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(Tax) residency wanted. Down to the real problem of being a digital nomad

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dissident

New member
Georgia is also another interesting option for a nomad, you can distribute profits to an FTZ IT company in Georgia from the Estonia company and pay 5% taxes. That's all. The tax residency can be easily obtained and there is an option to do not reside there 183 days per year while still being tax considered resident if you apply as HNWI, or alternatively rent a 150€/month cheap studio and declare you live there. Georgian authorities do not perform a strict tax control of foreigns entering or leaving the country. Plus banking in Georgia is quite easy and fast. Baking privacy with no CRS reporting for now. Bureaucracy is low. Prices are low. Public institutions are mostly efficient.
 

khinkali

Entrepreneur
you can distribute profits to an FTZ IT company in Georgia from the Estonia company and pay 5% taxes
That is VZ (Virtual Zone), it requires you to be exploiting IT intellectual property developed in Georgia, so you need some substance. FZE is freezone which is 0% tax but seemingly no chance of Georgian banking.

As OP just needs to "provide proof of residency for way too many services" a Georgian bank account, tax id and Internet bill might be enough even without residency permit or tax residency. If worried about getting taxed somewhere else and wanting a tax residency certificate, then a rental property and HNW tax residence status could make sense.
 

John M

New member
Romania is good for micro companies purpose paying 1% taxes till 1 million euros of revenues, of course dividends could avoid having residency in Estonia, but for trading in shares as I wrote in my previously post do not exists a law in Europe which give you totally exemptions and in fact also with the Romania system all investments in banks or made with the company are subject to Capital Gain Taxes at 16%
Tax on dividends in Romania is only 5%, therefore it would be a great solution to receive the dividents from his Estonian company.
I know a lor of italians that have residency in Romania for the same purpose
 

CyprusLaw

Mentor Group Gold
Cyprus is a good option - Tax residency with 60 day rule.
Corp tax is 12.5%, dividends (as a non dom) will be SDC exempt, you will only pay 2.65% on dividend for the GHS.
Company formation is simple and fast.
Quality legal and accounting services, nominee services etc.
 

Sols

Staff member
Mentor Group Gold
Cyprus is a good option - Tax residency with 60 day rule.
Corp tax is 12.5%, dividends (as a non dom) will be SDC exempt, you will only pay 2.65% on dividend for the GHS.
And if business is going well, it's worth noting that this 2.65% is capped at 4,770 EUR/year (180,000 EUR income).
 

CyprusLaw

Mentor Group Gold
Yes, but for Non Dom, and the Italian Tax Authority will not consider this as a full tax residence in Cyprus.
You will need to get professional advice for the structuring. Generally I note that you become a Cyprus Tax resident if you stay in Cyprus for 60 days per year, and are not living for more than 183 days in any other jurisdiction.

Any dividend paid by a Cyprus company to a foreign non dom individual is SDC exempt as stated above. Even if you relocate full time in Cyprus, you will have the non dom status for 17 years.
 

Bagpacker

New member
The tax residency can be easily obtained and there is an option to do not reside there 183 days per year while still being tax considered resident if you apply as HNWI
This option indeed still exists but is about to be phased out.
The prgram is already running for many years. Nevertheless, until 2019 only a handful of people ever got this status and not much more did apply for it. Even though I do not have any more recent numbers regarding "status granted" I doubt that it will be much more today.
There is a simple reason why this option never got much interest: The status is not in line with any DTT and will not shield you from a tax claim of any other nation.
Georgian authorities do not perform a strict tax control of foreigns entering or leaving the country.
Well, it depends. Data is exchanged between border control and the taxman. It is the basis on which every resident can claim his/her certificate of tax residency. Understand: Georgia loves to Track & Trace.
Georgia has no banking privacy.
Accounts of citizens are linked to their "Personal Number". This is a unique code which is printed on their national ID and serves as tax identification number, too. The number is needed for almost every transaction with authorities. A citizen will even have to provide this number in order to buy a long-distance train ticket or to receive a registered letter at the post office.
Accounts of foreigners are either linked to their passport number or (in case of long-term residence permit) you can have it linked to your "Personal Number for Alien". The functionality of passport number or "Personal Number for Alien" is legally equivalent to that of a citizen, with the notable exception of "tax identification number".
Every inbound/outbound wire transfer of more than about 500 Dollar will go into the data base of NBG. A citizen and an official long-term resident who has his account linked to his "Personal Number"/ "Personal Number for Alien" has to provide the reason for a transfer in excess of about 500 Dollar (bill or other feasible document).
Only if you are considered to be a non-resident you can transfer in and out relatively unhindered (for now).
 

