Hi!
I’m wandering what would be the best options for making money from a website with affiliate marketing links (US based affiliate marketing networks) and paying as ilttle tax and social security as possible (I’m not interest in receiving any benefits from the government).
Here are some of the options I’ve considered:
Live in Panama or other territorial tax country; Receive dividends from Wyoming LLC
Live in Panama or other territorial tax country; Receive salary from Estonian Company
Are these good options? Would no tax or social security be due? Do you have any suggestions?
You could relocate to Georgia, or open a company in Georgia as Georgia offers some zero or very low tax options and territorial taxation. Most importantly there is a tax treaty between Georgia and the USA so no withholding tax can apply when payments are sent to you from the USA. Low cost airlines fly to / from Georgia to many countries around europe and Georgia is a beautiful country (not an island in the middle of nowhere) with a lot going for it.
I was told that it could be a good option to open an Estonian company and then register the company with local tax authorities in Cyprus, that way I, if I am a tax resident of Cyprus, if I was to only receive dividends, no income tax would be due and I’d only have to pay 12,5% corporate tax, is this correct? It sounds like a good idea since Cyprus is a nice country with good weather and it’s in Europe.
Can your model pass the economic substance tests in Estonia? Will you have staff there? Will they be performing the functions that your business commercialises? If not then you may as well not have an Estonian company. It will be seen as tax avoidance mechanism for example if you try to use Estonian tax treaties etc to reduce withholding tax. Being registered in a country is not to be confused with the seat of management and operations (economic substance) being located there.
I think you’ll find that article is missing some details. A friend looked into that flat tax rate thing and there was a fairly hefty minimum amount that you need to pay (I seem to recall north of €60k).
In every case you must be proactive and forward looking, and see what it would cost to set up in your chosen jurisdiction with some economic substance. Historically economic substance was a problem for bigger companies and ‘little people’ you could open a bvi and operate it from practically anywhere and nobody worried. Now its all about economic substance in your chosen jurisdiction or you can expect your company sooner or later will be treated as transparent for tax purposes. If you are using tax treaties to reduce taxes then thats another subject again. The days of walking away when troubles arise are almost gone… everything is recorded these days and tax penalties are retrospective. Beneficial ownership recording and tax info sharing is the norm now. If you own a company in country x as the sole owner, but you reside in country y, and if you have no economic substance in country x, then its a transparent structure and you really need to be sure about all the tax implications. Really simple things can cause headaches. For example, if your company owns a product that it sells and you want to transfer ownership of that product from one country to another then one question is, is tax applied for that transfer of property and if yes how much and how must it be reported to the tax office? These days the old flag theory is almost dead and likely to get you into hot water if economic substance is not satisfied. One option that has a lot going for it today for people who are not wealthy enough to buy a citizenship or residency package based on good tax planning is to learn all about your preferred country to operate your business and live there long enough each year to prove its your centre of business activity and home. Thats the only way I can see to get some certainty about your true tax situation, and avoid troubles later. For this you want a country that you actually like to live in, with a simplified non-complex tax system and a good number of tax treaties, and where the locals welcome foreigners. It is not uncommon for locals to be indifferent to foreigners, or worse still smiling on the face but underneath actually antagonistic. Look out for this type of scenario in countries that were colonies or otherwise were ruled by foreigners not that long ago.
You can get a 10% tax rate both corporate and personal (none on listed investment div and cap gains) and qualify almost immediately in Bulgaria. To qualify you need just to reorient your time in Bulgaria to being your main loaction of economic interest… rearrange your bank accounts and freelance sole propretorship business or corporate to be run from there. and as much as I like the climate and geography of Cyprus, there are other reasons for quality of life that make Bulgaria a better choice for me. Especially the food and drink, ladies, culture, natural beauty, etc Which at first sounds a bit strange being a person that loves to be near the sea, but thats because in South west BG Im an hour from the Pristine beaches and Crystal Clear waters of the aegean in Northern Greece… and that is real nice…