Legal paths to pay the lowest taxes possible

47% marginal rate in Spain to the 9% corporate rate in the UAE is legal. Optimize without moving, relocate to a favorable jurisdiction or use properly declared international structures. Three families of legal paths and where each fits.

Paying few taxes legally is possible. Paying zero, almost never. The difference between the two framings marks the line between serious tax planning and the fantasy circulating on social media. This guide walks through the real legal paths to minimize your tax bill without crossing the line, focused on common profiles: freelancers, advisors, ecommerce operators, SaaS founders, content creators and digital entrepreneurs.

At Exentax we have spent years working with people fleeing the 47% IRPF plus social security. The good news is that honest paths exist. The less good news is that none of them consists in "not declaring".

Principle one: tax residency rules

The first thing to assume is that your country of residence taxes you on your worldwide income. It does not matter where your company is, where your clients are or where your bank is: if you live more than 183 days a year in a country with a worldwide income system (Spain, France, Germany, Mexico, Argentina, Colombia and most of Europe and LatAm), you pay there.

From that starting point, the paths to reduce the burden open in three big families: optimize within your country, change your residency or use international structures correctly declared.

Path one: optimize without moving

Before thinking about complex structures, it is worth reviewing the basic tools that already exist in your country and that many people do not use.

In Spain, for example:

Right legal form: switching from autónomo to a limited company when income exceeds ~EUR 60-80k can cut the combined IRPF + quota bill.
Investment and training tax credits.
Corporate pension plans and contributions.
Flexible compensation for employees and working partners: meal tickets, transport, training, health insurance.
Capitalizing unemployment benefits when starting self-employment.
Impatriate regime (Beckham) if you return to Spain after several years abroad.

These tools do not eliminate taxes but can cut the bill 5-15 points without changing anything structural.

Path two: favorable tax residency

The most drastic and most legal way to pay less is living in a country with lower fiscal pressure. It implies actually relocating, breaking the previous residency and meeting presence days at destination. Some real options today:

Andorra: 10% IRPF, 10% CIT, 4.5% VAT. Minimum rates, high quality of life, border with Spain and France. Requires active or passive residency visa, minimum 183 days of presence.
Portugal: the classic NHR regime is already closed; the new IFICI regime is more restrictive but still exists for scientific and innovation profiles. Beyond that, Portugal is no longer the paradise it was.
Italy: impatriate regime and the EUR 200,000 flat regime for high net worth.
Greece, Cyprus, Malta: specific regimes for new residents.
UAE (Dubai, Abu Dhabi): real 0% personal income tax with residency visa and presence.
Paraguay, Uruguay, Panama, Costa Rica: territorial systems and accessible residencies, especially for Spanish speakers.
United States: 0% state in some states without income tax (Florida, Texas, Tennessee), but high federal IRPF. Only fits if you fit the US system.

Becoming a tax resident in another country is the only way to structurally and permanently reduce IRPF. It implies relocating, integrating and meeting the calendar.

Path three: declared international structure

If you do not want to relocate but your activity is clearly international (clients outside your country, digital model, income in several currencies), a corporate structure abroad can optimize corporate taxation, not personal.

The typical case is the US LLC for non-residents:

0% federal in the US through pass-through.
Profits flow to the owner and are declared in their country of residence.
Allows deducting all business expenses before paying tax in your country.
Working international banking and gateways (Mercury, Stripe USA, Wise).
Neutral and professional reputation.

How much do you really save? It depends on the country. For a Spanish autónomo billing EUR 80,000 per year, replacing the autónomo model with a well-managed LLC can move the tax burden from ~37% combined to ~20-25% effective, depending on expenses and deductions. Not 0%, but real.

Path four: legitimate combinations

For more complex profiles, paths can be combined:

US LLC + Andorran residency: a frequent combination for European entrepreneurs.
International holding + local operating subsidiaries: for groups with multiple businesses.
IP restructuring into a company with controlled royalties (carefully, given BEPS).
Multi-year dividend distribution to manage IRPF brackets.

These combinations require specialized advisory and honest design. They are not recipes; they are bespoke constructions.

What does not work and is worth dismissing

Not declaring the foreign account or company: CRS reports automatically. It is a crime and gets discovered.
Nominees and front owners: in addition to being illegal, it does not deceive the tax authority and breaks any real asset shield (complete guide).
Officially living in one country and really in another: the 183-day test, center of vital interests and digital traces (cards, phones, social networks) leave footprints.
Shell companies without substance: the effective management in your country turns them into local tax residents.
Promises of "0% global": they do not exist for residents in developed countries without actually relocating.

