Can The Nominee Director Open The Bank Account For Me?

Often we are asked “Can I get a bank account opened for me by the Nominee without my involvement?”.

 

In short we can’t just deliver a Company + an opened bank account without your involvement.

 

In terms of what we need from each client getting the Company set up is easy. We just need via email a completed signed order form, confirmation of payment and proof of the client’s ID and residential address per the requirements.

 

But the bank account is a slightly different story…

 

When we open a bank account we have to supply to the bank as a minimum:

  • Proof, per the bank/s requirements, that the Company is incorporated
  • Proof, per the bank/s requirements, of who the Directors of the Company are
  • Proof, per the bank/s requirements, of who the shareholders of the Company are
  • Proof, per the bank/s requirements, of who the beneficial owners of the Company are
  • Proof of ID and residential address of the beneficial owners of the Company
  • Proof of ID and residential address re the proposed authorized account signatory/s
  • A detailed business plan re the Company

 

Most banks these days also require a professional reference re the beneficial owners of the Company.

 

Many banks these days also want to video interview the beneficial owner/s of the Company.

 

And invariably the bank will put two, often three, sometimes even 4 rounds of questions to us via email back and forth. To answer those questions most times we need to go back to the client to get instructions/info/docs.

 

In short the banks are paranoid (a) about the Company being used to launder money and (b) that the client’s business model might create reputational risk to the bank particularly if the business fails or if it falls foul of onshore regulators.

 

The owners of OCI have been in this line of business for 17 years. When we first got in the business we could get accounts opened in 2 to 3 days. Now, on average, the minimum it takes to get an account opened is 3 weeks post incorporation. Offshore (especially “tax haven”) Companies are considered high risk by the banks; Hence they ask a million questions and want to seemingly conduct a forensic examination of the Company/Enterprise/Owners before even they’ll even consider opening an account for such a Company

 

In short if you don’t want your name to appear in the bank records as “beneficial owner” of the Company what you can do is:

(a)  Include a (nil tax jurisdiction based) Nominee Director as part of the Corporate structure

(b) Set up a Seychelles Private Foundation to act as shareholder of the Company

(c) Set up the Foundation using a (nil tax jurisdiction based) Nominee Founder and Nominee Councillor

(d) Nominate a tax-free charity or a nominee to act as the initial beneficiary of the Foundation

(e)  Have yourself set up as an arms’ length employee or Contractor/Consultant of the Company

 

In the case of (e) the contract could make you responsible for ensuring that suppliers and staff get paid on time. This would necessitate you being appointed as the (sole) signatory on the Company’s Bank Account giving you complete control of the money.

 

Alternatively you could have the Nominee Director act as a “Nominee” Account signatory – in which case, assuming you adopt (a) to (d) above, – your name shouldn’t appear anywhere in the bank’s records.

 

Would you like to know more? Then please Contact Us:

 

 

 

www.offshoreincorporate.com

 

 

 

info@offshorecompaniesinternational.com

 

 

 

ocil@protonmail.com

 

 

 

oci@tutanota.com

 

 

 

oci@safe-mail.net

 

 

 

ociceo@hushmail.com

 

 

How To Launch an Initial Coin Offering (“ICO”) Offshore

Are you looking to launch a new form of Cryptocurrency? 

 

If so you’ll be pleased to know that such an endeavor lends itself well to an “Offshore” Corporate Structuring Plan. 

 

Cryptocurrency/coin is in effect a product. As A creator of same you will manufacture (or oversee manufacture of) the product and then offer it for sale in the market place. 

 

At the source of the product is a piece of Intellectual Property. Typically in such situations a twin Company structure is conceived ie a Trading Company (“TC”) + an IP Company (“IPC”). See below which explains how/why that works. 

 

Then, depending (largely) on where you live and how much privacy you require, you would probably want to set up a tax free Offshore Trust or Private Foundation to hold your shares in the TC/IPC as/if applicable. 

 

How and Why To Set Up An Offshore IP Company 

 

Intellectual property (“IP”) is a creation of the mind and includes things like inventions, literary and artistic works, designs and symbols, software code, names and images used in business. 

 

IP is commonly protected in law by way of patents, copyright and trademarks which enable the person who came up with the idea to securely earn recognition or financial benefit from whatever it is he/she has invented or created. 

 

An Offshore IP company is an ideal vehicle for the administration and management of licenses and intellectual properties including computer software, technical know-how, patents, copyrights and trademarks. 

