What country would you choose to relocate to avoid taxes?

[Spinat]

Hi Guys,

I was wondering which country you would choose to relocate to in order to avoid all- or at least most taxes one has to pay private and for a owned company?

So far I have been looking at:
Cyprus
Bulgaria
Georgia
Switzerland

Any input, comments or other relevant would be nice to learn about,

 

[joseph15]

UAE. As far as I know they don't have income tax for individuals but cost of living can be high.

 

[zyzl]

UAE. As far as I know they don't have income tax for individuals but cost of living can be high.

Can you tell me what kind of company foundation is needed to receive a visa to live inside the UAE? I have read that this is not possible with a regular offshore company?

 

[Sols]

It depends on so much: lifestyle, family/kids, language, budget, business type, how you get paid, weather/climate expectations, religious/cultural considerations, and more.

UAE is already mentioned but Oman, Qatar, and Bahrain all have interesting tax regimes — and all have their own pros and cons.

If you don't mind living on very small islands Malta, Isle of Man, Guernsey, Jersey, Mauritius, and much of the Caribbean can be attractive. If we look at mainland Europe, there's Andorra, Monaco, Gibraltar, and Campione d'Italia which are very small but at least you're not locked on an island.

Costa Rica and Panama aren't for everyone (especially Costa Rica can be a little rough around the edges) but under the right circumstances, you're looking at very low or zero tax and low costs of living.

Singapore and Hong Kong have very high costs of living but you can achieve a very low tax rate. And Brunei. Malaysia and Philippines are also worth taking a look at.

If you live on purely capital gains, US can be very attractive.

 

[Spinat]

No kids, no women, no family So nothing like that will limit me.

Campione d'Italia

Yeah I see it is the same canton as Lugano, I have been in Lugano and it's very attractive 5% personal tax only! But it's not that easy to relocate to Switzerland even as an EU citizen. Lots of rules and regulations will stop you from doing so as far as I figured out.

Gibraltar, I have never been there and don't know how easy it is to relocate as an EU citizen, any idea?

 

[Sols]

Pretty much the same immigration rules as UK. We'll see what happens with Gibraltar once Brexit is finalized later this year.

 

[GrumpyMess]

I was wondering which country you would choose to relocate to in order to avoid all- or at least most taxes one has to pay private and for a owned company?

Unfortunately, such a country doesn't exist, however let's review the options we have. I repeat from the past topics that a residency without a double tax treaties is useless, because you won't have a protection if something goes wrong.

Switzerland

Yeah I see it is the same canton as Lugano, I have been in Lugano and it's very attractive 5% personal tax only! But it's not that easy to relocate to Switzerland even as an EU citizen. Lots of rules and regulations will stop you from doing so as far as I figured out.

Switzerland not only has a lot of regulations and hidden taxes such as wealth tax, but also it's a quite expensive country to live. You won't get 5% personal tax overall, I would count on an effective rate at least 15% which equals to a lot of European countries. It's lump sum taxation is ok only if you make at least 1kk yearly, otherwise I would go for Italian lump sum regime.

Bulgaria

It's definitely not an option. The country just sucks.

Cyprus

Year after year Cyprus is becoming less and less attractive. It's bank system is awful. They introduced a social security contributions tax for dividents which is nonsense. In addition, it’s quite expensive and boring to live there. Having a car is a must there, which also complicates the residence.

Georgia

The country is a privacy disaster, however if you don't care about privacy it's a good choice, since it's a quite cheap place to live and no CRS. The taxes are also minimal.

UAE. As far as I know they don't have income tax for individuals but cost of living can be high.

I find a freelancer visa in UAE a good option also, since it's cheap and freezones companies have a huge problems in opening bank accounts anyway. However I haven't heard of anyone used this route.

If you don't mind living on very small islands Malta, Isle of Man, Guernsey, Jersey, Mauritius, and much of the Caribbean can be attractive. If we look at mainland Europe, there's Andorra, Monaco, Gibraltar, and Campione d'Italia which are very small but at least you're not locked on an island.

