The Golden Rule: Establishing Your Center of Main Interests (COMI)
Before diving into country specifics, it's crucial to understand the non-negotiable prerequisite: you must genuinely move your Center of Main Interests (COMI) to your new country. This isn't a loophole for a mailbox address. A court will scrutinize your application to ensure your life is truly based in the new jurisdiction.
To successfully establish your COMI, you must demonstrate that:
Your primary residence is in the new country.
If you have a family, your spouse and children have relocated with you.
You are integrated into local life (e.g., bank accounts, social club memberships, utility bills).
Stays in your country of origin are limited to short, infrequent visits.
Attempting to fake your residency will not only lead to the failure of your application but could also result in severe legal consequences. This strategy is for those genuinely committed to relocating for the duration of the process.
The Baseline: Why You Might Leave Germany (or Austria)
To understand the benefits of relocating, let's look at a common, less-favorable jurisdiction like Germany. The German process is lengthy and restrictive:
Duration: A mandatory 3-year "good conduct phase."
Process: It begins with a difficult out-of-court settlement attempt. If that fails, you enter a formal insolvency process where a trustee manages your assets.
Obligations: You are required to work or prove you are actively seeking it. Any change in your professional or residential situation must be reported immediately.
Outcome: After 36 months of strict oversight, you can achieve a discharge of residual debt, but certain debts (like those from criminal acts) are excluded.
This long, intrusive process is exactly why entrepreneurs and nomads look for better, faster alternatives within the EU.
EU Personal Insolvency: A Country-by-Country Comparison
Several EU countries offer much faster routes to debt discharge. Here’s a breakdown of the top contenders.
🏆 The Winner: Ireland
Ireland is widely considered the most debtor-friendly country in Europe, making it the premier destination for a strategic insolvency.
Period to Debt Discharge: Just 12 months.
Key Advantages:
Speed: Your remaining debt can be written off in only one year.
Creditor-Unfriendly: The system places a high burden on creditors. For a claim to be asserted, they must attend a face-to-face appointment with a local lawyer, a significant hurdle for foreign creditors.
Broad Debt Coverage: The discharge covers most debts, including tax debts and damages claims. Only child support and court-imposed fines are typically excluded.
Asset Protection: Mortgages, life insurance policies, pension debts, and local bank accounts are generally unseizable.
Low Cost: The procedure is remarkably inexpensive, with court costs as low as €200 (plus legal fees).
Non-Dom Tax System: After your discharge, if you remain a resident, Ireland's non-dom system offers the potential for a virtually tax-free life as you rebuild, a huge plus for digital nomads.
Disadvantages & Obligations:
The attachable portion of your earned income must be paid for 3 years, even though the discharge happens after 12 months.
You cannot act as a director of an Irish Ltd. during the process.
Self-employment requires authorization from the administrator.
Prerequisites:
You must genuinely establish your COMI in Ireland.
Your debts must total at least €20,000.
The Runner-Up: Latvia
Latvia offers a potentially fast process, but with more stringent conditions and fewer protections than Ireland.
Period to Debt Discharge: 12 to 36 months, depending on how much of the debt you can repay. A 6-month discharge is theoretically possible but rare.
Key Advantages:
Potentially faster than the German model.
No need to prove a prior out-of-court settlement attempt.
Creditors cannot charge interest or late fees once the insolvency begins.
Disadvantages & Obligations:
Strict COMI Rule: You must have moved your COMI and been paying taxes in Latvia for at least 6 months _before_ applying.
Creditor-Friendly Rules: Unlike Ireland, the discharge of residual debt often excludes tax offenses, alimony, and direct liability.
Loss of Control: An administrator takes control of all your property and assets. You cannot enter into new payment obligations or transactions over €500/month without consent.
High Income Tax: A flat one-third (33.33%) of your income is taken during the process.
A Word of Caution: Spain
Spain seems attractive with a 12-16 month discharge period and no formal "good conduct phase." However, it comes with a major catch.
Period to Debt Discharge: 12 to 16 months.
The Major Disadvantage: After the procedure begins, you are legally barred from incurring or accumulating new debts for 5 years. This severely restricts your ability to participate in modern economic life—forget getting a phone contract, credit card, or financing for a new business. If the court deems your insolvency malicious, you could even face prosecution.
Other EU Options (Portugal, Czech Republic, Bulgaria, etc.)
Many other Eastern and Southern European countries offer insolvency proceedings, but their timelines are generally much longer, ranging from 3 to 7 years. While potentially better than Germany, they do not compete with the speed and efficiency offered by Ireland.
