[SpursFan741]

Hey Guys,

I have the following question: What is the best country to register / start your own business in Europe? ( tax paradises , ease of doing business, English spoken). I would like to register a sole proprietorship.

My business is currently registered in my home country in Western Europe and it's like suicide. ( taxes are insane , i need to pay social contributions every 3 months which are about 900 USD, bookkeepers here costing me a lot of money , start up costs are too high as well).

I have A european passport. I've heard good things about Estonia, Ireland and Bulgaria , who registered their business there before? Outside Europe is also an option but bare in mind I don't have any money to invest( maximum a few 1000 euros) .

The goal would be to just register it there and pay taxes there but not live there .

Any info is appreciated.

[Ethan Hunt]

Estonia. Zero corporation tax but you'd pay tax on dividends.

Jersey/Guernsey. Zero corporation tax (depending what you do) although you might need connection to the islands.

Gibraltar. 10% corporation tax.

Never registered a company outside of my own country though so I can't tell you about the processes or other things to consider.

[stefpdt]

I'm also curious about this.

So far, I've noticed that the Baltic states are some of the most business-friendly countries in Europe.

So you have Estonia, Latvia and Lithuania.

I know that Estonia and Latvia are popular locations for registering businesses & declaring tax residency - not so sure about Lithuania.

(Please check with an attorney for actual advice though.)

[Johnnyvee]

(04-16-2018 09:30 AM)SpursFan741 Wrote:  

Hey Guys,

I have the following question: What is the best country to register / start your own business in Europe? ( tax paradises , ease of doing business, English spoken). I would like to register a sole proprietorship.

My business is currently registered in my home country in Western Europe and it's like suicide. ( taxes are insane , i need to pay social contributions every 3 months which are about 900 USD, bookkeepers here costing me a lot of money , start up costs are too high as well).

I have A european passport. I've heard good things about Estonia, Ireland and Bulgaria , who registered their business there before? Outside Europe is also an option but bare in mind I don't have any money to invest( maximum a few 1000 euros) .

The goal would be to just register it there and pay taxes there but not live there .

Any info is appreciated.

Probably Bulgaria.

Flat 10 percent corporate tax. (Same for income tax.)
Safe country for the most part, good highway system etc.
English skills are acceptable for most in the under 35 group.
https://europa.eu/youreurope/citizens/wo...dex_en.htm

But international tax law dictates that you have to pay tax to the country that is the base of your operations, disregarding whether you`re income is derived from other countries or not. So in practical terms, to get any tax benefits you must live in the tax friendly country for a minimum of 183 days during a tax year. I don`t know of any exceptions to this rule, but I`m not an expert on international tax law either.

[Ski pro]

Switzerland is pretty straightforward and low tax in certain cantons. However costs of bookkeepers etc is high.

You would also need a local Swiss or foreigner with the correct work permit to set up a business here. I woukd help you but you're a spurs fan

I realise this probably hasn't helped much but if you are considering Switzerland, pm me.

[Handsome Creepy Eel]

The official tax rate itself doesn't matter so much as whether the country places a hidden tax on you in the form of mandatory pension/health contributions. In Croatia, for example, they are very high and you have to pay them automatically every month (plus a tax advance which is paid ahead of time based on an estimate!), regardless of whether your business has any profit or even revenue. It's basically a tax on existence. This makes some countries horrible choices despite all sorts of subsidies or business friendly laws.

[stefpdt]

(04-18-2018 11:52 PM)Handsome Creepy Eel Wrote:  

The official tax rate itself doesn't matter so much as whether the country places a hidden tax on you in the form of mandatory pension/health contributions. In Croatia, for example, they are very high and you have to pay them automatically every month (plus a tax advance which is paid ahead of time based on an estimate!), regardless of whether your business has any profit or even revenue. It's basically a tax on existence. This makes some countries horrible choices despite all sorts of subsidies or business friendly laws.

Yup. This is why the "corporate tax rate" is the least of your worries when you're doing business in Europe.

You have to look at all of the country's tax policies, their banking system, access to lines of credit, etc. You might even have to consider a country's VAT if you're selling consumer products.

Again, I'm not an accountant/attorney, and I know very little about European taxation. But I'm researching this area heavily because I'm strongly considering launching another business (this time in Europe). I will definitely talk to a European tax attorney because of how important your business' structure is in Europe.

Here's a pro tip: Start looking at companies in your industry (competitors) and snoop around. See where they registered their business. Where are their offices located? Company headquarters?

Right now, a number of cryptocurrency companies are moving to Malta because of the lax gaming regulations in the country.