 

Practicalities 

 

So how does it work from a practical perspective? 

 

At core the Offshore IP Company (which is usually set up in a nil or low tax country) is used to divert income from Trading Companies or Businesses trading in developed or high tax countries. 

 

The first step is to transfer ownership of the IP rights to the Offshore Company/Entity. 

 

Once that’s done the Trading Business then enters into a legal agreement (contract) with the IP Company whereby, in return for being allowed to use the IP, the Trading Company agrees to pay the Company royalties or license fees. The income arising from these agreements can then be accumulated offshore in a nil or low tax environment. 

 

Timing is of critical importance – It is clearly preferable to acquire the IP (for example, a patent) at the earliest possible time (e.g. at the patent pending stage) before the IP becomes highly valuable. That way the capital payment for the acquisition of the IP (e.g. patent) can be set at a lower amount i.e. before its true worth has been determined in/by the market. (These capital payments may even be deferred and or staggered by way of an instalment contract such as would enable the IP Company to use subsequent royalty payments to fund the cost of the IP). 

 

If a deal is struck for the Offshore IP Company to buy the IP before the IP gives rise to a product or service which is offered/advertised in the market the IP might even be transferred for nominal consideration enabling the IP inventor/creator to transfer patent, copyright or trademarks in favour of the low/nil tax company before the IP suffers significant appreciation in value. 

 

Businesses Who Pay Royalties or License Fees for the use of IP 

 

Once it has acquired the Property the Offshore IP Company can then issue (IP) sub-licenses or exploitation rights to appropriate third party structures. 

 

For example, a majority of software companies license their users through companies which are established in an offshore jurisdiction, or through a firm, which is not established in a classical offshore jurisdiction, but is owned or controlled by such a firm. 

 

Typical examples of businesses that might pay license fees to a nil/low tax Offshore Company include:

 

- Software companies

- Companies doing business in information technologies

- License and copyrights to books, articles, music, films, etc.

- Users of Franchise operating systems

- Trademark product (e.g. Clothes/Consumer Goods/Accessories etc. Brand) manufacturers and or retailers 

 

In some circumstances the royalties may be subject to withholding tax at source, however, the interposing of a second company in another jurisdiction may reduce the rate of tax withheld at source (a carefully selected jurisdiction can withhold taxes on royalty payments with the commercial application of double tax treaties). 

 

Structuring Options 

 

Another option, whilst you are still in the process of creating a new piece of intellectual property, is to involve or engage an offshore (nil tax) company as a foreign partner or financial sponsor. Participation in development at this early stage would entitle it to register as the owner or co-owner of the property. 

 

If you involve an offshore company later, you have to sell or assign the title to the property to the offshore company, and these kind of transactions requires at the least that a fair market price deal be apparent as if no associated parties were involved (+ the transfer may involve the incurring of some CGT on the part of the inventor/creator of the IP). 

 

Benefits of an Offshore IP Company 

 

There are numerous benefits that an IP holding company can deliver including: 

 

  • By placing your IP in one entity you are able to streamline the internal processes for inter-group licensing Cross-jurisdictional tax issues become simpler as you will be regularly licensing IP between the same jurisdictions
  • You can justify staffing that entity with people who have the skills to manage the same so protecting valuable assets of the company further, simplifying the licensing process
  • Assets can be valued due to the income stream that accrues for the benefit of the IP holding company
  • The value of the shares in the entity can be included into the accounts which will benefit the shareholders of the holding company
  • You can split your income streams in two enabling you to sell one chunk of your business first up (i.e. the operational business) whilst retaining the other (i.e. IP) arm of the business which would entitle you to receive passive income If your business or trading company ever gets sued and the IP is owned by a 2nd (e.g. Offshore) Company the most precious asset of your business can/will not be lost.
  • You get to retain ownership of your IP in a highly private environment where no one knows what you own or how much the IP is worth. (There have been many documented cases of inventors and artists who rise suddenly to fame only to lose their fortune just as quickly via a law suit filed by a disgruntled gold digging ex-lover or confidante… The chances of that happening if your IP is owned by a privacy haven company are GREATLY reduced)
  • You should be able to significantly, if not dramatically, reduce the tax that your operating/trading company would otherwise have to pay

 

Would you like to know more? Then please Contact Us: 

 

www.offshoreincorporate.com 

 

info@offshorecompaniesinternational.com  

 

ocil@protonmail.com  

 

oci@tutanota.com 

 

oci@safe-mail.net  

 

ociceo@hushmail.com

 

