Author Topic: Most advantageous business structure for expats in Europe?  (Read 1488 times)

Gg

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Hello!

I dug around in the site hoping maybe you had an interview on this, but couldn't find anything, so fingers crossed somewhere here can point me in the right direction:

I'm looking for advice on how to set up my business structure before getting legal residency in Europe - and very happy to hire an expert to consult/help me out on this (so referrals to great consultants and welcome!).

My specific situation: I've been a digital nomad for 7 years, with two of those years being with legal residency in Switzerland. After three years away from Switzerland (with no residency anywhere), my partner and I have decided we want to live in the schengen again. It's where we feel most at home and we are tired of having to leave every 90 days.

I am not yet FI, so I will still be working. My income this year has shot upward (hoorah) and so for the first time I'll have to really understand what my options are if I go beyond the FEIE exception.

We (my partner and I - and he's got a very different business setup, so the questions are really for my situation) are currently mostly considering two scenarios:

1. Moving back to Switzerland. As I mentioned, I lived there for a couple years. I love the Alps and have some good friend connections already. Taxes are extremely reasonable for Europe (around 15%). I found Switzerland to be a lot less expensive than others say and lived solo on $2k - $2,500 per month. Now that I'm sharing rent with a partner, I expect I could stay under $2k living expenses reasonably easily.

If I move to Switzerland again, I'll be on the hook for around 15% taxes. Much more reasonable for other parts of Europe, but would be very interested in hearing from an expert if there's a way to reduce that burden further by setting up a business somewhere and paying myself a salary.

2. Moving to France. France's tax burden is much higher. However, if I could set up a business structure elsewhere and pay myself a reasonably low salary, this might be doable. Based on some quick tax calculations, a salary of 30k per year would result in about $6k of taxes. Depending on the rate of taxes on a business entity (and assuming a 30k salary is attractive enough to get me a visa), I'm thinking this might be a doable option as well. Especially since our cost of living in France is likely to be a tad lower (I'd guess, based on long stays there that my monthly expenses would fall somewhere between $1600 and $2000).

So, all this to say, I would LOVE to hear from anyone who:

1. Has a consultant they love who helped them figure out the most advantageous business structure for their EU move.

2. Has moved to Switzerland or France as a self-employed person and is willing to share how they structured their own earnings to maximize savings.

Finally, a third scenario that might play out short term would be to move to Germany for a few months (you can get a visa there without going back to the States to apply, which means we wouldn't have to risk our FEIE situation by going through a US application process and then we could apply from Germany to either France or Switzerland). I'd also be very curious to hear if anyone has done this and how you managed the tax situation of the transition.

Thank you in advance!

gocurrycracker

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Re: Most advantageous business structure for expats in Europe?
« Reply #1 on: May 23, 2019, 01:42:45 AM »
Hey Gg

Sorry, I don't know any experts to refer you to.

I don't know anything about Swiss taxes.

I have looked at France as we were considering moving to Paris for awhile.

France taxes are great for people married with 1 income or with kids, as you divide income by total family size when determining taxable income. So for us divided total income by 3, and you get fairly reasonable effective tax rates.

The social security taxes in France were a killer though, applying to all types of income from all sources worldwide. Income tax also applies to worldwide income from all sources.

The exception is if you are self-employed and plan to be in France for 2 years. Then, via the US/France SS totalization agreement, you could essentially state that you don't want to pay into the French system and you'll just continue paying into the US system.
https://www.ssa.gov/international/Agreement_Pamphlets/france.html#hi