If you're wealthy enough to consider a flat tax of €100k/year a good deal, there are a number of alternative countries around the world that seem more interesting. If I recall correctly, Monaco next door "only" requires buying a flat at minimum €1.5M and open a local bank account with minimum €500k to become a tax free resident. But the list is rather long of alternative tax havens.
Latvia copied Estonia's 0% tax system, but what are the differences?
- Thread starter momentum8778
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If you really study Monaco you will never go there. I have friends who went there. If you compare the living cost in Monaco with Italy, Monaco will lose. My friends were there working for a bank. After 1 year they asked to return to their native country.
In Monaco you cannot buy a house with a few acres of land. For the price of a Monegask three room flat, you can buy in Italy a seafront villa five times bigger than the flat and with at least 1 ha of land. You can have a swimming pool, which in Monaco is impossible or will cost you millions of euros.
Monaco is propped up with buildings, almost no nature at all. Italy is cheaper, even by paying 100K a year. For that amount you can only rent a small1 room flat in Monaco.
Quality of life in Italy is ten times better than in Monaco.
Worldchampion F1, Max Verstappen lives in Monaco. He has an income (50 million a year) that is multiple times bigger than mine. Yet he lives in a flat, while you can have a villa four times bigger in size, with swimming pool on the border of the mediterranean sea.
In Europe Italy is the cheapest solution, also considering the quality of life, and the distance to my native country where my children live.
Flats in Monaco: successful traders will never go live on100 sqm flats.
Eden Star 78 sqm 2 rooms 4.4 million Euro.
Fontveille 92 sqm 3 rooms 4 million Euro.
Moneghetti 225 sqm 4 rooms 11.5 million Euro.
Patio Palace 209 sqm (living area only 173 sqm, terrace 52 sqm) 4 rooms 7.5 million Euro. These two flat are much smaller than villas in Italy, and have no garden or swimming pool. And the price is more than 4 to 6 times higher than the price you pay in Italy for that villa.
Renting in Monaco for a 3 room flat goes from 15K till 70K a month.
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I don't recommend living in Monaco (I'm familiar with the city state) but being a resident there has clear fiscal advantages. There are other places, like several Caribbean islands, Southeast Asia like Singapore or Malaysia or in Europe like Malta, Switzerland, Luxembourg or even the Netherlands and more recently Montenegro.
But Italy's nice!
I didn't pay any salary but that was some years ago. I had an LLC only used for trading, no business activity otherwise.
But there have been cases where the tax authority has been disliking companies that don't pay any salaries and owners only withdraw profits as dividends. Mind you, some people pushed this to the limit and withdrew as dividends monthly for living expenses. There was a court case on only receiving dividends w/o a salary some time ago and the tax authority lost, the person didn't have to pay himself a salary. That said, things change quickly and to be up to date on it you'd need to consult a tax lawyer.
In any case, you'd be paying the minimum salary which is around 500eur I believe. You don't need to pay yourself anything more than that and I'm amazed how some countries can even try to force people to pay anything above this.
Again, my information on Latvia is dated but last I heard filing there still involved some paperwork.
Estonian filing is done online and if you're familiar with it and have all your numbers then it won't take more than 20-30 minutes. I've been doing an empty filing for the past years and it takes me about 10 minutes.
I filed annually only but I was just below 500k. There's no obligation to file monthly or quarterly AFAIK. I also did not report individual trades but profits/losses only. This is one of the reasons to do it via the LLC, individuals should submit all transactions.
I might be biased but there's not much difference in the cities. Tallinn is smaller but I'd argue a bit more international and northern while Riga has better airline connections and a more central European feel. Tallinn feels bigger than it is by numbers IMHO.
The Netherlands is completelly finished. They are taxing box 3 in a different, more expensive way now, as an intermediate solution, but in 2026 you will pay on the full profits. Around 34% on the real profits.
I had already a few years ago confirmation that, as a daytrader or an active trader your income is taxed in Box 1. This activity is not "assets", but "commercial activity" according to the Dutch tax authorities.
d08, thank you for your local insights into Estonia. I am impressed the bureaucracy in Estonia is so efficient an active trader is able to self prepare taxes.