But would you register an e-commerce company in Malta? Probably not. The UK, France, and Germany are the three biggest e-commerce markets in Europe, so these countries naturally attract a lot of entrepreneurs.

What I'm saying is there are just way too many factors to take into consideration. You have to talk with a good attorney who knows your industry.

[bigswingingdick]

You need to create the company where it operates. If you don’t want to be taxed there you need a parent company holding where to send income to. The parent company will forward you the income. So you also need to evaluate according to your country of residence the double tax treaty with the country of the holding.

You should probably take into consideration where is the tax department less agressive.

Generally speaking people open companies in Malta, Ireland, Luxembourg, Holland.

But inside each tax system there are loopholes you won´t find in a google search. But you will need to take into consideration your industry.

This is a broad opinion.

[asdfk]

I have opened a company in a country with very low taxes. The process was easy. I can't post where and how due to privacy concerns, but vetted members (rep points) can send me a PM if they want to know where the process is easy and cheap.

[bigswingingdick]

Cyprus is also corporate friendly country.

The place of effective/central management/permanent establishment is where you will be taxed if there´s any paper trail. It doesn´t matter if you incorporate in A,B or C country. For the tax department it´s where your business is conducted. If your business effectively operates in a high taxation country it will be taxed there. The test to know if you have a permanent establishment varies from country.
Generally the test is made by the bank account of the company and it´s statements. Bank accounts secrecy are consistently being broken by tax bullies. And from there they get the entire history of your activities. Unless you deal with cash. But since cash is being banned. Your bank account must comply with your tax info.

Even in the US it´s the same. Between states. Heard recently the father in law of a friend of mine. Not companies but individual residency. They nailed him. He had tax residency in one state and lived in another. A lot of fines.

With the level of info the tax departments have it´s really difficult for you not to get caught. Unless you live a James Bond life. Or your earnings are irrelevant. You will have issues.

We are in the highest level of taxation in western history and at the same time probably the highest level of compliance which means there was probably never a time in history in free nations where so much tax have been effectively paid. Not only taxes have gone up. But the level of tax evasion have never been lower. This to me sounds like communism filth. And one of the reasons why the west is being deliberately broken. Except for Trump.

[Tiger Man]

Along with a relatively good tax system, Estonia also has the e-Residency program.

https://e-resident.gov.ee/ <- Estonian Gov Site (FYI)

So, you wouldn't have to constantly travel back and forth to manage your affairs.

Ireland is good for a patina of credibility.

Malta is good for flying under the radar.

If you really wanted a solid EU tax solution, you have to look at something like the Double Irish with a Dutch Sandwich solution, and they are starting to crack down on even the biggest companies doing that.

If you still plan on living in the EU, you are going to be looking at VAT, MOSS, and intra-country settlement programs.

Also, it is key to mention that sole proprietorships do not offer the legal separation of most other legal entities. So, you do not have to concern yourself with piercing the corporate veil, as you already have. That is not a good thing.

If I was in your situation, I would do one of two things. Use <1000 euros to solicit advice from someone at EY (EU) or another big firm that helps their clients avoid taxes all day. You won't get a tailored package, but they will point you in the right direction. Or, consider the option of legal residence "exile". That is, re-domicile yourself in a "tax neutral" country like the Bahamas. You could still spend most, or all, of your time in Europe and you can negate many of the tax problems we are discussing here. It isn't necessarily the case that re-domiciling yourself costs thousands and thousands of dollars/euros. But, again, I would go with a professional on this.

[slowpoke]

(04-19-2018 02:08 PM)bigswingingdick Wrote:  

Cyprus is also corporate friendly country.

I'm sure the citizens living there thought it was pretty friendly until they had money confiscated from their bank accounts

[randomA]

Cyprus somehow will give a bad rep to your company, if people see it's registered there.

I thought Malta would be a decent option, but after reading some comments on this thread.. who knows.

Luxembourg is my other choice.

Or pay some entry professional fees to register in Jersey/Guernsey and park it there. I guess you'll save later on.

[H1N1]

If you are not UK resident then basing your company in the UK is a no brainer.

The UK is a tax haven for everyone but its citizens. It has probably the finest and most settled legal system in the world, meaning access to justice and litigation you can understand. It is non-beaurocratic - this is a huge positive. All other European countries are endlessly bureaucratic because their citizens are inclined to flout every rule, leading to an interminable, unpredictable, frustrating and somewhat arbitrary legal ambience.