Almost all these countries except Malta probably won't have a double tax treaty with your passport country, so they are useless. With the same success you can have no tax residence at all.

 

[Sols]

Almost all these countries except Malta probably won't have a double tax treaty with your passport country, so they are useless. With the same success you can have no tax residence at all.

The topic at hand includes residence. If we assume residence and company in the same jurisdiction, I'm not sure how double taxation factors in.

 

[challenge]

I think Campione d'Italia had some changes recently, I know they also have VAT now, plus other changes starting this year but I don't know anything more, just google it.

 

[user9823671]

Relocate to as in to live? Or just to claim a residency and spend the smallest amount of time there as possible?

From what I can tell the decision should focus on more, do you like being in a big city with modern facilities, are are you happy in a sleepy, slower paced kind of life. IF you are in a place you hate, but save a few % on tax, is it really worth, sure you have more money but you hate your life.

Personally, I couldn't bear to live in one of the Arab petro states with their mega city mall based living style and would prefer some Carribbean backwater beach island

 

[countryfree]

You may consider Hungary.
Personal taxation is a but high, I think it has the highest VAT rate in the EU, but there's little tax on business, and Budapest is a great place to live. Much nicer than Bulgaria or Georgia and the Arab countries.

 

[Tax Cow]

Travel to those places, and go for the lifestyle and atmosphere that suits you. More money saved on taxes won't make for a good life if you hate everything you see and hear around you.

Now, the only exception to the above would be if the hated country is used as a stepping-stone for wealth accumulation.

To a 20 y.o yellow-vest who loves Paris France, I'd suggest enduring that 3-5 years of pain abroad only to return with a heavier wallet.

 

[AlbanyJames]

If you don't mind caribbean island living and enjoy travelling, The Bahamas is not bad. You can get a nice place and live in relative peace with no taxes and no restrictions/requirements at the moment. Very close to US East Coast with a ton of daily flights so you can be in/out of major cities (miami/nyc etc) in no time.

I was also reading up on Greece that just announced a 5y golden visa style program (I believe Italy has something similar) where HNWI 100k EUR flat tax and foreign income not brought into Greece is tax free but requires couple months residence. Greece is definately a great place to live.

 

[manwithtoupe]

You're gonna be looking at countries with either no personal taxation (e.g. UAE and Monaco), territorial taxation (e.g. Singapore, Hong Kong), countries with tax-exemptions for foreigners that move there (e.g. Chile and Cyprus).

Here's a list: International taxation - Wikipedia

Hong Kong and SIngapore

Territorial taxation. You can run a foreign company and not be taxed on the profits it derives outside of HK or Singapore.

Pro's:

1. Highest quality of life of all the countries on the list

Con's:

1. High living costs
2. Must stay there 183 days a year to retain tax residency (in HK's case this changes once you have spent 7 years there - at that point you have a lot more freedom)

Cyprus

No personal tax on dividends for foreigners that become residents. You can run a foreign company (or even a Cyprus company) and pay yourself solely in dividends, paying 0% personal tax.

Cyprus recently enacted CFC rules for companies (2019) but have no CFC rules for individuals yet. This means that you can run your foreign company while staying in Cyprus, without having the company be considered a tax resident of Cyprus, and without paying the 12.5% corporate tax of Cyprus.

Pro's:

1. The residency is very accessible to EU citizens
2. It is cheap to live there compared to Hong Kong and Singapore (except for Limassol, rent is beteeen 25-50% of HK and Singapore)
3. Using their 60 day rule you can stay there for 60 days a year only (Note: This costs $10k in annual expenses to maintain)

Con's:

1. Not the same quality of life as in HK or Singapore
2. They are currently introducing an exit tax

For a cheaper alternative to the ones above, you might go to Chile (0% personal tax first 6 years), or any of the following territorial taxation countries:

Georgia, Panama, Costa Rica and Paraguay.

