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Before Europe gets lumped in as one country, founding a company in Netherlands and Sweden, speaking from personal experience, is a breeze. Although Sweden is a
by VadimPR 3mo ago
Before Europe gets lumped in as one country, founding a company in Netherlands and Sweden, speaking from personal experience, is a breeze.
Although Sweden is a bit strange in the fact that banks have as much equal say as the government authority does in you starting a company, and if they don't want you as a customer, they can simply deny the right for your company to start!
- whazor 3mo agoIn Germany it might be easier to open a company remotely via Estonia
- earcar 3mo agoThat way, AFAIK, the German government will determine that the "place of effective management" is Germany, and tax you also there. Double taxation is not better.
- moondowner 3mo agoDE & EE should have a double taxation agreement. https://www.fin.ee/en/double-taxation-agreements https://www.fin.ee/en/double-taxation-agreements
- ma2kx 3mo agoI would say that depends of the company's legal form. If you have an "AG" or "GmbH" you get double taxed anyway, one time the company and than again your salary. So if you have an Estonian equevilant of a GmbH/AG your company will get taxed by Estonia and your salary by Germany. The Estonian E-Residency Website at least confirms my assumption but in case of Germany I could be very well wrong of course... https://www.e-resident.gov.ee/understanding-cross-border-taxes/ https://www.e-resident.gov.ee/understanding-cross-border-tax...
- ExpertAdvisor01 3mo agoI think you misunderstood double taxation . You probably understood it as taxation on corporate and personal level. But in this context it means taxation in two jurisdiction (Estonia,Germany)
- b3orn 3mo agoYou don't get double taxed, you get taxed on your salary and your company gets taxed on whatever profit remains after paying salaries.
- notpushkin 3mo ago> So if you have an Estonian equevilant of a GmbH/AG your company will get taxed by Estonia and your salary by Germany Estonian CIT is 0%. If you pay dividends (which is not required), or if you pay director’s salary (optional if you’re a one-man company without a ton of admin), those will be taxed in Estonia. If you only pay yourself for your actual services – no taxes in Estonia. Germany might tax your Estonian company if they determine the company is a German resident. Check with your accountant. (IANAL)
- ExpertAdvisor01 3mo agoEstonia isn't 0% cit . Tax is just deferred until distribution.
- notpushkin 3mo agoTechnically yeah. But you don’t have to distribute profits, and paying yourself for your (non-admin) services is not taxed in Estonia. You might have to pay yourself a director’s salary. That would indeed be taxed at 22%, but you still only have to bill for the time you actually do admin / management work. So if you spend, say, 5 days a month on it and 15 days a month on everything else, the effective rate would work out to 5,5%. And for a single shareholder company with no employees and under 2M € annual revenue (and probably some other criteria like not having employees or veing liable for VAT or something) it is the general practice to just not pay the director’s salary at all. (This is probably a gross oversimplification, definitely ask a real accountant about the details.)
- noxvilleza 3mo agoHave multiple friends who have done an Estonian OÜ despite being primarily German. No issues on this tax side.
- ExpertAdvisor01 3mo agoIf they are still a German tax resident , they are committing tax evasion . § 1 Abs. 1 KStG
- noxvilleza 3mo agoWhat if there were multiple (2+) founders of a company, and some lived in Estonia? I think in one case they had a Croatian co-founder as well.
- ExpertAdvisor01 3mo agoThis will most likely result in Permanent establishment (PE) in Germany (e.g due to fixed place of business). That means Germany will tax the company anything which is attributable to the German guy.
- egorfine 3mo agoIt doesn't really matter. If you do business in Germany you are evading taxes just by the fact of doing business. Everything and anything you make belongs to the government. It is an unfortunate loophole in the law that temporarily permits you to steal some of your profit back from the government where it rightfully belongs. Yeah, this is sarcasm, but not really. The practical reality is that it simply makes no sense to incorporate in Germany. For example, the OP missed six months of opportunity just to please the bureaucracy and it's not even the end of it.
- ExpertAdvisor01 3mo agoIf you don't like the laws/rules then just leave Germany . There is no justification for tax evasion .
- ExpertAdvisor01 3mo agoThis is pretty bad advice as your company will be dual resident with Germany having the right to tax . That means you pay German taxes + double amount of compliance ( because you have to file everything in Germany+ Estonia ).
- dgellow 3mo agoNo, it’s generally a pretty terrible idea. Germany applies taxes based on the place where a company is managed. If you live in Germany and remotely manage your Estonian company then you’re expected to pay your corporate and other company taxes in Germany. The overhead of managing the international situation is more complicated than opening a company in Germany to be honest
- smallstepforman 3mo agoThis is insane. So I need to work 5 years on site in Germany as a contractor being paid by foreign parent company, why should the company be liable to be registered and pay taxes in germany. Eg Microsoft sends tech to fix Azure system fir Mercedes.
- dgellow 3mo agoI don’t understand your point. Are you managing the company from Germany? If you’re a contractor I don’t understand why you would be managing the company
- notanormalnerd 3mo agoYou should Google "Place of effective management" A lot of the entrepreneurs I meet become tax & social insurance fraudsters as soon as I mention this, because they think they can setup a company somewhere but live in Spain, without paying or registering companies here.
