Frequently Asked Questions

You qualify under the 60-day rule if you: (1) spend at least 60 days in Cyprus in a tax year, (2) are not tax resident in any other country, (3) are not present in any single country for more than 183 days, and (4) maintain a residence (owned or rented) and have a business/employment connection in Cyprus. Alternatively, 183+ days automatically qualifies you.

Under the non-dom structure via a foreign LLC (e.g. US LLC), the effective rate is approximately 1.9%: €4,770 GESY health contribution + no income tax on foreign-sourced income. Using a Cyprus Ltd + non-dom, you pay 12.5% corporate tax on Cyprus-source profits + GESY, bringing it to ~6–8% all-in depending on entity setup.

Legally, yes — if you establish genuine tax residency in a territorial or zero-tax jurisdiction. Georgia's Virtual Zone offers 0% CIT on foreign IT services. UAE has 0% personal income tax (requires active residency permit + 183+ days). Paraguay offers territorial taxation with minimal substance requirements. Important: your home country exit tax and CRS reporting still apply.

The 183-day rule is the most common threshold for establishing tax residency: spending more than 183 days in a calendar year in a country typically makes you tax resident there. However, many countries have additional triggers — Cyprus has the 60-day rule, Germany can claim residency based on "habitual abode" even below 183 days, and some countries use a different threshold entirely.

Wegzugsteuer (exit tax, §6 AStG) applies only if you: held at least 1% in a corporation AND were a German tax resident for at least 10 years. It taxes unrealised capital gains on your shareholding at departure. Moving within the EU/EEA allows you to apply for deferral without interest. Moving to a non-EU country triggers immediate payment. If you don't meet both conditions, it does not apply.

You must formally deregister (Abmeldung) in Germany and establish genuine residency abroad. Germany can still claim your residency if you maintain a habitual abode there — so you typically need to give up your apartment and spend under 183 days in Germany per year. Germany applies a worldwide income principle for tax residents, so overlapping residency is costly. A tax treaty tie-breaker analysis is recommended.

Yes — a single-member US LLC (e.g. Wyoming or Delaware) is tax-transparent in the US, meaning the US only taxes US-source income. From a European perspective, income flows to you personally and is taxable where you are resident. This makes it highly compatible with non-dom regimes like Cyprus (foreign income, not remitted, is tax-exempt) and territorial regimes. It does not create a corporate tax layer.

Cyprus non-dom: dividends and passive income from foreign sources are exempt from the Special Defence Contribution (SDC). You pay only 2.65% GESY on foreign dividends up to €180k cap. Malta non-dom: foreign income is only taxable if remitted to Malta. You pay a minimum €5,000 flat charge annually. Malta banking is significantly harder (3–6+ months) and compliance costs are higher than Cyprus.

CRS (Common Reporting Standard) means your bank automatically reports your account balances, interest, and income to your country of tax residency. This includes accounts held by companies where you are the beneficial owner. There is no legal way to avoid CRS reporting if you bank in a participating country (100+). Proper tax residency establishment is the only compliant path — not offshore banking secrecy.

For a SaaS founder, Cyprus Ltd + non-dom is often the top pick: 12.5% CIT on Cyprus-source profits, 0% on foreign dividends, EU jurisdiction, strong double-tax treaty network. Georgia Virtual Zone offers 0% CIT for IT companies serving foreign clients. Bulgaria EOOD at ~14.5% all-in is the lowest-cost EU option with simple accounting. UAE (if permit is available) is 0% but requires physical presence and has banking complexity.

Cyprus Ltd incorporation: 10–15 business days typically. All-in Year 1 costs including nominee director, registered office, accounting setup, and the €350 annual levy run €4,000–6,000. A non-dom permit application takes 4–8 weeks. The full process from arrival to operational banking can take 6–10 weeks depending on the bank.

The Georgian Virtual Zone (VZ) is a special status for IT companies that deliver services exclusively to foreign clients. VZ companies pay 0% corporate income tax on qualifying foreign-source revenue. The owner's salary is still subject to 20% flat PIT if paid in Georgia. Formation costs are low (~$500–$1,000), and the regime is straightforward with minimal substance requirements.

No. Bulgaria taxes worldwide income for tax residents. However, the rates are among Europe's lowest: 10% corporate tax (EOOD company) + 5% dividend withholding, or ~11.25% for sole traders (ET). The combination makes Bulgaria one of the most tax-efficient EU jurisdictions for active business income, even without a territorial system.

Cyprus does not have mandatory substance requirements for all companies, but OECD BEPS rules and the Cyprus Tax Authority recommend: at least one local director (or nominee), board meetings held in Cyprus, and genuine management and control decisions made in Cyprus. For holding companies or IP structures, formal substance requirements under ATAD 3 / shell company directives are increasing across the EU.