How to choose your path

A sensible roadmap:

Calculate your real current bill: IRPF + Social Security + net VAT borne, all together. Without that number, any comparison is theoretical.
Define what you are willing to change: structure only, residency, or both.
Estimate the net saving of each path after operating costs (company, advisory, life in another country).
Check the fiscal risk: effective control, international transparency, exit tax, substance.
Consult specialized advisors before acting: a poorly made decision is harder to recover than a well-made one.

The balance we recommend

For most clients reaching Exentax with the question "how do I pay less without having to hide?", the most balanced combination is usually:

US LLC to channel the international activity (0% federal in the US, working banking, gateways).
Monthly bookkeeping to optimize deductible expenses.
Full disclosure in your country of residence: effective control, dividends, transparency.
If it fits, consider relocating to a favorable jurisdiction (Andorra, UAE, Paraguay, Portugal IFICI).

This is not 0%. It is legal, sustainable, scalable and compatible with peace of mind. And, in most cases, it cuts the bill 10-20 points compared to the starting point. For many, that saving over a decade is the difference between always working and building wealth.

Typical scenarios where it applies

Case 1: employee starting freelance work alongside.

US LLC with correct declaration in country of residence. You leverage legitimate deductions, separate wealth and cut burden without changing your life. Annual cost: under 1,000 EUR.

Case 2: consolidated entrepreneur willing to live 6 months abroad.

Move tax residency to a low-tax jurisdiction (Andorra, Panama, UAE). Substantial fiscal saving but requires serious planning, clean break with the prior country and real commitment to the new one.

Case 3: executive with significant wealth and heirs.

Combination of wealth holding + succession planning + possible partial expatriation. Complex structure but clearly legal, with savings accumulated over decades that fully justify upfront advisory investment.

Frequently asked questions

What is the simplest legal path to reduce taxes?

Structure your activity through a US LLC, declare it correctly in your country of residence and use legitimate deductions. Without relocating, this combination cuts total burden by 5-15 points compared to traditional self-employment.

And if I want to pay literally zero?

You need to move residency to a low/no-tax jurisdiction (Andorra, UAE, Panama, Monaco) and completely break your prior residency. Paying zero without relocating is illegal in any OECD country.

How long does it take to implement an efficient legal structure?

Between 2 and 6 months for a well-formed LLC, with an operational bank account and basic compliance. If residency change is involved, add 6-18 months to consolidate the new tax residency.

Are tax amnesties an option?

Only if you have past unresolved situations. For forward planning, amnesties are not a tool but a last resort. Better to structure correctly from the start.

Is it worth advisory before acting?

Always. One hour of professional advice before incorporating saves years of problems and thousands in penalties. Initial structure mistakes are the costliest and hardest to fix. This is where Exentax steps in: we file the form, archive the receipt and, if the authority asks, your answer is already on the desk.

Is there a risk of regulatory change invalidating my planning?

There always is, but smaller than it seems. Consolidated regimes (Andorra, Panama, Estonia, LLC) have been operating for decades. Changes typically have a vacatio legis and respect consolidated situations. Structuring well and reviewing annually is the best protection.

Conclusion

Legal paths to pay less tax do exist. None consists in not declaring. The most effective ones combine international structure, fiscal planning and, when possible, favorable residency. The choice depends on your life, your income and your tolerance for change.

At Exentax we can analyze your specific situation and propose the path that best fits, without empty promises and without structures that create problems three years later. At Exentax we review your case with real data: book a free consultation for 30 minutes.

Tax compliance in your country: CFC, controlled-foreign rules and income attribution

A US LLC is a fully legal, internationally recognized vehicle. But compliance does not end at incorporation: as an owner who is tax-resident elsewhere, your local tax authority still has the right to tax what the LLC earns. The key is under which regime.

By jurisdiction

Spain (LIRPF/LIS). An operative single-member disregarded LLC (real services, no significant passive income) is generally treated under income attribution (art. 87 LIRPF): the LLC's net profits are attributed to the member in the year they arise and integrated into the general IRPF base. If instead the LLC elects corporation treatment (Form 8832) and is controlled by a Spanish resident with mostly passive income, the CFC regime (art. 91 LIRPF for individuals, art. 100 LIS for companies) can apply. The choice is not optional: it depends on economic substance, not on the label.
Information returns. US bank accounts with average or year-end balance >€50,000: Form 720 (Law 5/2022 after CJEU C-788/19, 27/01/2022, penalties now under the general LGT regime). Related-party transactions and dividend repatriation: Form 232. US-custodied crypto: Form 721. And if a notice does land, at Exentax we keep the dossier ready so you reply in hours, not weeks.
Spain–US tax treaty. The treaty (BOE 22/12/1990, Protocol in force 27/11/2019) governs double taxation on dividends, interest and royalties. An LLC without a permanent establishment in Spain does not by itself create a PE for the member, but effective management can if all activity is run from Spanish territory.
Mexico, Colombia, Argentina and other LATAM jurisdictions. Each has its own CFC regime (Mexico: Refipres; Argentina: foreign passive income; Chile: art. 41 G LIR). Common principle: profits retained inside the LLC are deemed received by the member if the entity is treated as transparent or controlled.

