{"id":12975,"date":"2025-06-23T13:42:12","date_gmt":"2025-06-23T10:42:12","guid":{"rendered":"https:\/\/gls-law.company\/?p=12975"},"modified":"2025-06-23T13:46:02","modified_gmt":"2025-06-23T10:46:02","slug":"venture-amp-dividends-where-up-to-35-of-income-disappears","status":"publish","type":"post","link":"https:\/\/gls-law.company\/en\/venture-amp-dividends-where-up-to-35-of-income-disappears\/","title":{"rendered":"Venture &#038; Dividends: Where Up to 35% of Income Disappears"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><strong>Series: Ivan\u2019s Investment Company<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Ivan started investing in startups as an individual. Things were going well \u2014 one startup grew and paid dividends. But when the funds arrived, Ivan was shocked: from $10,000, only $6,500 reached his account. The rest was taken by taxes.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Let\u2019s break down where up to 35% of your income can \u201cdisappear\u201d \u2014 and how to avoid it.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">1. Taxation by the Startup\u2019s Country<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">\ud83d\udd38 When you invest in a foreign startup as an individual, the startup\u2019s country may withhold taxes on dividends. For example:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>USA \u2014 up to 30% (without a tax treaty),<\/li>\n\n\n\n<li>Canada \u2014 25%,<\/li>\n\n\n\n<li>Germany \u2014 26.375%.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">\u2705 With a company, you can use international tax treaties to reduce the rate to 5\u201310%, or even avoid it completely (e.g., intercompany dividends in the EU).<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">2. Income Tax in Ukraine<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">If you&#8217;re a Ukrainian tax resident and receive foreign dividends as an individual:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>9% income tax + 1.5% military levy = 10.5%,<\/li>\n\n\n\n<li>if there&#8217;s no tax treaty \u2014 you may pay another 5%.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">\ud83d\udca1 Combined with taxes withheld by the startup, you could lose up to 35% of your total income.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">3. Tax on Repatriation<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Even if you create a CFC (Controlled Foreign Company) and later transfer profits to yourself \u2014 Ukraine will still tax it.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u2705 Ways to avoid this:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Retain and reinvest profit within the company;<\/li>\n\n\n\n<li>Use jurisdictions with no or low dividend taxes;<\/li>\n\n\n\n<li>Pay yourself through other methods (e.g., royalties, foreign salary, debt instruments).<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\">4. What Did Ivan Do?<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">\ud83d\udd39 Created an investment company in Cyprus.<br>\ud83d\udd39 Invests in venture funds through that company.<br>\ud83d\udd39 Receives dividends tax-free in Cyprus.<br>\ud83d\udd39 Keeps profits in the company for reinvestment.<br>\ud83d\udd39 Withdraws money flexibly \u2014 when and where it\u2019s most efficient.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">\u2705 Conclusion<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">If you invest in venture capital or receive foreign dividends \u2014 <strong>structure matters<\/strong>.<br>As an individual, you may lose up to 35% of your income.<br>With a properly structured company \u2014 those losses can be <strong>minimized or avoided entirely<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Series: Ivan\u2019s Investment Company Ivan started investing in startups as an individual. Things were going well \u2014 one startup grew and paid dividends. But when the funds arrived, Ivan was shocked: from $10,000, only $6,500 reached his account. The rest was taken by taxes. Let\u2019s break down where up to 35% of your income can [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":12959,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[241],"tags":[],"class_list":["post-12975","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investments"],"_links":{"self":[{"href":"https:\/\/gls-law.company\/en\/wp-json\/wp\/v2\/posts\/12975","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gls-law.company\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gls-law.company\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gls-law.company\/en\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/gls-law.company\/en\/wp-json\/wp\/v2\/comments?post=12975"}],"version-history":[{"count":2,"href":"https:\/\/gls-law.company\/en\/wp-json\/wp\/v2\/posts\/12975\/revisions"}],"predecessor-version":[{"id":12978,"href":"https:\/\/gls-law.company\/en\/wp-json\/wp\/v2\/posts\/12975\/revisions\/12978"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/gls-law.company\/en\/wp-json\/wp\/v2\/media\/12959"}],"wp:attachment":[{"href":"https:\/\/gls-law.company\/en\/wp-json\/wp\/v2\/media?parent=12975"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gls-law.company\/en\/wp-json\/wp\/v2\/categories?post=12975"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gls-law.company\/en\/wp-json\/wp\/v2\/tags?post=12975"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}