What's your tax setup?
I'm thinking about starting traveling and I've started to dive into the DN tax rabbit hole. There are so many options, not sure where to start.
What's your tax setup?
Are you an employee, sole entrepreneur or do you have a company?
Where's your company's tax residency and where's your personal tax residency?
Complex topic which depends heavily on your specific situation. If you're from US then you're screwed. You can stop reading here :)
What I mean by that is based on your citizenship you need to figure out your tax situation. Are you taxed on world income (like US for example), are there exceptions to the rules like in the EU (only pay tax on world income if you're in the country more than 6months + 1day).
Then you need to figure out where you need to pay your income tax. This again depends on the countries you will be staying while getting income.
And last but not least, tax on your salary. Again depends on the country where your company is based. There are countries which do not tax you if you don't live in the country. One such example would be if you're a Hong Kong company owner. As you will not live there you don't pay tax on your salary for example. But bare in mind and running a company by it self costs money. For HK company depends on your company income and can be 2000+ EUR per year even as a fresh start-up :)
"Complex topic which depends heavily on your specific situation."
Exactly! That's why I'm asking :) Hoping to get inspired by other people's setup.
I'm EU citizen. I don't mind paying taxes when my company earns a lot. But at the beginning when I don't earn anything yet I would like to find some cheap solution in terms of both setup fees and taxes.
Extra advice(s) I can give you is:
Almost everywhere you will have to pay tax on company profit. In HK that is 8.25% and 2x that if you're above 2,000,000 HKD. But your first tax year can be up to 18 months long. And you get to choose what month will your tax year end.
There is no cheap solution in terms of setup fees and taxes. But looks from the bright side. You will pay some, but still much less than in EU :)
Thanks!
I've already quit my job, so too late on that one 😁
So the options popular with indie hackers / digital nomads like Delware/Wyoming LLC or Estonian e-residency are not actually cheaper?
Can not comment on those two as I did not use them. Only speaking from experience as I have a HK company as a EU citizen and I live in Asia since 2018 :)