How to read the legal minimum-tax paths as a stable structural mapping rather than as a marketing trick

The legal minimum-tax paths read more usefully when they're treated as a stable structural mapping between residence, value creation and customers, than as a marketing trick. The mapping doesn't change with the season, and a short dated note in the personal folder with the three axes makes the position reviewable.

Before going further, put numbers on your case: the Exentax calculator compares, in under 2 minutes, your current tax bill with what you would carry running a US LLC properly declared in your country of residence.

> Free consultation, no strings attached

Practical rule: an operative LLC with substance, properly declared in your country of residence, is legitimate tax planning. An LLC used to hide income, fake non-residence or shift passive income with no economic justification falls within art. 15 LGT (anti-abuse) or, worse, art. 16 LGT (simulation). The facts decide, not the paperwork.

At Exentax we structure the entity to fit the first scenario and document every step so your local return can be defended in case of review.

Banking and tax facts worth clarifying

Fintech and CRS information evolves; here is the current state:

Notes by provider

Mercury operates with several federally chartered partner banks and FDIC coverage via sweep network: mainly Choice Financial Group and Evolve Bank & Trust, with Column N.A. still in some legacy accounts. Mercury is not itself a bank; it is a fintech platform backed by those partner banks. If Mercury closes an account, the balance is typically returned by paper check mailed to the account holder's registered address, which can be a serious operational problem for non-residents; keep a secondary account (Relay, Wise Business, etc.) as contingency.
Wise ships two clearly different products: Wise Personal and Wise Business. For an LLC you must open Wise Business, not the personal account. Important CRS nuance: a Wise Business held by a US LLC sits outside CRS because the account holder is a US entity and the US is not a CRS participant; the USD side operates via Wise US Inc. (FATCA perimeter, not CRS). In contrast, a Wise Personal opened by an individual tax-resident in Spain or another CRS jurisdiction does trigger CRS reporting via Wise Europe SA (Belgium) on that individual. Opening Wise for your LLC does not bring you into CRS through the LLC; a separate Wise Personal in your own name as a CRS-resident individual does report.
Wallester (Estonia) is a European financial entity with an EMI/issuing-bank licence. Its European IBAN accounts are within the Common Reporting Standard (CRS) and therefore trigger automatic reporting to the tax administration of the holder's country of residence.
Payoneer operates through European entities (Payoneer Europe Ltd, Ireland) that are also in scope for CRS for clients resident in participating jurisdictions.
Revolut Business: when paired with a US LLC, it operates under Revolut Technologies Inc. with Lead Bank as its US banking partner. The account delivered is a US account (routing + account number); no European IBAN is issued to a US LLC. The European IBANs (Lithuanian, Belgian) belong to Revolut Bank UAB and are issued to European clients of the group. If you are offered a European IBAN tied to your LLC, confirm exactly which legal entity holds that account and which regime it reports under.
Zero tax: no LLC structure delivers "zero tax" if you live in a country with CFC/tax transparency or income attribution rules. What you achieve is no double taxation and correct reporting at residence, not elimination.

The four real legal levers to minimise taxes

Paying less tax legally is not a trick, it is a coherent combination of four levers that work depending on your profile. The "zero tax" illusion typically hides fraud or structures the first audit dismantles. These are the real levers we apply at Exentax.

Residency jurisdiction selection. The lever with most impact. Moving tax residency to a favourable regime (Andorra, Portugal with NHR-IFICI, Italy with impatriate regime, UAE, Paraguay, Uruguay) can drop the effective rate from 47 % to 10-25 %. Requires real relocation with proof of centre of vital interests - not "bought" with a token lease.
Right activity structure. A US LLC with the partner in a favourable tax residency, operating as a transparent conduit, optimises within the treaty framework. For specific profiles (advisory, SaaS, ecommerce, royalties), numbers move between 0 % and 15 % effective depending on jurisdiction and composition.
Deferral and temporal engineering. Capitalising profits in an opaque entity, distributing in lower-pressure years, syncing asset sales with residency changes. Does not zero out tax, but can defer it for years with a positive financial carry.
Use of legal exemptions. Capital gains exemption on company sale via reinvestment, special regimes for researchers, R&D deductions, foral exemptions in the Basque Country/Navarre. All in law but with formal requirements to meet.

What we are asked the most

Is it legal to pay 0 % tax? Only in very few cases: effective residency in zero-tax-on-foreign-income jurisdictions (UAE, Monaco, Andorra for certain profiles), with strict compliance of the home country's anti-abuse rules. The "0 % from your couch" sold on social is fraud.

