UAE vs Panama vs Romania Micro vs _____?

[Kakarot]

just for fun, I'd like to hear everyone debate which jurisdiction is best and why. And I mean somewhere where you can form the company, get the decent merchant bank accounts that are relatively safe and stable, minimize taxes and use the place as your tax residency to protect yourself.

In 2021 which jurisdiction has it all?

Let's assume you're the relative norm (or what I assume to be the majority of small to medium offshore businesses) -- some kind of merchant or services company who needs transactional bank accounts for receiving wires from clients and potentially paying suppliers. Most of the world's sales are to USA and Europe I think. So let's assume your clients are from richer countries, not poor ones. Because that's much more likely I think for most of us.

The 3 contenders for this game I can think of are:

UAE from what I know is zero taxes, you can get the resident visa, be tax resident, the banks are not too too hard to get -- but forming and maintaining a UAE company is pricey. But you only need to be there 1 day every 6 months. Not bad.

Panama's friendly visa program sounds even better. You don't pay corporate tax, nor personal income tax (under most conditions), you only have to visit every 2 years to maintain your residency status, and a panama company is drastically cheaper to make and maintain then UAE. So panama is another jurisdiction where you can have it all potentially. I guess many could argue panama isn't as respected or trusted as UAE -- but if you're residence is there, your banks are there, AND your company is formed there -- I don't think you carry nearly as much of the stigma as like a canadian with a BVI LLC.

The romania micro business sounds strong too. But you'll still get taxed at 1-3%.

But what's other people's opinions?

The game again is a place that can cover all your bases: low corporate tax, tax residency with low personal income tax, reasonable prices to make and maintain the company -- no excessive accounting or auditing rules...

I hope the experts here can shed their insight to newbies like me.

 

[JohnLocke]

The romania micro business sounds strong too. But you'll still get taxed at 1-3%.

It may be reasonable to pay just a little tax to keep the troubles from the door.

Depending on where you live in this world both countries may be worth to look into for some sort of legal structure to reduce tax. Personally I would not trust any of these countries with my hard earned money unless I would be very close to the bank or live in the country and had a good network of lawyers and tax attorneys.

 

[andrewb]

just for fun, I'd like to hear everyone debate which jurisdiction is best and why. And I mean somewhere where you can form the company, get the decent merchant bank accounts that are relatively safe and stable, minimize taxes and use the place as your tax residency to protect yourself.

In 2021 which jurisdiction has it all?

Let's assume you're the relative norm (or what I assume to be the majority of small to medium offshore businesses) -- some kind of merchant or services company who needs transactional bank accounts for receiving wires from clients and potentially paying suppliers. Most of the world's sales are to USA and Europe I think. So let's assume your clients are from richer countries, not poor ones. Because that's much more likely I think for most of us.

The 3 contenders for this game I can think of are:

UAE from what I know is zero taxes, you can get the resident visa, be tax resident, the banks are not too too hard to get -- but forming and maintaining a UAE company is pricey. But you only need to be there 1 day every 6 months. Not bad.

Panama's friendly visa program sounds even better. You don't pay corporate tax, nor personal income tax (under most conditions), you only have to visit every 2 years to maintain your residency status, and a panama company is drastically cheaper to make and maintain then UAE. So panama is another jurisdiction where you can have it all potentially. I guess many could argue panama isn't as respected or trusted as UAE -- but if you're residence is there, your banks are there, AND your company is formed there -- I don't think you carry nearly as much of the stigma as like a canadian with a BVI LLC.

The romania micro business sounds strong too. But you'll still get taxed at 1-3%.

But what's other people's opinions?

The game again is a place that can cover all your bases: low corporate tax, tax residency with low personal income tax, reasonable prices to make and maintain the company -- no excessive accounting or auditing rules...

I hope the experts here can shed their insight to newbies like me.

Hello,

I am a business owner in Romania . let me know exactly what do you need to do with a company in Romania ? What kind of business you want to conduct

 

[Kakarot]

from my limited knowledge the romania micro business looks good. 1-3% corporate tax - although the personal income tax looks scary, apparently going up to 45%. So if I lived there... I'd get the 1-3% tax on my profits right for my company taken, and then another potentially 45% again in personal income tax on those profits when i use the money (receive dividends)? Is that correct so far?

I'd want to set up a business where I sell stuff from factories in china to usa clients. I'd need transactional merchant bank accounts for wires coming from usa, and paying my suppliers in china.

 

[andrewb]

So let me enlight you regarding the 1 % tax / this is applicable if your company in romania has over 2 employed persons . Yes, for the employed persons you need to pay around 42 / 49 % ( there are some industry sectors like constructions that has some benefits from the state ) . This is not quite necessary .. for example in Romania there are a lot of employees that on papers are paid with around 500 usd, so therefore you pai to the romanian state 420 usd aprox , but also you can pay the employees 500 usd + extra "black cash". Romanians are happy to do this in some situations because they know is a win win situation for both sides , the company owner is not paying so much to the state, but can pay 300 usd extra unoficially to his employee .
In order to form a company in Romania you need to have an administrator , romanian citizen or resident .This individual doesnt need to have a labour contract registered at the ministry of labour .You can pay him unofficialy ..
For the 3 % tax you do not need to have an employee , you just need to have an administrator, that can open a bank account for you , and represent you at the fiscal authorities . Accounting in Romania is the price range of about 100 eur / 250 eur / month , it depends about the volume of invoices, what kind of tax declarations needs to be made in behalf of the company etc.

