Setup for Territorial Tax Countries?

[hkrlh1]

What would be good setup for someone living in territorial tax countries?

Assuming you're only making money online from abroad in ecommerce or crypto. Ideally with no accounting, taxes, low cost.

 

[CyprusLawyer101]

You could consider a Cyprus non tax resident company where you will appoint yourself as Director , hence demonstrating the management and control in your place of residency which applies the territorial taxation and if you do not conduct any sales in your country of residency then it would result into an overall taxation of 0%.

 

[FREE CITIZEN]

You could consider a Cyprus non tax resident company where you will appoint yourself as Director , hence demonstrating the management and control in your place of residency which applies the territorial taxation and if you do not conduct any sales in your country of residency then it would result into an overall taxation of 0%.

What would the approximate setup costs be for such a structure and what are the ongoing costs and paperwork associated with it?

 

[CyprusLawyer101]

What would the approximate setup costs be for such a structure and what are the ongoing costs and paperwork associated with it?

Well, it depends on final requirements in setting this up, the jurisdictions involved and the specific operation. If you would like to recieve a fee quote we could discuss your specific case. Please let me know and I can pm you.

 

[JohnnyDoe]

You could consider a Cyprus non tax resident company where you will appoint yourself as Director , hence demonstrating the management and control in your place of residency which applies the territorial taxation and if you do not conduct any sales in your country of residency then it would result into an overall taxation of 0%.

You might even manage and control the CY company from a free zone…

 

[FREE CITIZEN]

Well, it depends on final requirements in setting this up, the jurisdictions involved and the specific operation. If you would like to recieve a fee quote we could discuss your specific case. Please let me know and I can pm you.

actually I was more wondering what the yearly accounting, and government fees where like.

 

[CyprusLawyer101]

actually I was more wondering what the yearly accounting, and government fees where like.

Set up Government fees is at approx 600 Eur and there is a levy of 350 Eur paid annually. Accounting depends on the volumes of transactions and sometimes complexity of transactions, so the overall operation would determine that.

You might even manage and control the CY company from a free zone…

Can you elaborate ? Like dubai free zones? And would they allow any tax registration of the company there?

 

[JohnnyDoe]

Can you elaborate ? Like dubai free zones? And would they allow any tax registration of the company there?

I was thinking of FZs in non-tax havens countries, like Georgia or the Dominican Republic. You don’t get a tax registration in a FZ because there are no taxes, but you can prove management and control from there.

 

[CyprusLawyer101]

I was thinking of FZs in non-tax havens countries, like Georgia or the Dominican Republic. You don’t get a tax registration in a FZ because there are no taxes, but you can prove management and control from there.

Hmm.. it might not work now though not 100% sure. Since the changes introduced in the tax residency test in Cyprus, you need to demonstrate tax residency elsewhere and this for now appears to be achievable if you register at thr tax authorities of the country of management and control

 

[JohnnyDoe]

Hmm.. it might not work now though not 100% sure. Since the changes introduced in the tax residency test in Cyprus, you need to demonstrate tax residency elsewhere and this for now appears to be achievable if you register at thr tax authorities of the country of management and control

You are referring to the new rules that come into force on Jan 1 2023.
Would a US EIN be sufficient for Cyprus?

 

[hkrlh1]

Set up Government fees is at approx 600 Eur and there is a levy of 350 Eur paid annually. Accounting depends on the volumes of transactions and sometimes complexity of transactions, so the overall operation would determine that.

Well that would defeat the purpose of having no accounting. A New Mexico LLC seems more private and cost effective.

Even if accounting was an option, wouldn't a UK non-resident LLP be a cheaper and more straightforward solution than Cyprus?

 

[ElBotellon]

guys, I don't know how you manage to use non-resident companies for B2B transactions. Tipically when there are services, consultancy etc to avoid witholding taxes countries ask tax residence and beneficial ownership of the payee (to avoid conduit companies).

So in general i would not feel comfortable to have a company without a tax certificate of residency.

Even if you invoice with a SMLLC, which is NOT tax resident in US, from US side the taxation will depend on the residency of the sole owner.
In that case the safest bet is to use a company tax resident in a country without LOB with US. So under all points of view I believe a tax residence certificate is absolutely needed to feel safe and scale safely (i.e. to be able to defend your position in case of audit by tax authorities - it is clear that in absence of audit you can do any s**t you want, but it is not relevat).

Hmm.. it might not work now though not 100% sure. Since the changes introduced in the tax residency test in Cyprus, you need to demonstrate tax residency elsewhere and this for now appears to be achievable if you register at thr tax authorities of the country of management and control

absolutely right.

