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Setting up shop somewhere else in the EU
60% of my income goes to taxes
shigamoto




msg:3031204
 9:25 am on Aug 2, 2006 (gmt 0)

Hello all,

this is not meant to be a rant but I need some guidelines. I'm currently living in Sweden, which has among the highest tax pressure in the world. At least 60% of my income goes to taxes and fees of different kinds. After serious calculations I figured that my business can't survive long-term in this climate, I simply get too small profit to reinvest and grow.

I'm thinking about moving or starting a business somewhere else in the EU and possibly move there, I guess it shouldn't be too hard since it at least officially is a free moving market. The countries I had in mind are Great Britain or Spain.

Is it possible to operate a business in one european country while living in another? What are my options in this area?

Appreciate any help!

 

vite_rts




msg:3031232
 10:16 am on Aug 2, 2006 (gmt 0)

You really should be talking to an accountant based in Sweden,

He/She could advise you on the tax implications of which there are many variables

Nationality

Normal residense

permanent residense

local business law

Double taxation agreements

This is a very complex question and has resulted in several legal battles, talk to a professional

vincevincevince




msg:3031238
 10:25 am on Aug 2, 2006 (gmt 0)

As vite_rts says, there are many complex variables. If you want to go the live in Sweden but based elsewhere route, that is.

If you are willing to move to the country it will be much easier and probably more effective in avoiding the Swedish tax regime.

You suggested the UK as a potential location - you might want to check up on oddsod's figures [webmasterworld.com] which show tax in the UK at over 90%.

Being from the UK as well I can agree that 60% would be a nice tax rate, all taxes told, however I do not know which taxes you are including in your 60% to get the Swedish rate.

The climate in the UK is strongly anti-startup and anti-small-business. Unless you delight in filling in thousands of forms and having absolutely no financial assistance, tax breaks or even a friendly word from the government I would suggest avoiding the UK.

I can honestly tell you that a struggling startup gets taxed from day one, whilst an unemployed layabout gets housing grants, job seeker allowances etc.

Lexur




msg:3031240
 10:27 am on Aug 2, 2006 (gmt 0)

Laws in Spain are very reasonaable in favour of non residents business.

If you want even live here you will have a "sun&fun" bonus.

Jack_Hughes




msg:3031260
 10:59 am on Aug 2, 2006 (gmt 0)

The climate in the UK is strongly anti-startup and anti-small-business. Unless you delight in filling in thousands of forms and having absolutely no financial assistance, tax breaks or even a friendly word from the government I would suggest avoiding the UK.

Oh, come on vince, don't you think you're over egging that a bit. what do you want your local civil servants to pat you on the head and say "Ohhhhhh, aren't you a clever likle entrepeneur?". Urrr, just thinking about that sends a shiver down my spine.

As for forms, which forms might they be?

As for the original question, I doubt that staying in Sweden and setting up a company abroad would help your tax rates too much. Moving elsewhere certainly would. the old eastern block countries have very favourable tax rates.

onlineleben




msg:3031466
 1:55 pm on Aug 2, 2006 (gmt 0)

I simply get too small profit to reinvest and grow

My understanding is that only profit is taxible.
If you take your income and invest it in your business, than it is a business expense that lessens the profit.
How to make investments in your business and what to buy to lessen your tax burden was discussed here quite often. A search for tax would probably come up with some good ideas.
Also check out what a tax consultant has to say about your situation.

vincevincevince




msg:3031487
 2:15 pm on Aug 2, 2006 (gmt 0)

pat you on the head and say "Ohhhhhh, aren't you a clever likle entrepeneur?". Urrr, just thinking about that sends a shiver down my spine.

Imagine one were to toss a coin one day, heads means starting up in business, tails means being unemployed and scrounging from the state. In due course one outcome would have you encouraged and supported in your chosen way of life. The other would have you cut off from sll financial support, told to take out bank loans if you need to eat and have to adapt to an enormous volume of regulation. The sad thing is I don't even need to tell you which outcome follows which choice.

Forms? Companies house (registration, changes, annual returns, accounts), Customs & Excise (VAT registration, VAT returns, EC sales lists), Inland Revenue (PAYE registration, PAYE returns, NIC registration, NIC returns, annual summary and return, student loan forms, statuatory sick payment forms, etc. etc. etc.), Data protection registration and updates, various other industry specific registration and control paperwork, etc. And that's all on top of your normal business accounts. Did I forget to mention that you have to pay to submit many of the aforementioned forms, even if your company is still a startup and you cannot even put bread on the table.

I do hope the OP hadn't started a love affair with the UK as dreams may be now in tatters :-(

shigamoto




msg:3032613
 8:23 am on Aug 3, 2006 (gmt 0)

Thanks for all the good replies. I'll see an accountant next week and sort things out. It's kinda funny about the whole UK story, overhere most people in business think that UK is much easier to operate in than Sweden, but it seems just as complicated.

Spain is a serious option for me however I don't know the language very well.. But It can't be too hard to learn can it? :)Anyway thanks for all the tips, gave perspective on things!

etechsupport




msg:3034134
 11:43 am on Aug 4, 2006 (gmt 0)

I would suggest to make a tour to that place before you finally shift your business.

