I’m currently living in Portugal and want to start a company for an app which I expect to have customers worldwide.
I know people can create a company in other countries to the one they currently live in order to get various benefits like lower tax. For example I’ve seen many posts about Delaware or Estonia. But what are the criteria for doing so generally? Do you need to have clients in that country, or do you need to be operating the business from that country (so I would need a cofounder is living in US for instance)?
And could Portugal have their own laws which need to be considered to with regards to this?
Starting a company in a different country like Delaware in the US or Estonia for lower taxes or other benefits is common, but it’s not just about where your clients are. Key factors include the legal and tax implications in both the country where the company is registered and where you’re resident (Portugal in your case). You don’t necessarily need to operate the business or have a co-founder in that country, but you should consider where your company will be deemed as having its tax residence, which is often where the key management decisions are made.
Portugal will have its own rules about foreign income and companies, especially if you’re a tax resident there. So, if your company is abroad but managed from Portugal, it might still be liable for taxes in Portugal. Each country has different treaties and laws regarding foreign-held companies and income, so it’s essential to consult with a legal and tax expert in both Portugal and the country where you plan to register your company. This will help you navigate the complex legalities and make the most informed decision.