Bagpacker

New member
you will only pay 2.65% on dividend for the GHS
I am currently looking into Cyprus.
As far as I was able to find out, it is impossible to receive any GHS-benefits within the first 5 years of residency in Cyprus. Only after becoming a "permanent resident" GHS grants benefits. Nevertheless, the 2.65% GHS contribution are even due while still being a "temporary resident" (for EU/EEA-nationals within the fisrt 5 years). That would mean that -at least during the first 5 yeras of being a Cyprus resident- GHS is just another tax . Is that correct?
 
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Golden Fleece

Active Member
There is a simple reason why this option never got much interest: The status is not in line with any DTT and will not shield you from a tax claim of any other nation.
This is a critical point. You can have a legal tax residence in another country, but if your home country does not accept that other country's (far too easy to obtain) tax residence status, then it is useless for tax planning purposes.
 

therover

New member
Georgia is also another interesting option for a nomad, you can distribute profits to an FTZ IT company in Georgia from the Estonia company and pay 5% taxes. That's all. The tax residency can be easily obtained and there is an option to do not reside there 183 days per year while still being tax considered resident if you apply as HNWI, or alternatively rent a 150€/month cheap studio and declare you live there. Georgian authorities do not perform a strict tax control of foreigns entering or leaving the country. Plus banking in Georgia is quite easy and fast. Baking privacy with no CRS reporting for now. Bureaucracy is low. Prices are low. Public institutions are mostly efficient.
I checked Georgia quite extensively. It would work and it has low taxes for small businesses (it doesn't have to be in the VZ).
But there is a problem, it is not compatible with the Estonian entity.
In order to get tax citizenship you need to be resident (live more than 183 days), or "fake" it, paying a rent ecc.. but this means that the Estonian entity becomes a PE and it can be problematic.
The HNWI is not something that works with double tax treaties, I've talk with a tax advisor about it.
It is an option that would require me to close the Estonian entities and operate only through Georgia.. nice, but not so nice.. Having a company in Europe that is super easy to manage is a must.
 

therover

New member
I would sugest Romania. If you find a local company to employ you for minimum wage, you’ll be employed with a full tax residency (as you are a full time employee in Romania). You’ll also need a local address and maybe a local mobile phone contract (for banking).

I have some friends in there.. It's just a mess to deal with the government, corruption is still diffuse, bureaucracy very painful.. no thanks.
 

therover

New member
As you have your company in Estonia, why don't you get residency there? Estonia as no personal income tax on dividends received and as long you stay in the Estonian population register you are considered resident (and tax resident) from day of arrival... To be in the population register you just have to rent a place (can just be a cheap room/studio), add yourself in the population register and go the police station to get the Estonian resident ID card then you can give your new residency to your previous country, open a resident bank account in Estonia. etc..
This might be a good option. To rent something there is a waste of money.. but It makes sense to explore the option.
 

therover

New member
Another option that could be interesting is to actually go back to Italy. There is a 90% tax reduction if someone has been abroad for more than 3 years.
It could be an easy and effective option.
But at the same time.. you don't really want to deal with Italian bureaucracy as well.. I enjoy working and going around, the paperwork should be simple and limited to the right amount of time.
 

CaptK

Nominee Company Bank Account Real Estate Passport
Mentor Group Gold
Montenegro would be a good choice also.
 

Bagpacker

New member
I am currently looking into Cyprus.
As far as I was able to find out, it is impossible to receive any GHS-benefits within the first 5 years of residency in Cyprus. Only after becoming a "permanent resident" GHS grants benefits. Nevertheless, the 2.65% GHS contribution are even due while still being a "temporary resident" (for EU/EEA-nationals within the fisrt 5 years). That would mean that -at least during the first 5 yeras of being a Cyprus resident- GHS is just another tax . Is that correct?
And today I am able to answer my own question hap¤#" :
The above is correct if a person is self-funded. As long as a self-funded person (e.g. retiree) is not a "permanent resident" (yellow slip MEU3) he/she will not be able to benefit from Cyprus General Healthcare Service (GeSY/GHS). Only a legally employed person with monthly salary has the "privilege" to benefit from GeSY/GHS within the first 5 years. All others have to wait until they become permanent residents.
That said, for a temporary resident (yellow slip MEU1) the GeSY/GHS is just another tax with all the usual accounting requirements (= 2.65% on a max. of EUR 180'000.-).

Considering the other disadvantages of living on an island + the fact that Cyprus is not exactly cheap, I would still consider Bulgaria to be the most attractive option within the EU/EEA.
 
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