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Temporarily Move from EU to another Country [LLC]

drain

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drainNew MemberAuthor
Joined
Oct 2024
Messages
14

#1

Hello!

I live in the EU (Austria) and have a company there (LLC equivalent in my country). I expect about $4M net sales and $1.5-2M USD profit before tax in 2025. I have a small private crypto portfolio (tax office is aware of it) and an apartment in my country which I use. I am not married and I do not have children.

My goal is to temporarily move abroad to (1 year, but with few visits back to home country):

  1. Pay less tax (23 % tax on profits + 27.5 % tax on dividends in my home country)
  2. Have better privacy (though this is not the focus of this thread)

As of now, I can not imagine moving abroad for a longer period. I would like to spend 6-12 months somewhere else and pay less tax for 1 year and then probably come back (unless I like it more abroad, but dont know for now).

I've already spoken with my local tax advisor. They told me:

  1. I would need to gift (tax free) my crypto portfolio and LLC shares to my family. Otherwise, exit-tax would be triggered.
  2. I would need to lend my real estate to family and I must not have access to it anymore. Otherwise, local tax office would see it as sort of tax residency.
  3. Because of point 1 and 2 they would not recommend my plan (incorporating a company abroad and moving there for 1 year to save tax) because the tax office would see all the measurements as "fishy" and probably tax me as well as the company abroad. It would be easier when I move permanently probably.

Options I was thinking moving to:

  1. Preferably Dubai (Austria and UAE have a double-taxation-agreement). One other non-local tax advisor told me I would not even have to cancel my apartment because of the DTA, but my local tax advisor did not say so.
  2. Cyprus/ Malta (would be in EU)
  3. Switzerland
  4. ???

Another option would be creating real substance in another country (office + director + employee) and live off dividends. But still, I would have to pay dividend tax in my home country afaik and I am not sure whether this would be profitable at $1.5-2M USD profit.

What do you think? Does anyone have experience with temporary stays abroad and tax implications? Would I really have to move abroad for several years to make sure my local tax office does not identify me or my company abroad as tax resident anymore?

Thank you for your help!

SolsOffshoreCorpTalk moderator
Joined
May 2019
Messages
6,542

#2

Your tax advisor is right. This oozes of tax evasion. In general, temporary residences (those less than 1””2 years) can be and do get called into questions by aggressive countries such as Austria. They'll argue you didn't sufficiently sever your ties to Austria. Maybe you did and maybe you won't owe tax, but you might be up for a months or years long fight with the tax authority.

Furthermore, if this means that you have an apartment in Austria:

drain said:

I have [snip] an apartment in my country which I use.

...and if you will continue to own/rent that apartment while you live abroad, there's a risk that the tax authority considers you tax resident of Austria by way of having a place to stay in Austria.

drain said:

Another option would be creating real substance in another country (office + director + employee) and live off dividends. But still, I would have to pay dividend tax in my home country afaik and I am not sure whether this would be profitable at $1.5-2M USD profit.

This could work. What's the rush with taking out all the dividends? You can set up a genuine substance somewhere cheap and low/zero tax, have the company make a profit, and at the same time you move abroad to for example Cyprus, Malta, UAE, or some other tax friendly place. Take out your dividends. Stick around for 2””3 years. Then you can move back to Austria. If you want to. Maybe you like it abroad?

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