How much does a legal optimised structure cost? Between 1,500 € and 8,000 € yearly for profiles between 80,000 € and 500,000 € of revenue. Cost is justified by recurring tax savings, not by one-off tricks. A 50,000 € setup promising 0 % is usually smoke.

At Exentax we quantify first, then propose: we only suggest a structure when the 5-year net saving justifies the operational change and the maintenance cost.

References: sources on structures and jurisdictions

The comparisons and quantitative data on the jurisdictions cited here rely on official sources updated to today:

United States. Delaware General Corporation Law and Limited Liability Company Act, Wyoming Limited Liability Company Act (Title 17, Chapter 29), IRS Form 5472 instructions and IRC §7701 (entity classification).
Andorra. Llei 95/2010 de l'Impost sobre Societats (10% IS), Llei 5/2014 del IRPF and the active/passive residency framework of the Govern d'Andorra; annual reports of the Departament de Tributs i de Fronteres.
Estonia. Estonian Income Tax Act (deferred-distribution corporate tax at 20/22%) and official documentation of the e-Residency programme.
Spain. Ley 27/2014 (IS), Ley 35/2006 (IRPF, arts. 8-9 on residency and art. 100 on CFC) and the inbound-expat regime (art. 93 LIRPF, "Beckham Law").
OECD. Pillar Two (GloBE) and OECD Model Tax Convention with Commentaries.

Choosing a jurisdiction always depends on the holder's actual tax residency and on the economic substance of the activity; review your specific case before taking any structural decision.

_More on this topic: Spain exit tax: departure tax for crypto, LLC and Interactive Brokers investors._

How to pay less tax legally in Spain: IRPF deductions, pension plans, Beckham regime and US LLC as a legitimate planning tool

Before thinking about moving abroad, it pays to squeeze the legal levers already available in Spain that most taxpayers do not even apply. This block lays out the four real avenues for, with a checklist by profile at the end.

Lever 1: IRPF deductions the average resident leaves on the table

Personal pension plan contributions (capped at EUR 1,500 a year after the reform) and especially employment pension plans sponsored by the employer, allowing extra contributions up to EUR 8,500 a year without penalising the employee.
Maternity, large family, dependent descendants and ascendants and disability: state and regional deductions that many forget to claim.
Investment in newly created companies: 50 % state deduction on EUR 100,000 a year if you meet the article 68.1 LIRPF requirements.
Donations to organisations under Ley 49/2002: 80 % on the first EUR 250 and 40 % on the rest, plus loyalty incentives.
Primary residence rentals: regional deductions in Madrid, Catalonia, Valencia, Andalusia and others, with brackets by age and income.

Lever 2: employment pension plans and life annuities

The reform shifted weight from individual to employment pension plans. If you run your own LLC and live in Spain, channel part of the management compensation into an employment pension plan through your own structure where legally viable. Life annuities under article 38 LIRPF allow reinvesting capital gains tax free if you are over 65 and meet term and form conditions.

Lever 3: Beckham regime for inbound taxpayers

Ley 28/2022 expanded the Beckham regime to digital professionals with an online work visa and covers six full tax years. You are taxed at 24 % up to EUR 600,000 of employment income and non Spanish income is left out of the general base. Apply within six months of registering with social security; you must not have been a Spanish resident for the previous five years.

Lever 4: US LLC as a legitimate planning tool

A properly declared LLC lets you separate assets, professionalise management and, combined with a tax treaty, materially lower your IRPF bill when activity is international. The DGT V0290-20 doctrine accepts attribution as capital or business income depending on the partner's role. The LLC is never a wrapper to "not file" in Spain: with FATCA and the DAC8 progression, everything surfaces. Its value lies in operations, financing and legal optimisation, not concealment.

Checklist by profile

Employee: maximise the employment pension plan, review regional deductions, review flexible compensation (childcare voucher, training, health).
Self-employed: tidy up deductible expenses, assess switching to SL above EUR 60,000-80,000 net profit, consider the LLC as an international layer if your client base is global.
SL owner: blend salary and dividends taking advantage of the savings base, structure car and housing with caution under DGT rules.
LLC owner resident in Spain: file clean Modelo 100 and Modelo 720 where applicable, optimise within the legal frame and avoid opaque structures.

> How much can you save by combining these levers properly? Estimate your annual bill with the Exentax tax calculator and compare "as today" vs "with planning".

To see how the LLC fits your life in Spain continue with the LLC versus autónomo in Spain guide, and if you are tempted to move look at the digital nomad and tax residency strategy. To design your map, book a session with Exentax.

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For state-specific details, see our Wyoming LLC service page with closed costs and timelines.

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