- ccozan 3mo agoyes because you are handling 100s of milions and you are some sort of public face then you get targeted. But if you are some noname making maybe up to a few mils per year income, nobody is going to chase you and prove you are avoiding local taxation. You are always "in a short holiday trip" :).
- drstewart 3mo ago[flagged]
- dwroberts 3mo agoFor one thing, it’s a geographic location and not automatically the same as the EU
- mattashii 3mo agoI don't think it's that different from pointing out that registering and/or operating a company in e.g. Delaware or Texas is a very different experience from doing so in New York.
- AussieWog93 3mo agoIt didn't actually click for me until this post that there was an actual US State called Delaware. I just thought it was a type of company.
- brookst 3mo agoSure, a Delaware Corporation, like a Long Island Iced Tea.
- dghlsakjg 3mo agoNo. No. You’re thinking of Arizona Iced Tea, which is a New York corporation.
- Aloha 3mo agoArizona Iced Tea at least nominally includes ‘tea’
- sscaryterry 3mo agoI thought tea was for the British?
- dwroberts 3mo agoYeah it’s also very easy to do in the UK. Getting a little bit more annoying year-on-year for maintenance with stuff like identity checks and software requirements for eg tax information, but still trivial to initially create
- CamouflagedKiwi 3mo agoYeah the "making tax digital" thing sucks, but there are lots of little companies that will do a simple filing for you. I hate the theory, but at least in practice it does work okay.
- ramon156 3mo agoI paid someone 100 euros for a title, i said hi, and I send quarterly 0 euro issues. That's all the effort I need to do in The Netherlands
- deleted 3mo ago[deleted]
- earcar 3mo agoThat is refreshing to hear. Unfortunately I can't get out because of exit tax, an unrealized capital gains tax for the privilege of leaving the country. That is way worse than what I mention in this post and will get its own post soon.
- ExpertAdvisor01 3mo agoYou can delay it until the disposal of your shares , if you move within the Eu
- deleted 3mo ago[deleted]
- tene80i 3mo agoYou phrase this as if it’s absurd. Why should it be possible to offshore your future capital gains without paying an exit tax? You live in a country with a tax system that assumes people pay into it.
- DANmode 3mo ago[flagged]
- munk-a 3mo agoThe premise of taxes?
- DANmode 3mo agoIf you equate (antiquated, paper-based, multi-departmental) bureaucracy with taxes, then that’s a shame.
- WarmWash 3mo agoYour question is more well formed if you challenge the premise that the tax you owe should scale linearly with the value of your assets. Obviously a business benefits from things the state provides, and the business should pay it's share to cover those costs. Maybe, honestly, even a little extra. The challenge is if someone makes a software company, and a team of 20 workers on computers create a €10B business, does the state have a fair claim to €5B of it when the company at most with the most generous possible estimate (and then double it for good measure) used €50M of state services?
- GL26 3mo agoOnce had a call with a Netherlands founder (i am european too), and told me "Declare your company in Delaware, everything will be much easier"
- markvdb 3mo agoThat could work _if_ your company has actual substance in the US. Otherwise you just expose yourself to much bigger problems.
- _zoltan_ 3mo agolike?
- carlosjobim 3mo agoSuch as?
- markvdb 3mo agoIf I set up a US llc as a Belgian while residing in Belgium, Belgian tax authorities will claim the center of control is in Belgium and claim it is a Belgian company.
- NooneAtAll3 3mo agowill they do the registration for you too?
- markvdb 3mo agoOf course not. They'll just claim your llc needs to pay local corporate income taxe, VAT, pay local social security, dividend withholding tax, ... on top of whatever needs to happen to keep US authorities happy.
- t0mas88 3mo agoSounds like bad advice. Registering a local company in the Netherlands is super simple, tax is an online portal, everyone could do it. Setting op a foreign Delaware company means you're then dealing with international tax issues. Unless you also personally relocate, then it probably makes sense.
- something765478 3mo ago> Although Sweden is a bit strange in the fact that banks have as much equal say as the government authority does in you starting a company, and if they don't want you as a customer, they can simply deny the right for your company to start! Wait, how does that work? Are you saying that if the bank doesn't like me, instead of just denying me a loan, they can convince other banks not to loan to me as well?
- badrequest 3mo agoit sounds more like they can choose not to work with you just like in America, but maybe the reasons are allowed to be more spurious
- yoavm 3mo agoIt's not about a loan. You have to put ~2,000 EUR in your company account in order to start it, and they might refuse opening an account for you. They're not going to talk with other banks, but if they have a good reason to think working with you is going to be difficult, chances are other banks will think so as well.
- KomoD 3mo agoThat's actually not the only option. You can also transfer property (apportegendom) to the company, such as vehicles, machines, patents/copyright/trademarks, real estate or pretty much anything of value, to use as your share capital. You just have to specify it when registering the company, and have an accountant certify the value. But obviously, it's more annoying and you have to keep track of depreciation.
