USA LLC vs Armenia LLC for a EU resident

[Traveler]

How's Georgia btw?

Georgia is great! And if you're willing to put in the days, in your case with $60k you'd likely qualify for 1% tax on turnover

 

[x00ni]

Which location do you recommend for living there? I might have a look at it

 

[JustAnotherNomad]

And "a lot of people are doing that" means nada. I spend most of my time in Georgia, where "a lot of people" move to every year, thinking that territorial taxation means freelancers who live here but have clients elsewhere aren't taxed, "because some blogs say so and other people are doing it". When they step in for a consulting session and realize that they in fact owe a significant amount in back taxes, and will be taxed at the full 20% (while had they set things up properly, it could've easily been 1%), they usually go through all 7 stages of grief.

You have no idea how good it is to read that, lol. I’m really pissed off by all these idiots who have no idea, break the law and then never get caught - and thus believe what they did was the right way to do it, so they tell others about it.

 

[Traveler]

Which location do you recommend for living there? I might have a look at it

It depends on what you're after and are used to. Personally, I'd never consider anywhere other than Tbilisi as that's basically your only option if you're looking for Western-style amenities. Ok, maybe Batumi, but Batumi is overcrowded during the summer months and dead during the winter. But I know plenty of people who live in smaller towns/villages and are perfectly happy with their rural lives. It's certainly an "interesting" place, though, in every sense of the word. One thing that I'll say is whoever considers moving here should first visit for at least a few weeks, or ideally a month. It's a place that has a lot to offer, but it's not for everyone.

 

[khinkali]

all these idiots who have no idea

Thailand was full of these folk. If you live on the beach and make $300 per month doing logo design or blog spamming for offshore customers, then nobody's really going to bother with you. Of course if you make good money, people start to care.

whoever considers moving here should first visit for at least a few weeks, or ideally a month

Wise words. I know people who would love, or hate, everywhere I've lived. And preferably not just a vacation going to tourist sites. It's good to walk around, use the metro, get a cellphone, do some mundane things to see if you would actually like living here.

 

[JohnLocke]

Wise words. I know people who would love, or hate, everywhere I've lived. And preferably not just a vacation going to tourist sites. It's good to walk around, use the metro, get a cellphone, do some mundane things to see if you would actually like living here.

great advise for everyone who want to relocate regardless to where you relocated to.

 

[ramosmarbella]

It is not illegal if you pay the VAT and all other local taxes and also follow the local accounting requirements. But then there are no tax savings, obviously (pick 2 out of 3). What you are looking for is “permanent establishment” - google it.

Since you are running things from your country, it is just like a bakery. It is completely irrelevant where your customers are or whether you are making bread or selling stuff online. You have permanent establishment (effective place of management) in your country. There are ways to work around that, but they aren’t cheap (pick 2 out of 3).
If you don’t believe me, ask your tax office. They will tell you the same thing.

I am an android developer. I reside in Spain. I do not charge people. I get paid royalties from google, apple, amazon. Can I open a New Mexico LLC and handle my business from there? I know I still have to pay taxes in my country, but this way I could avoid paying the monthly fee to be self-employed, around 300$/month. This way the LLC would be the one paying taxes, but since I am not US resident I would not have to. Is this possible? I just want the LLC to avoid paying the self-employ monthly fee no the taxes.

 

[Mark Ross]

Hi!

Just wonder which would you consider a better option for an EU resident doing 100% digital services with worldwide clients (mainly USA, EU and Australia clients).

Would you open an unipersonal (passthrough) United States LLC or an Armenia LLC ?

Thanks!

Romanian micro-enterprise. 3% income tax, minimal overhead costs and - if you decide - very easy to become a legal (and fiscal) resident, thus paying only 5% taxes on dividends (it is going to be more if you maintain your fiscal residency in Austria)
Contact me if you want to discuss more.

 

[x00ni]

very easy to become a legal (and fiscal) resident, thus paying only 5% taxes on dividends

Doesn't that imply moving to live in RU?

 

[x00ni]

I am an android developer. I reside in Spain. I do not charge people. I get paid royalties from google, apple, amazon. Can I open a New Mexico LLC and handle my business from there? I know I still have to pay taxes in my country, but this way I could avoid paying the monthly fee to be self-employed, around 300$/month. This way the LLC would be the one paying taxes, but since I am not US resident I would not have to. Is this possible? I just want the LLC to avoid paying the self-employ monthly fee no the taxes.