FourDegreez




msg:3034166
 12:43 pm on Aug 4, 2006 (gmt 0)

How about Bermuda? Many US companies have moved there due to the tax advantage. It's a British colony where English is spoken, and has one of the highest per capita earnings in the world. Real estate ain't cheap, though.

Alex_Miles




msg:3034234
 1:50 pm on Aug 4, 2006 (gmt 0)

Don't come to the UK.

Taxes turn out to be > 80% when you take into account VAT, car, property tax and the many and various taxes there are on businesses.

Health care is theoretically free but in practice its worse than the US. At least in the US when you pay for healthcare you might get it sometimes.

Schools can't turn out literate students, property is unnaffordable, heating your home in winter is not possible if you insist on eating as well, and pension funds keep vanishing into black holes.

Your street is likely to be flooded at the exact same time there is a hosepipe ban because the water companies are all on short-term contracts - same for rail. No one can invest in the infrastructure because its not profitable.

A quarter of the population are thinking of emigrating, and the other three quarters just gave up hope of ever raising the airfare.

If I were you I'd consider Beiruit before I'd consider the United Kingdom.

You might like Spain too - a lot of Brits end up there.

I like the US best, because its cheap and the natives are positive in outlook. I can get my hair done for $15 there instead of $150 here, even though it might mean a lot of pointing at pictures because I don't speak enough Spanish.

[edited by: Alex_Miles at 1:56 pm (utc) on Aug. 4, 2006]

vite_rts




msg:3034431
 4:02 pm on Aug 4, 2006 (gmt 0)

I really don't recognise the Britain Alex over there is talking about

Jack_Hughes




msg:3038360
 10:19 am on Aug 8, 2006 (gmt 0)

geese alex, the positive outlook doesn't seem to have rubbed off on you much :)

as for $15 haircut, gee that's a lot. I used to pay no more than $9 at vincents, my local friendly barber. I'm no fashion horse though. though now I just shave all of my hair off with a set of clippers bought for the princely sum of 9.

vincevincevince




msg:3038377
 10:42 am on Aug 8, 2006 (gmt 0)

I'm sorry to say that Alex is pretty much spot-on with his information. Especially regarding healthcare and schools. The whole of the public sector has lost the drive for raw untamed world-class excellence and has become content to be just 'good enough'.

You can have as much of a positive attitude about the country as you like but when it comes to recommending (or not recommending) someone move there and try to start up in business it's time to allow honesty to trump optimism. No, it's not a good country to live in unless you fit into a middle-income 9-5 long-term employment suburban living pattern.

Alex_Miles




msg:3038446
 12:16 pm on Aug 8, 2006 (gmt 0)

I really don't recognise the Britain Alex over there is talking about

Its the one you don't see in the tourist ads.

I've lived over the world. I've seen how other cultures do things in every continent except Africa. I've learned their languages, I've dated their natives.

I'm not in Japan because its too conformist. I'm not in Russia because its not finished. I'm not in Australia or Spain because its way too sunny for my delicate caucasian skin. I'm not in Switzerland because its designed for trams not people and I'm not in Italy because the reliance on 'family' instead of government makes me queasy.

If you don't mind being internationally revilled, the US really is best. Its big enough to get lost in, cheap enough to live in, theres a range of climates to suit everyone, they know when to tell their elected officials to get stuffed, even corporate crooks sometimes get rounded up, and best of all - you can shoot anyone who breaks into your house and you don't have to carry ID.

TomJ




msg:3038506
 1:24 pm on Aug 8, 2006 (gmt 0)

anywhere to find official or semi official stats on countries tax rates etc....quality of living etc?

T

vite_rts




msg:3038520
 1:36 pm on Aug 8, 2006 (gmt 0)

Most people actually think the UK & Europe are great places to like right now, an the UK probably strikes the best balance ,between the ideologies of US an Europe,

vincevincevince




msg:3038615
 2:39 pm on Aug 8, 2006 (gmt 0)

I wonder if shigamoto has considered Eire

guru5571




msg:3039695
 9:22 am on Aug 9, 2006 (gmt 0)

Channel Islands and Isle of Man are tax free. Very entrepreneur friendly, but probably not too exciting. Also check out Gibraltar which is right down the road from the costa del sol (lots of brits and swedes there).
Then of course there is Switzerland (not EU) Luxembourg and few other places scattered around.

heathmont




msg:3051001
 3:41 am on Aug 18, 2006 (gmt 0)

estonia - no company tax on revenue, only on dividends. brilliant IT infrastructure, highly skilled labour, cheap place to live and beautiful women!

devildude8989




msg:3052558
 9:03 am on Aug 19, 2006 (gmt 0)

BVI (Virgin Islands) is very popular right now.

percentages




msg:3054087
 6:52 am on Aug 21, 2006 (gmt 0)

If you make USD $1 million+ profit per year then it is time to separate yourself from your business.

Rule 1: Live in a place that you like, you have earned it, and can surely afford it! At this level of income anywhere on the globe is possible, including Monaco, which is a personal favorite of mine.

Rule 2: Keep you and your business very separate. Talk to an accountant, or several, until you find one that explains how to do this.

Rule 3: Never let your companies get cash rich! Milk them all the time. Store the milk in a separate entity (trust) that can't be touched by usual commercial means.

Rule 4: Avoid fame at all costs. Attracting attention is a very bad thing. Last thing you need is some journalist wanting to print your "success story".

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