I see you are a CY lawyer (a jurisdiction i love, not only for taxation but also for the russian girls in Aya Napa - now disappearead for obvious reasons), so i will seize the opportunity to ask:
which is the basic basic cost to incorporate a CY company? somebody in the forum claimed 500 eur, it is realistic?
i am considering the idea to use it as trustee for a CY international trust. Also wondering if there is a way to draft a trust without too much lawyers fees (i have also a legal background, despite not a CY lawyer)

 

[CyprusLawyer101]

guys, I don't know how you manage to use non-resident companies for B2B transactions. Tipically when there are services, consultancy etc to avoid witholding taxes countries ask tax residence and beneficial ownership of the payee (to avoid conduit companies).

So in general i would not feel comfortable to have a company without a tax certificate of residency.

Even if you invoice with a SMLLC, which is NOT tax resident in US, from US side the taxation will depend on the residency of the sole owner.
In that case the safest bet is to use a company tax resident in a country without LOB with US. So under all points of view I believe a tax residence certificate is absolutely needed to feel safe and scale safely (i.e. to be able to defend your position in case of audit by tax authorities - it is clear that in absence of audit you can do any **** you want, but it is not relevat).


absolutely right.

I see you are a CY lawyer (a jurisdiction i love, not only for taxation but also for the russian girls in Aya Napa - now disappearead for obvious reasons), so i will seize the opportunity to ask:
which is the basic basic cost to incorporate a CY company? somebody in the forum claimed 500 eur, it is realistic?
i am considering the idea to use it as trustee for a CY international trust. Also wondering if there is a way to draft a trust without too much lawyers fees (i have also a legal background, despite not a CY lawyer)

Well its true that russian girls are becoming lesser but they are well replaced by the Ukrainians , so it can still remain a favourite place
500Eur is realistic if you are referring solely about fees. Fyi disbursements alone come to 600Eur.
Yes a trustee company would basically prepare dormant accounts as a company, however certain records of the trust property should be maintained.
Maybe we could discuss further. - kindly let me know and I can PM you.

 

[ElBotellon]

Well its true that russian girls are becoming lesser but they are well replaced by the Ukrainians , so it can still remain a favourite place
500Eur is realistic if you are referring solely about fees. Fyi disbursements alone come to 600Eur.
Yes a trustee company would basically prepare dormant accounts as a company, however certain records of the trust property should be maintained.
Maybe we could discuss further. - kindly let me know and I can PM you.

yes thanks, please feel free to PM.
In terms of compliance for small holdings there is an interesting news regarding absence of audit, with a "review" .

For definition of review I found this but no idea about cost impact.

To provide external parties with a basic level of assurance on the accuracy of financial statements. In other words, while an audit extensively examines whether or not the financial statements are free of material misstatements, reviews deduce whether or not the financial statements are plausible or credible

https://www.kyprianou.com/en/news/amendment-to-the-cyprus-companies-law/ppp-101/435/

 

[GPT]

Effective costs for a Cyprus company start at 1100 ish euros. Average I would say all is good to go with 13-1400 euros. There are always overlooked sundry expenses.

 

[CyprusLawyer101]

yes thanks, please feel free to PM.
In terms of compliance for small holdings there is an interesting news regarding absence of audit, with a "review" .

For definition of review I found this but no idea about cost impact.

To provide external parties with a basic level of assurance on the accuracy of financial statements. In other words, while an audit extensively examines whether or not the financial statements are free of material misstatements, reviews deduce whether or not the financial statements are plausible or credible

https://www.kyprianou.com/en/news/amendment-to-the-cyprus-companies-law/ppp-101/435/

The feedback we get is that it will be a lighter audit process. Obviously less fees would apply. Where the fees will end up would depend on the overall approach by the auditors , however it should give opportunities for applying lower more competitive fees.

You are referring to the new rules that come into force on Jan 1 2023.
Would a US EIN be sufficient for Cyprus?

It is likely it will, but havent seen it in practice yet. Should have a clearer picture quite soon though and I can update.

 

[fortunespeculator]

The feedback we get is that it will be a lighter audit process. Obviously less fees would apply. Where the fees will end up would depend on the overall approach by the auditors , however it should give opportunities for applying lower more competitive fees.


It is likely it will, but havent seen it in practice yet. Should have a clearer picture quite soon though and I can update.

Its good then if fees get lower.

 

[CyprusLawyer101]

Its good then if fees get lower.

Yes , we understand that too. What appears to be more important though, is that the actual audit requirements would be reduced and hopefully with it a lot of unnecessary hassle.

 

[fortunespeculator]

Yes , we understand that too. What appears to be more important though, is that the actual audit requirements would be reduced and hopefully with it a lot of unnecessary hassle.

What is the threshold below which such exemption would be possible??

 

[CyprusLawyer101]

What is the threshold below which such exemption would be possible??

I have to check it, but from what I ve heard its high enough to cover a good number of businesses.