Setting up a UK company is dead easy, can be done online, and costs £13. That's it - no 'local partners', lawyers, accountants etc. You can go online and be operational in a morning. There is nowhere, not even the most favourable jurisdiction in the US (maybe Wyoming or Delaware), that is anything like as cost effective and red-tape-free as the uk. You pay about £18/year to file your annual return, and other than that need not incur ANY fees. The first £300k of profit you make is taxed at 20% corporation tax - if you really have to make a profit at all. I was able to set up a UK company for a US business I've been working with, with a registered address etc, inside a morning. I just did it as a favour because these guys were talking about hiring lawyers and accountants and all sorts (the expensive kind too) to get it set up.

[Prince Charming]

cyprus is tax free. I got my llc in british virgin islands though

[AceP]

@OP May I ask what sort of business are you running? I am not sure what advice I can give you, I do not know if you need to sell to the population or it's an online business thing.

But I'd consider Bulgaria as a good entry-point to Europe. They also have a 5year (I think) path to citizenship. And 10% flat tax. overall worth it

[randomA]

(05-16-2018 05:47 AM)H1N1 Wrote:  

If you are not UK resident then basing your company in the UK is a no brainer.

The UK is a tax haven for everyone but its citizens. It has probably the finest and most settled legal system in the world, meaning access to justice and litigation you can understand. It is non-beaurocratic - this is a huge positive. All other European countries are endlessly bureaucratic because their citizens are inclined to flout every rule, leading to an interminable, unpredictable, frustrating and somewhat arbitrary legal ambience.

Setting up a UK company is dead easy, can be done online, and costs £13. That's it - no 'local partners', lawyers, accountants etc. You can go online and be operational in a morning. There is nowhere, not even the most favourable jurisdiction in the US (maybe Wyoming or Delaware), that is anything like as cost effective and red-tape-free as the uk. You pay about £18/year to file your annual return, and other than that need not incur ANY fees. The first £300k of profit you make is taxed at 20% corporation tax - if you really have to make a profit at all. I was able to set up a UK company for a US business I've been working with, with a registered address etc, inside a morning. I just did it as a favour because these guys were talking about hiring lawyers and accountants and all sorts (the expensive kind too) to get it set up.

Ohh this is so sweet and true.

As part of my job, we have set up hundreds of UK shell companies. I'm talking about ~30 each batch and they would all be incorporated immediately. Once the initial fee is paid, leaving them with no active business is almost completely free besides paying for a cheap yearly AR.
Somehow it's really hassle free.

[Tiger Man]

The posters talking about a UK company might have it sold. The US has a similar setup to the UK as far as withholding and unrealized income go, as well, if that is a concern.

I just thought I should mention, as you brought up the idea of maintaining a front of respectability, that you can use a mailing address in almost any country in the world to accomplish that. NB - There have been some very crazy tax court decisions in places like Canada, in which the court deemed that having a mail receiving address in a place like Toronto established domicile, so you might want to avoid Canada/AUS/Maybe the US. But, you could incorporate in your chosen tax haven or tax-friendly jurisdiction, then just use Regus or another company (or a lawyer or accountant or CMRA) as your businesses "address" on invoices and official paperwork. If you draft contracts, retainer agreements, or anything like that, you can simply add a clause referencing the address as a mail receiving address and directing your clients or customers to send all business related correspondence there.

I am a bit curious, as are other posters, to the exact nature of your business. But if it is internet based or consulting or anything like that, I can think of twenty or thirty men I know who use the above tactic to both lower their tax burden and appear to be based in New York or London or Berlin (etc.).

[SpursFan741]

It is a dropshipping business / freelance business ( mostly customer service) . The goal is to live in Asia / Latin America. I Only would be in my registered country for a few weeks a year. I also will need to deregister myself in my home country. ( If I do this, can I easily apply again for a Passport from my home country in the future even i deregistered myself?)

I will deeply research Bulgaria, Luxembourg, Gibraltar and Malta. I'd prefer to stay away from the UK ( due to the brexit, rules will change in the upcoming years for other european citizens who want to work or register their business in the UK IMO).

[randomA]

(05-18-2018 04:09 AM)SpursFan741 Wrote:  

I also will need to deregister myself in my home country. ( If I do this, can I easily apply again for a Passport from my home country in the future even i deregistered myself?)

changing residency does not mean you will lose your citizenship.
if you are asking about renewing your passport, you can just register your personal residence in the new country and go to your own country's embassy in the place youre living to do so.

[AceP]

Another good option: I'd recommend Hungary

With a 9% cooperate tax it is one of the lowest in all of Europe. They have a 300.000 euro government investment bond for PR or Citizenship. Unfortunately the program has expired but you can still do business there.