 

[andrewb]

from my limited knowledge the romania micro business looks good. 1-3% corporate tax - although the personal income tax looks scary, apparently going up to 45%. So if I lived there... I'd get the 1-3% tax on my profits right for my company taken, and then another potentially 45% again in personal income tax on those profits when i use the money (receive dividends)? Is that correct so far?

I'd want to set up a business where I sell stuff from factories in china to usa clients. I'd need transactional merchant bank accounts for wires coming from usa, and paying my suppliers in china.

Also regarding the 1-3 % , is not from your profits , is from your revenue . So for example if in April you are invoicing the other companies the amount of 100.000 USD , your tax for this amount is 1000 usd / 3000 usd . this tax need to be paid until 25th May . It is not an annual tax .

 

[Kakarot]

thats definitely a super annoying system then in romania -- submitting taxes every month? Wow. You'd need to keep an accountant on staff year round.

then I'd like to enter into discussion HK and Singapore.

There's technically no corporate tax for either if you simply have all your clients in other countries. In singapore if you remit the money to singapore, you're taxed. So oddly, with a singapore corporation, you cannot really use the singapore banks.

And I've heard it's nearly impossible to get a HK bank account for a new HK company nowadays -- except for a fintech like neat or something.

But a real bank -- it sounds super hard nowadays - like you'd need a massive deposit to have any chance.

What about forming a HK company, and banking in singapore? deposit 30 grand and get an OCBC account perhaps.

HK companies have audits which I heard can be aggravating if you have many small transactions.... but if you're a wholesaler... with just a few bulk orders every month....

why not open a HK business, bank in singapore (and possibly live there too -- their personal income tax isn't bad), and sell to USA and europe so HK doesn't tax you anything.

Is this a realistic option? On paper, technically, it should work AFAIK -- but I'm no expert.

Lovely thing about a HK company is you can open one in a few hours. It's that fast apparently. And neither singapore nor HK is terribly expensive -- at least not compared to UAE.

 

[andrewb]

thats definitely a super annoying system then in romania -- submitting taxes every month? Wow. You'd need to keep an accountant on staff year round.

then I'd like to enter into discussion HK and Singapore.

There's technically no corporate tax for either if you simply have all your clients in other countries. In singapore if you remit the money to singapore, you're taxed. So oddly, with a singapore corporation, you cannot really use the singapore banks.

And I've heard it's nearly impossible to get a HK bank account for a new HK company nowadays -- except for a fintech like neat or something.

But a real bank -- it sounds super hard nowadays - like you'd need a massive deposit to have any chance.

What about forming a HK company, and banking in singapore? deposit 30 grand and get an OCBC account perhaps.

HK companies have audits which I heard can be aggravating if you have many small transactions.... but if you're a wholesaler... with just a few bulk orders every month....

why not open a HK business, bank in singapore (and possibly live there too -- their personal income tax isn't bad), and sell to USA and europe so HK doesn't tax you anything.

Is this a realistic option? On paper, technically, it should work AFAIK -- but I'm no expert.

Lovely thing about a HK company is you can open one in a few hours. It's that fast apparently. And neither singapore nor HK is terribly expensive -- at least not compared to UAE.

Accounting per month could be even 50 eur ( I personally pay 70 eur ) but I have a lot of declarations and VAT recovery procedures . i own also in Hungary a company, where I have a lower activity, and there I pay 150 eur .. you need to take in consideration also cost in HK for the virtual office , some building owner there. in romania you can solve it for free almost.

regarding HK + Singapore bank , I’m eyes and ears, also interested

 

[Dexur]

I'm going through the process of registering a micro company at the moment.
You don't need a local manager or anything like that.
You pay 3% tax on revenue if you don't employ anyone. You pay 1% if you have one employee with minimum wage (can be yourself).
Accounting is cheap, 50-100e month. You might need a physical office for another 100-250e/month.
Total expenses to register a company with a law firm would be around 1.5k eur.

You pay 5% dividend tax to get your money out of the company, so the total is around 6-8%.

Unless... you get UAE residency and use RO-UAE tax treaty. Then it's 0% dividend tax, your company has EU VAT, stripe etc.

 

[max4]

I'm going through the process of registering a micro company at the moment.
You don't need a local manager or anything like that.
You pay 3% tax on revenue if you don't employ anyone. You pay 1% if you have one employee with minimum wage (can be yourself).
Accounting is cheap, 50-100e month. You might need a physical office for another 100-250e/month.
Total expenses to register a company with a law firm would be around 1.5k eur.

You pay 5% dividend tax to get your money out of the company, so the total is around 6-8%.

Unless... you get UAE residency and use RO-UAE tax treaty. Then it's 0% dividend tax, your company has EU VAT, stripe etc.

You can employ yourself and get 1%? That sounds off to me.

 

[andrewb]

You can employ yourself just for your employee contract you pay a minimum of 200 eur monthly

 

[max4]

Yes, I understand but usually, there is an exemption on that. That makes no sense from the tax reduction perspective. So there either 2 employees required or one that's not the owner to get 1% I guess. But correct me if I'm wrong.