The quality of life will be lower in those (compared to HK, Singapore and even Cyprus).

Other honorable mentions

If you have a decent income of about $50k or more a year, you may also consider Andorra. They have a 90-day rule, which lets you stay there 90 days only, while still maintaining residency.

Gibraltar, Monaco and certain Swiss cantons are also options, if you are loaded with cash.

Another option is Croatia. Croatia does not have CFC rules for individuals. You can run a foreign company without it being considered tax resident of Croatia. Personal income tax is 12%. Possibly has higher quality of life than Cyprus. And is much cheaper than HK/Singapore.

If you're okay with paying some tax, Hungary might also be an option. However, you cannot run a foreign company there due to the CFC rules. Same for Romania and Bulgaria.

Giving up your citizenship

Lastly, there is the option of giving up your citizenship and buying a citizenship of a Carribean island (e.g. Nevis). This is the only real option for US citizens.

 

[fshore]

Croatia does not have CFC rules for individuals. You can run a foreign company without it being considered tax resident of Croatia.

Not if you want to follow the law.
From: Croatia - Corporate residence

.. whose place of effective management and control of business is in Croatia.


Not sure how strict they are, but I would trust pwc more than you.

 

[manwithtoupe]

Year after year Cyprus is becoming less and less attractive. It's bank system is awful. They introduced a social security contributions tax for dividents which is nonsense. In addition, it’s quite expensive and boring to live there. Having a car is a must there, which also complicates the residence.

There is no need for Cyprus tax residents to bank in Cyprus.

There is a defense contribution on dividends of 17%, however it does not apply if you are non-domiciled (which you will be, as someone moving there).

There is a social security contribution of 10-15% on all salaries paid, however you can just pay yourself in dividends. If you do pay yourself a salary, the first 19k euros will be taxed at 10-15% (including this contribution), and after that at 30-35% (including this contribution). Lesson: Pay yourself as small a wage as possible (10k euro with Cyprus Ltd, 0 euro with foreign company) and take the rest out of dividends.

I agree with your other points.

 

[JustAnotherNomad]

There’s also Portugal NHR. No minimum stay for tax residency, no tax on dividends received from a foreign company for 10 years. But beware of CFC rules and effective place of management.
And of course, Portugal won’t challenge your Portugal tax residency, but another country might.

 

[nomad999]

Ever thought of Thailand ? in short, no tax on foreign income not brought inside the kingdom during the current fiscal year.

 

[stefpdt]

Like countryfree said I think Hungary is a good bet if you want to attract quality employees to work from a physical location. Budapest has a low cost of living plus legitimately good lifestyle, pubs, clubs, world class bath houses and health services. The tax situation isn't ideal but I'm at a point where I care more about building something long-term in a cool city with legit employees. And Budapest is probably the best option in Europe for attracting talent. A single high-performing employee can make you ten times more money than a bunch of scrubby employees so location and cost of living is fairly important.

Austria is another very good option to consider.

Overall, tax is a medium-high priority rather than the absolute highest priority when it comes to building a serious business.

Good thread though!

 

[avalanche]

Hi Guys,

I was wondering which country you would choose to relocate to in order to avoid all- or at least most taxes one has to pay private and for a owned company?

So far I have been looking at:
Cyprus
Bulgaria
Georgia
Switzerland

Any input, comments or other relevant would be nice to learn about,

Go for Armenia. As long as your LLC does not make more than $250,000 annually you can be qualified for 5% turnover tax and 5% dividend tax. The only problem is 20-23% withholding tax on payment for services sent to non-residents and salaries. But if you are on simple taxation regime (with under $250k annual revenue), then you don't have to declare expenses. There is also a chance to avoid paying any VAT if your services are provided outside of Armenia.

You can easily get a corporate bank account there (especially if you are russian citizen) and get merchant account for it (if you have basic substance in Armenia)

P.S this information is given to me by a lawyer from Armenia.