Elena Hmelovs

Big 4 firms charge 100.000€+ for this. Here it is for free: It's called a share-for-share exchange. You probably never heard about it & my team told me to not post it, but f*ck it. This procedure allows company owners to transfer shares of an existing company to a new holding abroad. But instead of getting paid in cash (which would get taxed), the holding pays the owners with its own new shares. The best part: It's 100% backed by law in almost every European country: > UK🇬🇧: section 135 TCGA > Ireland🇮🇪: section 586 TCA > Germany🇩🇪: §21 UmwStG > Netherlands🇳🇱: the "aandelenfusie" > Rest of the EU🇪🇺: guaranteed by the Merger Directive Let's take a UK company worth 3.500.000€ as an example: First we approach HMRC upfront to confirm in writing that they won't challenge it. This is called advance clearance. But to get a clearance, you need a whole set of documents. This requires multiple pages explaining the new structure & the business reasons behind it. The better you prepare, the fewer follow-up questions you get. Once HMRC says yes, the swap gets executed: > Value of the UK company: approx. 3.500.000€ > New holding shares issued: 1.000€ > Booked as "share premium": approx. 3.499.000€ > Tax on the share-swap: 0€ Nobody sells anything. The owners literally just "swap" their UK shares for CY holding shares. Same owners, same value, just a new company on top. So there's nothing to tax. The interesting part: On paper the holding only shows 1.000€ in share capital. The rest of the 3.500.000€ sits in the books as "share premium", which is completely normal for holding companies. Sounds complex, but the most important part is the legal outcome: > UK withholding tax on dividends paid to the holding: 0% > Most EU countries: 0% too, because of the Parent-Subsidiary Directive > Cyprus tax on dividends received by the holding: 0% > Cyprus tax on selling the shares later: 0% Fully legal btw. So instead of paying 39.35% in UK dividend tax, you pay 0% on every euro you reinvest through the CY holding (real estate, new companies, stocks, etc). That is very important if you're still tax resident in your current country, because a personal dividend distribution would mean local dividend tax. However, the option of relocating to Cyprus later & applying for the Non-Dom status stays open. This would then also reduce dividend tax to 0% (only 2.65% GESY applies, capped at 4.770€ annually). Meaning, at any point in the future you could relocate to Cyprus & distribute cash to yourself as a natural person, completely tax-free as well. But until then, the money gets reinvested & you accumulate wealth. Now. All of this is a heavy bureaucratic process. From first call to setting everything up, it can easily take a few months. Holding incorporation, business plan, bank accounts, registrations, valuations, HMRC clearance, share exchange agreements, board resolutions, etc. The crazy part: Big 4 firms easily quote over 100.000€ for this, often with percentages of the company's value. You just read the whole thing for free.

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