Go to Poland - 19% flat income tax rate for companies - you can get flat by 400 euro / month in biggest cities and work remotely for foreign clients.
To expand on this: one can operate as a sole trader company, and enjoy the 19% flat income tax rate. You can also register your company for VAT, and then claim back the VAT on company purchases.
The only other cost is ~$270 / ~240 EUR / ~180 GBP per month in social insurance taxes.
I've been here for the last five years, and the low cost of living (very low cost outside of Warsaw) combined with low taxes makes Poland a very forgiving place to be when your first few side businesses inevitably fail.
(for that matter, the startup community here in Warsaw, centred somewhat around Reaktor - http://reaktorwarsaw.com - is really picking up steam)
If you do what I do - remote consulting for clients in the UK and USA - and you have the talent to charge western rates, you can build a sizeable nest egg in next to no time.
Agreed, it always feels scandalous to me whenever I hear this fact.
No idea how it works in practise. I known plenty of Americans who have settled in Poland for a good portion of their lives, so it must be possible to overcome the burden.
Maybe it's one of those things where, as long as you can afford to pay a good accountant (and you really should be able to afford it in Poland), they take the pain away for you?
On personal income. It sounds like the UK's "IR35" loophole - if you leave the money in the company you don't have to pay tax on that. So you can accumulate capital in the company.
Of course, you must be genuinely living abroad to apply for this. This means either spending enough time outside of the US (> 330 days in a tax year, if I recall correctly) or have enough proof that you are really living abroad (things like primary residence in your name, bills, bank accounts, mortgage, insurance, kids at school -- regular every day stuff).
Now if you want to game the system and just "kind of" live abroad in order to take advantage of the income exemption, that's a different story.
I know about being an expat and how to avoid SOME of the taxes. Point is, unless you make under that limit and don't spend more than a month per year in the US, you are liable for US taxes. They give credit for foreign taxes paid, but you'll basically be paying the US income tax rates when it's all done. Not to mention the sheer stupidity of having to file in the first place.
If you can structure your work and business correctly, I'm sure you can bypass such taxes. Assuming you don't want to renounce your nationality!
I mention that there are ways to avoid some of the taxes. I've BEEN an expat so I know how it works.
I also know that I still had to pay taxes even when I stayed out of country long enough just due to income levels. Additionally, with all of my family in the US it was pretty hard to stay out of country enough to avoid taxes.
Am I saying you shouldn't move out of the country? NO! I loved living in Europe. And if you live in a low cost of living country you will save lots of money if you get a US salary or contracts. What I am saying is that as an American you'll likely end up still paying US taxes and you'll still have to file with the IRS every year.
http://www.irs.gov/Individuals/International-Taxpayers/Forei...
The penalty is 0.1666% per month you didn't have qualifying health insurance for any 3+ month period(s) you didn't have it, e.g., if you didn't have insurance in the months of February-April, you'd be assessed a fine of 0.5% of your income.
And as an American you would still receive the support of the US government in case of war or other disasters.
Off the top of my head:
- The state's still transitioning from a post-communist economy.
- Wages are very low.
- Relatively high emigration rate "brain drain" (although people are starting to return).
- More supply, less demand.
You can buy a brand new apartment close to the centre for somewhere around $2000 per square metre / $200 per square foot. Depending on how your housing market work, that's either scandalously high, or shockingly low.
It is however, very very affordable as soon as you start earning a reasonable wage.
Remember, the average wage in Poland (according to GUS) is around $12750 yearly, so a $550/mo apartment (the average, from what I know amongst friends) in Warsaw is quite expensive for the average Pole.
So, why are wages so low? Well, we'd like to know as well :).
You have to learn the Cyrillic alphabet on top of learning a Slavic language though! I tease, I tease.
Isn't Bulgaria due to join the Schengen area pretty soon? Inside the next couple of years, at least?
Isn't Bulgaria due to join the Schengen area pretty soon? Inside the next couple of years, at least?
The problem is that both countries are still considered too corrupt for inclusion into the Schengen treaty. Romania seems to have cleaned up their act better then Bulgaria, but there are still grave doubts that the countries behave according to the treaty and don't, for example, sell visas to people, who are not eligible for them.
To the best of my knowledge, both countries are still on an waiting list, but given the current anti immigrant sentiments in most of central Europe this could take a few more years minimum.
Note that I'm not singling out the countries as crooked I'm just stating facts. Organized crime, for example, is still a huge problem in Bulgaria and corruption is still a huge problem in both countries. [1]
The only problem is communication with government, rather impossible without polish.
Very true - and very difficult at first, if your Polish is rather poor.
That said, my Polish was terrible, and I managed to bluster through it.
I recently helped an acquaintance through the process, and it turned out I'd done it the wrong way around. First hire a good accountant (mine costs slightly more than usual at $100/mo, thanks to processing many many many invoices/mo), sign over power of attorney for submitting tax documents, and they'll take care of the rest for you.
I think Warsaw's great. Plenty of green spaces, lots of child-friendly environments, and it's pretty easy - if you choose - to find yourself living in a community of similarly-aged kids where they all look out for one another.
The only downside I can think of is navigating stuff like vaccinations, doctors, and general bureaucracy. The majority you'll be fine with, but some working Polish - and having Polish friends - will be helpful as English is in short supply in some vital areas.
In fact, they're bad enough that I actively campaign against them.
Whoops, turned into a rant there by accident, sorry about that :)
I'd say, so far, Georgia is one of the most capitalist states in Europe.