I'm in the same exact situation, damn "cuota de autonomos!" accordingly to a international tax company I consulted in Spain, is not a clean way to do it and they recommend to open a SL instead, as that would be more clean.
Ofc theres people running and LLC and managing from Spain, but looks like "Hacienda" can catch you anytime... I'm still trying to verify all this informations...

 

[Mark Ross]

Doesn't that imply moving to live in RU?

yes, of course.
But on a personal level we are talking about a fully european country (/lifestyle), with two low-cost flights a day to Vienna and (I think) 5/week to Salzburg, with a large community of expats of all ages....
By a company standpoint, you are issuing invoices from an EU jurisdiction. US and Australian customers would have no objection in receiving an invoice from anywhere, but your EU clients would have a hard(er) time accounting a Georgian invoice as a cost (not saying it is not possible - I am just saying that an EU invoice is a simpler solution for them)

 

[Mark Ross]

Doesn't that imply moving to live in RU?

I thought I read you are Austrian... if I am wrong, ignore the "Vienna/Salzburg" detail but the rest of my comment remains valid

 

[x00ni]

Got your point, and nothing against Rumania, been there before, but I'm not considering the option to moving there to live just bec of tax benefits... Although I wont mind visiting a second time

 

[Mark Ross]

Got your point, and nothing agains Rumania, been there before, but I'm not considering the option to moving there to live just bec of tax benefits... Although I wont mind visiting a second time

then Romanian micro-enterprise tax (3% on income) + Romanian dividend income (5%) + your country's individual income tax on foreign dividends based on the double-treaty tax with Romania (for most EU countries it is in the region of 15%,). You might still end up better off than using a domestic LTD/SaRL/GmBH

 

[x00ni]

I think the point we are all discussing here, is that managing a company out of your country in the benefit of better tax / conditions, while still being resident on your home-country can trigger some suspicious on local tax authorities, which they can consider your scheme a set up for avoiding tax... that's what we all wonder if it's 100% legal and legit, or if it can have some consequences later on..

 

[Mark Ross]

I think the point we are all discussing here, is that managing a company out of your country in the benefit of better tax / conditions, while still being resident on your home-country can trigger some suspicious on local tax authorities, which they can consider your scheme a set up for avoiding tax... that's what we all wonder if it's 100% legal and legit, or if it can have some consequences later on..

barred blacklisted countries, if you declare the foreign dividends on your local global income declaration (in Italy it is called "modello 730", in Romania it is called "Declaratie de Venit Global") and you pay the taxes described in the anti double taxation treaty, no, you actually have no problem.
The real question is what savings are you getting, in exchange for such a setting.
I mean, if this all saves you 5k/year, it is certainly not worth it.
If it saves 50k/year, we are talking about an amount for which it is worth swallowing a bit of complexity.

 

[JustAnotherNomad]

No, you are all wrong. My fingers are becoming sore from typing this over and over.
You cannot live and work in your high-tax country and just register a company in some other country and expect to pay that country’s taxes instead. If that was possible, everybody would be doing it. It would be the same as your government saying: “You know what, just decide how much tax you want to pay!”

I’m no expert on Spain, but I don’t think you can avoid the autonomo fees that way either. Because when everything is done from Spain, you must register a Spanish office for your US company and then it will be the same all over.
Unless you can avoid the fees with a SARL then you can’t avoid them with a US LLC or UK LLP or whatever structure. You’d need something more complex.

 

[Marzio]

I'm in the same exact situation

You have plenty of options in Spain or near Spain to reduce your taxes:
Open a Spanish S.L. in Ceuta or Melilla and you'll pay 50% discounted rate on corporate income tax meaning 12.5%
Start a company in Gibraltar and pay 10% taxes
Move your residency to Andorra and pay 10% flat
If you have some money and want to hire at least 3 people start a company in the Canary Islands, invest 50K and you'll pay 5% tax.

 

[ramosmarbella]

You have plenty of options in Spain or near Spain to reduce your taxes:
Open a Spanish S.L. in Ceuta or Melilla and you'll pay 50% discounted rate on corporate income tax meaning 12.5%
Start a company in Gibraltar and pay 10% taxes
Move your residency to Andorra and pay 10% flat
If you have some money and want to hire at least 3 people start a company in the Canary Islands, invest 50K and you'll pay 5% tax.

I dont live in any of those places. It has to be online.

 

[ramosmarbella]

I think the point we are all discussing here, is that managing a company out of your country in the benefit of better tax / conditions, while still being resident on your home-country can trigger some suspicious on local tax authorities, which they can consider your scheme a set up for avoiding tax... that's what we all wonder if it's 100% legal and legit, or if it can have some consequences later on..

have you talked to a spanish consultant? they told you the LLC route cant be used?