forum

 

[Ancova]

Greetings!

He needs to de-register from his home country.

A US LLC would work but he has to be a resident of a low tax country (must not live there).

I would suggest a Dubai company with residency and tax residency. If he makes more than 100k USD in profits per year, this can be then combined with a U.S. LLC so the 9% corporate tax in Dubai doesn’t apply for him.

 

[sergeylim88]

could you please elaborate how US llc won't be taxed in Dubai if it is controlled by Dubai resident?

 

[scooterguy]

tax residency in territorial tax system such as Thailand and no taxes to be paid then? Does he need to visit Thailand often then and/or rent a place there?

I'm curious, how do you think tax residency works? How do you become a tax resident of Thailand without spending time there?

 

[Ancova]

could you please elaborate how US llc won't be taxed in Dubai if it is controlled by Dubai resident?

In UAE you open a company and get residency through that company. You choose one of the tax exempted activities. Just in case you also get a tax residency certificate in Dubai. Usually you would need to stay 90 days a year in Dubai to get this certificate, but we have a service for 4,000 AED to issue this certificate without staying the 90 days.
Then you open a US LLC and use banking through the states and pay yourself dividends to your Dubai personal account.

 

[scooterguy]

In UAE you open a company and get residency through that company. You choose one of the tax exempted activities. Just in case you also get a tax residency certificate in Dubai. Usually you would need to stay 90 days a year in Dubai to get this certificate, but we have a service for 4,000 AED to issue this certificate without staying the 90 days.
Then you open a US LLC and use banking through the states and pay yourself dividends to your Dubai personal account.

LOL this is good stuff to start the day.

 

[12345]

I'm curious, how do you think tax residency works?

I thought that countries are in general happy to give tax residencies to foreigners since it's free money for them, especially developing countries. Citizenship is a different thing I understand
Many people in this forum seem to live nomad lifestyle, where are they tax resident ?

I would suggest a Dubai company

Why Dubai company? USA LLC is cheaper to run and banks, providers and customers would be more happy to work with it

He needs to de-register from his home country.

Yes he has already done that

 

[Ancova]

I thought that countries are in general happy to give tax residencies to foreigners since it's free money for them, especially developing countries. Citizenship is a different thing I understand
Many people in this forum seem to live nomad lifestyle, where are they tax resident ?

Why Dubai company? USA LLC is cheaper to run and banks, providers and customers would be more happy to work with it

Yes he has already done that

In order to get a tax residency, a person must live a certain amount of days in a particular country. In Dubai it is the case of 90 days. We can issue the certificate even if the person does not live in Dubai 90 days.

A US LLC is definitely cheaper (I have 2 on my own) but to be tax exempt in the US, the person must be resident of a 0%tax country.

This is why I suggest a Dubai company in combination with a US LLC and a tax residency certificate from Dubai.

 

[12345]

In order to get a tax residency, a person must live a certain amount of days in a particular country. In Dubai it is the case of 90 days. We can issue the certificate even if the person does not live in Dubai 90 days.

A US LLC is definitely cheaper (I have 2 on my own) but to be tax exempt in the US, the person must be resident of a 0%tax country.

This is why I suggest a Dubai company in combination with a US LLC and a tax residency certificate from Dubai.

But with tax residency in UAE it will be 9% corporate tax right

 

[scooterguy]

I thought that countries are in general happy to give tax residencies to foreigners since it's free money for them, especially developing countries. Citizenship is a different thing I understand
Many people in this forum seem to live nomad lifestyle, where are they tax resident ?

That's not how it works. In order to be a tax resident of Thailand, for example, you need to spend 180+ days there in a natural year. Most countries work in similar ways, some requiring less time than others.

Paying tax in a specific country for whatever reason, such as having a business or investments there, is a different thing, but that will not grant you personal tax residency, unless you spend time there.

Also, beware of people who claim to issue tax certificates. Tax residence certificates are issued by government institutions and have a QR code to be verified online in an official .gov website.

 

[Ancova]

But with tax residency in UAE it will be 9% corporate tax right

No because there is no personal income tax in the UAE, plus there is no taxation on dividends.

That's not how it works. In order to be a tax resident of Thailand, for example, you need to spend 180+ days there in a natural year. Most countries work in similar ways, some requiring less time than others.

Paying tax in a specific country for whatever reason, such as having a business or investments there, is a different thing, but that will not grant you personal tax residency, unless you spend time there.

Also, beware of people who claim to issue tax certificates. Tax residence certificates are issued by government institutions and have a QR code to be verified online in an official .gov website.

Just to add to your last point, that is true in most cases, however in UAE and with us it is a bit more flexible

We are actually in the same building as the FTA in DIFC

 

[troubled soul]

No because there is no personal income tax in the UAE, plus there is no taxation on dividends.

Will USA LLC create PE in UAE ? Do USA LLC not taxable in UAE ?

 

[12345]

That's not how it works. In order to be a tax resident of Thailand, for example, you need to spend 180+ days there in a natural year. Most countries work in similar ways, some requiring less time than others.