 

 

How To Avoid Automatic Exchange of Information by Changing Residency

Much has been speculated about the possible impact on financial privacy of the OECD’s MCAA driven Automatic Exchange of Information program (also known as CRS). Smart pundits are beginning to pick up on the fact that MCAA/CRS is unlikely to have anywhere near the impact of what the OECD claims. We stumbled across this article recently in the Tax Justice Network website which highlights but some of the weaknesses of the High Tax Countries Cartel’s latest faux pas:

 

The OECD’s Common Reporting Standards (CRS) is the big game in town for curbing cross-border financial transparency. As we’ve often noted, it is a good project, with global reach, but with loopholes.

 

One of the biggest of these loopholes, perhaps — after Loophole USA — is the problem of ‘fake residency’, where countries allow wealthy people from elsewhere to “buy” their way into being residents of that jurisdiction, perhaps in exchange for their investing a certain amount there, or paying a flat fee.

 

How does this enable people to escape the CRS?

 

Very simply: the CRS collects information about the beneficial owners of assets, then transmits that information to the owner’s place of residence. If the residence is fake, then the CRS system will require relevant agencies to collect and transmit the relevant beneficial ownership information to Dominica, say, and Dominica will ignore it, and not tax it either. End of story. The information trail goes cold. Banks, which are a core part of the CRS project, willingly collude in this monkey business.

 

For most of these fake residency schemes, there is a requirement to hand over relatively serious cash. Dominica, with only 70,000 residents, charges $100,000 for individual fake residency, and they only need a relatively small number of applicants to receive revenues that are meaningful for its 70,000 odd residents, many of whom are quite poor fisherfolk and so on. (No matter that the scheme may be cheating the citizens of other developing countries out of tens of billions: that’s not their concern.)

 

All sorts of places are jumping on this bandwagon. Following the recent decision of St Lucia to dive in, there are now five such places in the Caribbean alone, including St. Kitts and Nevis, Antigua and Barbuda, Grenada and Dominica.

 

Of course, this is a recipe for a race to the bottom. The next jurisdiction will offer residency for $75,000, and then it’ll be 50,000.

 

Well, in fact, the race already appears to be scraping the bottom. And it’s that fast-growing purveyor of offshore sleaze, Dubai. Take a look at this.

 

In short, you can obtain residence visas through three main avenues.

 

First, buy real estate in one of the United Arab Emirates, worth over a million Dirhams.

Second, get an employment contract there.

Third – and this is the super-sleazy one…

Incorporation of your own company in the United Arab Emirates. This is the most convenient and efficient option for obtaining business visas in the UAE. It takes only a few weeks to obtain visa and the expenses incurred are relatively low. Moreover, it is not necessary for a company to perform real activity – its business may be purely formal.
. . .

 

within a few days you are issued a certificate of incorporation of onshore company. Thereupon you and your family members receive residence permit in the UAE.”

 

The other thing the Article failed to pick up on is that Information Exchange will only effect passive investment Companies. If your company can be characterized as a Trading Operation there will be no information exchange. 

 

The other obvious things you can do to avoid the risk of Information Exchange are:

(a)  Open a bank account for your Company in  a country which has not signed the MCAA (We have solutions in that regard); &

(b)  Set up a Seychelles Foundation to hold the shares of your Offshore Company (Because section 71 of the Seychelles Foundations Act deems a Seychelles Foundation to be both the legal AND beneficial owner of any asset it holds).

 

Would you like to know more? Then please Contact Us:

 

www.offshoreincorporate.com

 

info@offshorecompaniesinternational.com

 

ocil@protonmail.com

 

oci@tutanota.com

 

oci@safe-mail.net

 

ociceo@hushmail.com

 

 

 

Can a Second Residence Assist Me To Avoid Tax At Home?

We’re seeing a lot of interest in this field in particular clients looking for a second residency or a 2nd passport. The UAE is doing a lot of business in this regard as a number of Emirates offer a nil tax Company product that comes with a residency permit.

 

The key question with a second residency is how it would all work from a taxation perspective ie who has the right to tax you and why and which country’s tax laws would/should apply?

