UK citizen Italy resident. Need offshore Co and USD a/c

[HKS]

Hi,
Presently living in Italy. UK Citizen
Need a Offshore structure for trading in goods. Goods directly shipped to clients from Factory. No physical movement via Italy.
Also require a USD currency bank account.
Will be a Self employed person in Italy. Its the best Local advice given to limit taxes here. To be self employed as a company director with a fixed income. (limiting the tax) As its very high here.

Need to protect the company funds and limited reporting back to Italy.
If there is some way to get an account and also use a 3rd country for Residency proof of address etc?

Any guidance is welcome, have been out of touch with offshore for too long to rely on that knowledge, as well as too many recent changes..

Many thanks in advance for your assistance.

 

[Internationaloff]

Are you a legal resident in Italy? Did you get the Italian tax code (Codice Fiscale)?

 

[HKS]

No this step has not been taken until the structure needed is confirmed.

 

[HKS]

Are you a legal resident in Italy? Did you get the Italian tax code (Codice Fiscale)?

Hi, Any further thoughts or suggestions after your last question.. ANSW: No local Italian registration done yet.

 

[KraftyAndy]

Hi,
Presently living in Italy. UK Citizen
Need a Offshore structure for trading in goods. Goods directly shipped to clients from Factory. No physical movement via Italy.

You realise that in terms of taxation, running an offshore business from Italy is no different to running an Italian business from Italy?

If you run an offshore company from Italy, it becomes a resident company in Italy for taxation purposes.

Place of effective management and corporate residency are rarely talked about but they are so so important.

 

[HKS]

You realise that in terms of taxation, running an offshore business from Italy is no different to running an Italian business from Italy?

If you run an offshore company from Italy, it becomes a resident company in Italy for taxation purposes.

Place of effective management and corporate residency are rarely talked about but they are so so important.

Hi Andy,

Thanks for the clarity on this, I will further check with the local tax advisor here in Italy.
To brief you we were given an option that I can register myself as self employed (director) of the business.
This is legal and possible hence we continued to pursue the offshore location.
Our present Company location is UAE (freezone), this has been the case for many years.
However they are increasing their complexity and adding fees as and when it suits them. This is now becoming a challenging situation to work under.
In order to continue this option which keeps the company in a tax free zone as well as myself having a residency, is the regular travel to keep that active as well as their banking is not geared up for "full Remote" working.
We often face issues where Banks ask us to visit the Branch, which has to be done to prevent all the transactions from being placed on hold, making it unavoidable.
To overcome the business issues with the Freezone we can appoint a company to do this work for us.. at a cost.
For a simpler solution we felt locations which are geared up for Remote working, and banks which support them to be more ideal for us.
This information by no means we have all the answers. Hence we reached out to The most Experienced Forum users to assist.

Thanks

Hanif

 

[KraftyAndy]

This is what the OECD say about tax residency in Italy - https://www.oecd.org/tax/automatic-...istance/tax-residency/Italy-Tax-Residency.pdf

According to Article 73 (3) of the Italian income tax code, companies and entities are considered resident in Italy for tax purposes if at least one of the following conditions are met for a period of time that is greater than half of the tax period:

1. Place of incorporation;
2. Place of administration of the entity;
3. Place where the main and substantial activity is carried on.

For all intents and purposes, you are trying to avoid paying corporation tax in Italy whilst still operating from Italy. Any rational government would have an issue with this for obvious reasons.

There are ways around this, but it's going to be focused on you as an individual and where you are a tax resident.

 

[HKS]

Hi Andy,

Thanks for the information. I will further read into this.

I am interested in your comment : "There are ways around this"
Any tips on the direction of reading and investigation?

Thanks
Hanif

 

[KraftyAndy]

Any tips on the direction of reading and investigation?

Sure - it involves becoming a resident of countries like UAE, Panama etc.

 

[HKS]

Hi,

Presently I am already a UAE resident. However after staying here for a certain period I have to register locally and then I get into the scenario of employment status. hence the Self employed option as suggested by local tax specialist. It the wanting to move the business away from UAE due to issues mentioned before which is the aim. So i will now look into Panama residency and see how that comes out. Any other locations to look into?
Thanks
Hanif

 

[KraftyAndy]

There are other countries like Malta etc. that can be tax efficient, but none of those overcome you main problem.

If you live in Italy, have a substantial presence and run the business from there, you ultimately become a tax resident along with your company.

The only way around this is to spend less time in Italy and be seen to run the business from multiple locations.

 

[HKS]

There are other countries like Malta etc. that can be tax efficient, but none of those overcome you main problem.

If you live in Italy, have a substantial presence and run the business from there, you ultimately become a tax resident along with your company.

The only way around this is to spend less time in Italy and be seen to run the business from multiple locations.

I would have thought that most people who are on this forum and seeking some form of offshore structure face similar issues that they are resident in their main home country and seek a presence to protect some of their business/assets or other investments from higher taxes?
Or am I completely wrong about the whole concept of Offshore structures?
Many of the discussions are quite general and /or don't quite apply to my circumstances. Hence my detailed explanation to find a working solution, without leading a nomadic life as that has been a trend for many self employed remote workers.

I am confident there is a solution out there, it just finding it. Im sure some members know the solutions for this scenario?

Thanks for being the one the reply on this .

 

[KraftyAndy]

If it was as simple as setting up an offshore tax haven to avoid tax, then most companies in the world would be doing this.

You essentially want to avoid pay corporation tax in Italy whilst still running the company from Italy. It's not unsurprising that the tax authorities in Italy would have an issue with this because of lost tax revenues.

If you want to stay in Italy, then you will need professional advice as to how to avoid an offshore company being seen as a resident company in Italy. I wouldn't trust an online forum as you can end up in a real mess if things go wrong.

 

[hiju]

Presently I am already a UAE resident.

Where is that exactly if you don't mind me asking?

Can you let me know what the overall costs are per months for renting a flat, buy food, insurance (the mandatory one) and other things I may need to be aware of if I plan to relocate?

Hope you don't mind asking.

 

[HKS]

Hi,

I was living in Sharjah.
The costs of living all depend on your personal preferences.
They have increased these past few years so its no longer an easily affordable place as it once was some years ago.
However many people still like it.
I suggest you check out forums for a lot of information in UAE.
Insurance is mandatory for employed staff and paid by the employer. If you are setting up your own business then that choice is dependent on your needs and expectations of the coverage you want.

I also suggest that when you have done some more background and have a lot of figures for the questions you have, you make a trip there and see for yourself what life can be like. Then make a decision to consider to move.

It might be great for me to suggest things as thats what I may love, but not what you would like, so my view has no basis or reference of what you may trust that on.

Sorry it sound vague but its a big decision and something you have to see and find out for yourself.

Regards

H