🏡 What European tax residency is most favourable for a remote worker / freelancer?

Hello Everyone,

I’m looking for advice on where to establish residency for myself, and how to legally tax optimize for my circumstances. I’m willing to relocate myself and get a residency / spend time wherever a suitable location can be found. I’m ultimately looking to invest as much as possible of my earnings, so cheap is good, but a nice location on top of that wouldn’t be bad either :wink:

I work remotely for a Scandinavian company, but get paid as a contractor charging a bit under 10.000EUR / mo + VAT, so I’m free to plan things as I like. I’m however constrained to stay in a time zone where I can be available during regular European working hours, but could potentially be fine with something outside the EU/Schengen as long as it’s not too sketchy.

What I’ve looked into so far:

Poland: Seems like a great place given that B2B contracting work can, with the right scheme as I understand it, be taxed at just a 19% flat rate with fixed, low social security cost, so you even get access to health care. I’m also seeing good opportunity to invest in real-estate here.

The low cost of living is excellent, and it’s somewhat neutral culturally for me as a Scandinavian. Things also seems fairly straight-forward to set up and hand off to a Polish accountant since it’s a popular model also for locals.

A small disadvantage is that this scheme does not allow tax deductions, but I do web dev so I don’t have too many of those anyway.

Estonia: I’m intrigued by setting up a company via e-residency here until I settle on an optimal tax situation, taking advantage of their tax on distribution rules.

Does anyone know if I can simply pay myself a salary elsewhere in Europe and not be subject to corporate tax in Estonia, or will I always be liable for at least the 20%? According to https://micropreneur.life/salaries-for-e-residents-the-ultimate-guide/ there’s no longer any hassle with board-member salaries for sole proprietors, which seems like a nice development.

Malta: Does anyone have experience with living in Malta. How much taxation can you expect to avoid? How should I set things up legally in order to take advantage of the territorial taxation in Malta?

Bulgaria: Also seems interesting. I know very little about it, and would have to hand things off to a local professional accountant. Does anyone have any numbers on how much you could expect to take home, and what the best legal structures are in Bulgaria?

Do you have any other recommendations? I’m not too experienced with running my own business yet, so as many details as possible + concrete/tested setups are super appreciated, I prefer to not get too creative :smiley:

Regards & thanks for any advice,
Philip

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Poland is going very well and investing in local properties sounds very good and not difficult. Taxes are not high but it is not a low taxation country. If you can copy with the culture and language, it sounds a good option.

Probably Malta is the best option since remittance-based taxation. A 100% legal solution is to have a Maltese company with a Cypriot holding company, corporate tax will be 5% (you pay 35% but you got back 30% after few months). Otherwise if you have a company abroad you will pay money you will take in Malta, usually 15% of taxes, but it depends on how much you will take in. However, if you company abroad is controller 100% by you, in theory the company should pay corporate tax in Malta.

I know there is a Portuguese non-dom programme, you could stay in Portugal without paying taxes.

An Estonian company has to pay 20%, but if you reinvest the profits, you pay 0%.

Cyprus, IOM, Gibraltar, you pay 0% of corporate tax, if you do not live in the country where the company is incorporated. However, you sitll have the problem that if you are the only person in significant control, you are supposed to pay the corporate tax where you live, but it depends on the country you live.

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yes Malta seems to be the best option. I have the same information from friends living there. A Maltese company with a holding company in Scotland.
Corporate tax will be 5% (you pay 35% and Malta give you back 30% ).
You can’t send the money back to Malta or you will have to pay taxes. But usually people living there use a credit card from a bank in Gibraltar.

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@angeldavid @Riccardo_Tacconi Thank you for the info. Do either of you have a recommendation on how to get in touch with someone who would know how to set things up in Malta?

I’ve had some concerns about the new EU directives that forces member countries to set up stricter CFC regulation (as described in e.g. https://www.pwc.com/mt/en/publications/tax-legal/anti-tax-avoidance-directive-november-2018.html) but it does seem like this may only apply to companies with profits a over EUR750.000, so this may not be a problem for me, but I’d definitely want some good professional advice if I were to go this route.

Philip

I was talking with
Sebastian Sauerborn sesauer@stmatthew.co.uk

You can say you come from me. he should remember me.

St Matthew Chartered Certified Accountants
Becket House
36 Old Jewry
London EC2R 8DD
http://www.steuerkanzlei.co.uk (English and German)

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Hey!

I’m residend myself in Bulgaria and I work for an accounting firm in Sofia (Adversaria).

The best legal structure in Bulgaria is to have a LTD where you pay 10% on the profits + 5% on the dividends, that’s it.
For your personal taxes (you don’t need to pay those on the company dividends) are more or less 25%.

I could be biased, but I think that is really interesting for a digital nomad to be resident in Bulgaria and overall to have a company here. The taxation is very good and the burocracy is very smooth.

I hope that helped, have a nice weekend!

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I can recommend Estonia and Poland. Now from August 2019 every young person ( up to 26 years old ) - if case of living in Poland ( polish tax residency ) - does not pay social security, healfth care and taxes up to 85,000 zł = ~ 20 000 EUR per year ( employment).

He can run the Sp. z o.o. (“LTD” company) and be employed in your company.

ESTONIA:

e-residency card + company + legal address in Estonia
but remember - salary ( grounds of employment ) should be taxed in general rule
in the place, where the work is performed - not in Estonia.

Otherwise -director;'s fee are fully taxed in ESTONIA - social security ( if you do not present A1 certificate ) and Income Tax.

The best method is not paying salary and director’s fee - acummulate profits - reinvestments and …