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Mentor Group

Why risk offshore? Just pay some taxes

jenhuang30

New member
Hi,

I was discussing with a friend about the following situation: Why would you risk your ass to go offshore if you could just:

1. Incorporate the company in your country (As long as the Corp tax is max 25% is it still fair)
2. Accumulate money into the LTD and then
3. Move to a country with low dividend tax like Portugal (0%) or Slovakia (7%) and get out all dividends from your LTD without health insurarance.

As long as the tax rate is 25% + (0% to 7%), it is not a big drama as you will have all those advantages.

A. Cash into a safe country and possibility to make investments and more
B.No Offshore cost, Risks, fraud, etc.
C.No Taxation Risk (claims, process, audit, etc)


Does it make this sense to you?
 

georgio

New member
That means you will be able to touch the dividends when you will move to the other country? e.g. in 3-5 years. How do you live till then?
 

jenhuang30

New member
That means you will be able to touch the dividends when you will move to the other country? e.g. in 3-5 years. How do you live till then?
You get get a min. salary like 10K - 15K, base health contribution (2000-3000 euro) and accumulate the dividends, no?
 

fshore

Entrepreneur
Hi,

I was discussing with a friend about the following situation: Why would you risk your ass to go offshore if you could just:

1. Incorporate the company in your country (As long as the Corp tax is max 25% is it still fair)
2. Accumulate money into the LTD and then
3. Move to a country with low dividend tax like Portugal (0%) or Slovakia (7%) and get out all dividends from your LTD without health insurarance.

As long as the tax rate is 25% + (0% to 7%), it is not a big drama as you will have all those advantages.

A. Cash into a safe country and possibility to make investments and more
B.No Offshore cost, Risks, fraud, etc.
C.No Taxation Risk (claims, process, audit, etc)


Does it make this sense to you?
Many country have exit taxes, so the capital gains of your Ltd can get taxed when you become non tax resident.
 

jenhuang30

New member
Many country have exit taxes, so the capital gains of your Ltd can get taxed when you become non tax resident.
do you mean Withholding tax?

The hometown country of the LTD get 10% on dividends, Slovakia charge you 7% so you will get back this 3% and this the dividends at 7%. if Portugal non habirtual resident, you can lower this to zero.
 

fshore

Entrepreneur
do you mean Withholding tax?

The hometown country of the LTD get 10% on dividends, Slovakia charge you 7% so you will get back this 3% and this the dividends at 7%. if Portugal non habirtual resident, you can lower this to zero.
No, I mean exit tax on untaxed capital gains.
 

jenhuang30

New member
No, I mean exit tax on untaxed capital gains.
Hi,

As far as I know there are 2 scenario:

1. EU Holding - Child FREE Dividends
2. Withholding Tax According to the DBA for dividends to private individum

Where did you hear about exit tax between EU and EU?
 

Remy

Active Member
Hi,

I was discussing with a friend about the following situation: Why would you risk your ass to go offshore if you could just:

1. Incorporate the company in your country (As long as the Corp tax is max 25% is it still fair)
2. Accumulate money into the LTD and then
3. Move to a country with low dividend tax like Portugal (0%) or Slovakia (7%) and get out all dividends from your LTD without health insurarance.

As long as the tax rate is 25% + (0% to 7%), it is not a big drama as you will have all those advantages.

A. Cash into a safe country and possibility to make investments and more
B.No Offshore cost, Risks, fraud, etc.
C.No Taxation Risk (claims, process, audit, etc)


Does it make this sense to you?
But you cannot move to another country like that with your limited. Your Limited in your hometown country will be taxed in the same manner if you live there or not, because this is the activity that is taxed, not you. Of course, you can get better treatment from your personal earning from your limited in the second country, but I don't understand well your point. If your limited can do business with you, living in another country, why not just leaving now; why wait for 3 or 5 years ?
 
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fshore

Entrepreneur
Hi,

As far as I know there are 2 scenario:

1. EU Holding - Child FREE Dividends
2. Withholding Tax According to the DBA for dividends to private individum

Where did you hear about exit tax between EU and EU?
Exit taxes are common knowledge. You should check if your country has them, and what threshold there might be.
 

Remy

Active Member
Hi,

You can keep your Limited into your hometown, then in EU you are free to move and live where you want as Director for 183+ days.
I agree, but why don't you move now in the second country if you can manage your limited from another country in EU ?
 

jenhuang30

New member
I agree, but why don't you move now in the second country if you can manage your limited from another country in EU ?
This is a good point, basically because my country has a strong reputation and safe banking system. Slovakia and portugal are not safe countries
 

Remy

Active Member
This is a good point, basically because my country has a strong reputation and safe banking system. Slovakia and portugal are not safe countries
I understand, you will have the same problem in 3 or 5 years, Slovakia or Portugal won't be safer, and your country (Germany, UK, France...) will be as safe than now. Unsolvable problem. Finally, maybe you won't move never...
 

void

Entrepreneur
It's always interesting to see people thinking that 25% corporate tax is "fair" or that Slovakia is less "safe" than France or Germany :-D - tell me where's the difference?
If I'd have to make a decision whether to deposit 1M EUR in French or Slovak bank I'd choose Slovakia without thinking
 

jenhuang30

New member
Thanks guys.

The concept is to pay this "fair" 25% and then accumulate capital. Once ready, Portugal or Slovakia can get the dividends on a monthly base and you could move the dividends in any country of your preference...

Do you think 25% or 25% + 7% is still better than offshore? I think so...
 

Remy

Active Member
I think 0 % in RAK, BVI, Samoa or 0 % in Hong Kong for outside business is better.. but that's just my point of view... I solved 10 years ago the question : "should I move or not ?" I moved. The point is : could accumulate the same capital for your limited if managed from abroad, if yes, why waiting for that ? If no, you have no guarentee your limited won't decline after your move, ruining your plan.
 
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jenhuang30

New member
I think 0 % in RAK, BVI, Samoa or 0 % in Hong Kong for outside business is better.. but that's just my point of view... I solved 10 years ago the question : "should I move or not ?" I moved.
Yes but you always live in a gray zone... stress, problems, etc. also the regulations and laws are dramatically changing.. Do not you think so?
 
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