Is your setup an OÜ ? I searched for the word "tech" in the official business register and picked some random companies to look at. I was able to see the owner's name, personal ID number, share capital, annual reports, and much more. In some cases, they were foreigners, I saw a birthday instead of ID #.
Should I open an LLC, would the Kokku varad/"assets" listed in the annual report be the size of my trading account?
There was a recent pro-privacy ruling in the EU to limit access personal data in the business register. Has this affected Estonia's policy at all? The biggest negative of moving to Latvia/Estonia for me is the lack of privacy for the otherwise very compelling 0-25% LLC.
https://www.vistra.com/insights/ecj...nformation-balancing-transparency-and-privacy
Is your setup an OÜ ? I searched for the word "tech" in the official business register and picked some random companies to look at. I was able to see the owner's name, personal ID number, share capital, annual reports, and much more. In some cases, they were foreigners, I saw a birthday instead of ID #.
Should I open an LLC, would the Kokku varad/"assets" listed in the annual report be the size of my trading account?
There was a recent pro-privacy ruling in the EU to limit access personal data in the business register. Has this affected Estonia's policy at all? The biggest negative of moving to Latvia/Estonia for me is the lack of privacy for the otherwise very compelling 0-25% LLC.
https://www.vistra.com/insights/ecj...nformation-balancing-transparency-and-privacy
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Lowest tax rates for active trading, all on a personal account except for Latvia / Estonia.
What I've compiled so far:
Bulgaria: 0% - 15%
If trades on made on EU/US/AU exchanges 0%, but beware, the law is vague and contradictory. Not even lawyers, or the staff at the tax authority know for sure.
Romania: 10%
Simple flat tax
Moldova: 6% or 12%
Still trying to confirm if active trading profits are counted as PIT, then it would be a flat 12%
Cyprus: ~0.01% to 2.65%
The law is very clear, 0% tax on trading
Only pay 2.65 healthcare tax, base capped at 180K
Andorra: 0% equities, 10% derivatives
Pay to play. Must invest 800K EUR (as of 2023) in a property to obtain residence
Another option is to form a company, pay a 50K bond, and lease an apartment/house and real office
For a middle class life expect to spend 4K per month on housing and living expenses
Estonia & Latvia: 0% on profits, 25% on dividends
Must form an LLC, which is not private. As far as I can tell, everyone will know your name, account size, and profits
Very low effective rate if your profits are much larger than your living expenses.
Everywhere else in Europe is over 19%.
What I've compiled so far:
Bulgaria: 0% - 15%
If trades on made on EU/US/AU exchanges 0%, but beware, the law is vague and contradictory. Not even lawyers, or the staff at the tax authority know for sure.
Romania: 10%
Simple flat tax
Moldova: 6% or 12%
Still trying to confirm if active trading profits are counted as PIT, then it would be a flat 12%
Cyprus: ~0.01% to 2.65%
The law is very clear, 0% tax on trading
Only pay 2.65 healthcare tax, base capped at 180K
Andorra: 0% equities, 10% derivatives
Pay to play. Must invest 800K EUR (as of 2023) in a property to obtain residence
Another option is to form a company, pay a 50K bond, and lease an apartment/house and real office
For a middle class life expect to spend 4K per month on housing and living expenses
Estonia & Latvia: 0% on profits, 25% on dividends
Must form an LLC, which is not private. As far as I can tell, everyone will know your name, account size, and profits
Very low effective rate if your profits are much larger than your living expenses.
Everywhere else in Europe is over 19%.
There are several more in Europe alone. But it's a bit ridiculous to simply focus on capital gains taxation, unless it's just for shits and giggles. Even within the more reasonable countries there are subtleties to consider, such as type -trading or investing, instruments, residency, global assets taxation, etc. I would look at this from another angle, pick a number of countries you'd consider retirement in, then proceed by eliminating those whose taxes don't jive.
Wrong, only EU and EEA are taxfree. So US and AU surely not.
"Capital gains from transactions with securities of public companies on the Bulgarian Stock Exchange or on a regulated securities market in EU/EEA countries."