Wow okay I were not aware that it works this way. So what if someone likes to constantly travel and doesn't spend 90-180 days in any of the countries, what should he do?

Also, beware of people who claim to issue tax certificates. Tax residence certificates are issued by government institutions and have a QR code to be verified online in an official .gov website.

Okay thanks

 

[Ancova]

Will USA LLC create PE in UAE ? Do USA LLC not taxable in UAE ?

Since there is no personal income tax in the UAE, or to be exact, the personal income tax in the UAE is 0%, a person will not be taxable with the setup Dubai Residency, US LLC

 

[12345]

Since there is no personal income tax in the UAE, or to be exact, the personal income tax in the UAE is 0%, a person will not be taxable with the setup Dubai Residency, US LLC

In the case of my friend he is required to do B2B. So he would need to pay 9% corporate tax

 

[scooterguy]

Just to add to your last point, that is true in most cases, however in UAE and with us it is a bit more flexible

We are actually in the same building as the FTA in DIFC

Doesn't matter where you are (or claim to be, I'm sure that for your own safety you are very far from UAE), these certificates are issued by the FTA itself, and there's online verification for them.

Wow okay I were not aware that it works this way. So what if someone likes to constantly travel and doesn't spend 90-180 days in any of the countries, what should he do?

It depends on your home country/current country of tax residence. Some countries will let you off the hook more easily as soon as you stop spending time there and cut your ties with them, others are more strict and will require proof of tax residency somewhere else.

If you're able to disclose the name of this high-tax EU country, more specific advice can be given.

If that's not possible, as a general rule, I'd advise to become an actual resident somewhere for the first couple of years, and spend 6+ months a year there. So, for example, become a tax resident of a cheap country in SEA (most don't tax foreign income), or a cheap EU country with low taxes (Romania and Bulgaria come to mind).

That way, you'll leave your current high-tax country without raising major red flags, and if challenged, you'll be able to show that you were a legit resident somewhere else.

 

[cryptofriendly]

That's not how it works. In order to be a tax resident of Thailand, for example, you need to spend 180+ days there in a natural year. Most countries work in similar ways, some requiring less time than others.

Paying tax in a specific country for whatever reason, such as having a business or investments there, is a different thing, but that will not grant you personal tax residency, unless you spend time there.

Also, beware of people who claim to issue tax certificates. Tax residence certificates are issued by government institutions and have a QR code to be verified online in an official .gov website.

You can get a residency certificate at the immigration office in Jomtien, Pattaya (Thailand) for 100 bath on the same day, even on a visa-free entry stamp.
You can use this with EMIs, even while digital nomading and not staying more than 30 days in Thailand, and not being a real tax resident.

You can get a tax certificate/number in Georgia by simply importing something from abroad and telling the authorities that you need that tax number for the customs tax. Again, without the need of staying there more than 30 days, and without becoming a real tax resident.

Lots of options to avoid being taxed in ANY country and being able to handle banks and broker accounts and their requirements while doing so, and having a certificate to show to the greedy 'home country' tax officials if they try to come to take your money.

 

[JustAnotherNomad]

It all depends on where your "friend" is from.
I don't see how the UAE would make sense if one is really a full time nomad who never stays anywhere for a long time and who has cut ties with one's home country.

 

[Sols]

Then you open a US LLC and use banking through the states and pay yourself dividends to your Dubai personal account.

Is there confirmed guidance from the UAE tax authority that income from an LLC is considered dividends? Have there been rulings or guidance notes issued on how LLCs are treated?

 

[scooterguy]

You can get a residency certificate at the immigration office in Jomtien, Pattaya (Thailand) for 100 bath on the same day, even on a visa-free entry stamp.
You can use this with EMIs, even while digital nomading and not staying more than 30 days in Thailand, and not being a real tax resident.

You can get a tax certificate/number in Georgia by simply importing something from abroad and telling the authorities that you need that tax number for the customs tax. Again, without the need of staying there more than 30 days, and without becoming a real tax resident.

Lots of options to avoid being taxed in ANY country and being able to handle banks and broker accounts and their requirements while doing so, and having a certificate to show to the greedy 'home country' tax officials if they try to come to take your money.

Please keep in mind that getting certificates or tax IDs is not the same as being tax resident of a country.

For instance, you cannot get the Thai tax residence certificate without being 180 days in Thailand AND having paid tax: Certificate of Residence (Individual Taxpayer).

Also, be careful with assuming that having a tax number in Georgia (or in any country) makes you a tax resident there. I have tax numbers in a variety of countries, but that doesn't necessarily make me a tax resident in any of them, even if I pay some taxes in those countries, because I don't spend enough time there.

But again, whether your home country will go after you depends on what your home country is. Countries like Spain or Italy won't let you go that easily and will consider you guilty of tax evasion until you prove your innocence, and good luck proving your innocence with the residency certificate from Pattaya after having spent only a week partying there.

Other EU countries don't care or have the resources to go after people who leave, so once you leave you're gone. I'm just assuming OP is from a country like Italy/Spain/Germany, in order to err on the side of caution.