- VadimPR 3mo agoThey can't convince others, so I shopped around until I found a willing bank. This is due to introduced KYC requirements and the harsh penalties associated with them - so banks are preferring to err on the side of caution. Same story goes for opening a personal account.
- bartread 3mo agoIn the UK it used to be one form and a fee of £25 or something like that. I think, nowadays, that's probably just done online as well.
- sscaryterry 3mo agoYep, it is straight-forward.
- VadimPR 3mo agoThe hard part, I heard, was closing a UK company!
- gwd 3mo agoThat won't get you a VAT ID, which is the key thing he says he needs to be able to bill people outside of Germany. It is significantly cheaper than 9k EUR and faster than 6 months to get in the UK, however.
- alexbilbie 3mo agoIt is free to become VAT registered and only takes a few days for the VAT number to be assigned and posted to you.
- notpushkin 3mo agoDo you really need a VAT ID though? There is the “reverse charge” mechanism, which IIRC you can use until you sell a lot in any given country. (IANAL)
- elric 3mo agoSame in Belgium. Easy peasy. Took no time at all.
- yoavm 3mo agoI've also done it both in Sweden and the Netherlands. Sweden is a breeze if you have BankID, sure (and as you said, if the bank likes you). The Netherlands wasn't exactly a breeze — I had to book a face-to-face appointment with KVK and all the slots in Amsterdam were taken, so I took the train about an hour away.
- atsjie 3mo agoI don't dislike that they at least want to see you in real life once tbh. I love ease of registration like anyone else, but with tax avoidance and all that, idk. Feels right to me to have at least seen yourself once.
- nradov 3mo agoBut is it really you?
- NooneAtAll3 3mo agothat's an interesting question how much would it cost to pay someone "1 hour away by train" to go into that office for you?
- dgellow 3mo agoWith a fake ID? That becomes pretty expensive
- jeroenhd 3mo agoSometimes criminals do put pressure on people to register companies in their name and show up to these meetings. Whether that's addicts, people with mental disabilities, or young people looking for a quick buck, the fraud mechanism is the same. However, that does put the company in their name. On paper, they have full control over it. That's a risk to the criminals trying to use the company as a financial asset for laundering money.
- eecc 3mo ago
- tdi 3mo agoSame in Poland. Almost 100% things regarding companies or personal things you can do online. Self employment company can be set even via bank app. Ltd a bit longer online (unless you need a custom ltd agreement).
- egorfine 3mo agoCan confirm. JDG registration took like a couple of days and I didn't need to get my ass off my chair.
- carlosjobim 3mo agoLegally, the banks in Sweden have no right to deny anybody as a customer. This is explicit in the law as a requirement for the bank to be covered by government depositors insurance. In practice banks will deny anybody to open an account, for no reason at all, because they are above the law in Sweden. The country has for a long time been owned by a few powerful banker families. Edit: Down voters might first want to look at Wikipedia for the Wallenberg family. This is as much part of Swedish culture as IKEA or meatballs. I challenge anybody to find a country in modern history which is more owned and controlled by bankers than Sweden.
- Chu4eeno 3mo agoDon't you have an equivalent of Økokrim? They seem to be pretty ruthless in Norway.
- xondono 3mo agoGermany, France and Spain are some of the biggest offenders here. Some years ago a case became quite famous in Spain. Someone wanted to turn a winery into a eco-tourism boutique hotel with a winery tour and experience. Should be simple in theory, in practice they were waiting for authorization to open for more than 4 years. I’ve been involved with startups and small businesses for more than a decade, and I haven’t still heard of any of them doing things 100% by the book, because it’s just impossible. People just start and hope the taxman doesn’t come.
- notanormalnerd 3mo ago> Someone wanted to turn a winery into a eco-tourism boutique hotel with a winery tour and experience. Because a agricultural business and a hotel business are two different things, and Spain has, rightfully so, their thumb on the spread of tourism, because it affects local communities negatively. Otherwise investors could just come in, buy a random agriculture business and then turn it into luxury hotels/lodging. > I’ve been involved with startups and small businesses for more than a decade, and I haven’t still heard of any of them doing things 100% by the book, because it’s just impossible. Because entrepreneurs are notoriously bad thinking further than their own interests. It always, "just" something they want to do. Zoning rules and regulations have their purpose. Are some of those in some places idiotic? Yes. Do most of them still have their reason? Also yes. Otherwise we can stop protesting datacenters and the trump family building a eco-luxury resort in a nature reserve.
- slopinthebag 3mo agoI cannot believe there are people defending this.
- notanormalnerd 3mo agoWhat? So you should just be allowed to do as you please? Start with an eco-retreat on your winery. Then build out luxury apartments? Then where to go from here? Maybe get rid of the winery for a golf course? Creep your way into a luxury resort? Where is the line?
- avhception 3mo agoTo be fair, it's also much easier to start a company in Germany if you choose a simpler legal form. It's probably still easier in the Netherlands or Sweden, but the authors pain is at least partially self-inflicted.
- throwawayffffas 3mo ago> Although Sweden is a bit strange in the fact that banks have as much equal say as the government authority does in you starting a company, and if they don't want you as a customer, they can simply deny the right for your company to start! That's true anywhere, if the banking system does not like you, you are done.