 

As we see it there are 2 angles:

 

(a)   Application of tax laws in theory

(b)   Disclosure and practicalities

 

Re (a) most countries (particularly big western countries like the USA, EU, Canada, Australia, UK etc) have a very broad definition of “resident for tax purposes”. Regardless of what passport or residency permit you hold if you’re in that country for more than 6 months and or if you have a substantial connection to that country (even if you’re on the ground there for less than 6 months in any tax year) you can be classified as a “resident for tax purposes” making you liable to declare your worldwide income in and pay tax there.  

 

Substantial Connection

 

So what constitutes “substantial connection”?

 

In considering whether you still have a “substantial connection” to your mother country a number of factors are looked at including:

 

  • Do you retain a residency/home in your mother country?
  • Do you own any personalty in your mother country (eg a car, furniture/home contents/boat/leisure toys etc etc)
  • Do you have a bank account in your mother country?
  • Do you have investments or business interests in your mother country?
  • Do you retain a professional or trade license (eg Lawyer/Plumber/Doctor/Teacher/Nurse/Engineer/Architect/Builder/Dentist etc) license in your mother country?
  • Do you keep current a golf/tennis/leisure club membership in your mother country?
  • Do you regularly renew a driver’s license in your mother country?
  • Do you have children at school in your mother country?
  • Do you have a spouse/partner living full time in your mother country?
  • Etc etc etc

 

Chances are, as a minimum, what you will need to do in order to become non-tax resident in your mother country is:

 

(a)   Sell your home/residence in your mother country (or cancel any lease you might have over residential premises there)

(b)   Sell any business you own on the ground in the mother country

(c)   Sell all personalty owned/held in your mother country

(d)   Hand in (and not renew) any professional/trade license you may have in your mother country

(e)   Close down any bank/investment accounts you might have in your mother country

(f)    Write to your local IRS/Tax Office and advise that you have departed the country permanently and filed your last tax return.

 

Disclosure & Practicalities

 

Re (b) the question here is will a 2nd residence enable you to incorporate an Offshore Company and or open a bank account for your Company wherein your name won’t be recorded as being a resident of your home/birth country. Generally speaking in these instances you’d need to produce photographic proof of ID AND proof of residential address. If you can produce evidence of ID/Residential address from/as being in your country of 2nd residence, in the event of information exchange, your details won’t be given to the tax authorities of your home/birth country.

 

The ideal end game there would be that your mother country’s tax authorities would (hopefully) never find out about the existence of your Offshore Company or your connection to it giving them no chance to apply a potentially extensive tax residency law/definition in their favor.

 

Would you like to know more? Then please Contact Us:

 

www.offshoreincorporate.com

 

info@offshorecompaniesinternational.com

 

ocil@protonmail.com

 

oci@tutanota.com

 

oci@safe-mail.net

 

ociceo@hushmail.com

 

 

 

SEYCHELLES IBCs – ACCOUNTING REQUIREMENTS

We are often asked by Seychelles IBC owners “what are my Accounting obligations”?

 

Seychelles Companies are not required to keep audited accounts. In theory a Seychelles IBCs is supposed to keep books of account but that requirement is not enforced (ie nobody ever actually checks or asks “Are you keeping Books of Account? If so please show me copies”.

 

The only requirement is you will have to tell your Corporate Service Provider where the Company’s “Accounting Records” are being kept.

 

To summarize by Accounting Records I mean the raw data from which a set of books of account could be created/drawn (By raw data I mean bank statements, receipts, invoices, vouchers, contracts, etc, see below).

 

Whether to keep accounts in effect is up to you; That said in our view every small business should keep books of account. Which is easy to do yourself these days. There so many DIY (Do It Yourself) Accounting packages on the market presently (eg MYOB, Quickbooks, MS Books etc), for anyone who can use a computer, it’s child’s play.

 

Here’s a synopsis of the relevant provisions of the new Seychelles IBC Act in so far as Accounting Requirements are concerned:

 

  • Section 2 of the Act: “Accounting records”, in relation to a company, means documents relating to: (i) the company’s assets and liabilities; (ii) all receipts and expenditure of the company; and (iii) all sales, purchases and other transactions to which the company is a party (e.g., bank statements, receipts, title documents, agreements, vouchers, etc).

 

  • Companies are not required by the Act to prepare or file annual accounts or to appoint an auditor. However, under section 174(1) of the Act a company is required to keep reliable accounting records that: (i) are sufficient to show and explain the company’s transactions; (ii) enable the financial position of the company to be determined with reasonable accuracy at any time; and (iii) allow for accounts of the company to be prepared (notwithstanding that a company is not required under the Act to prepare accounts). For such purposes, accounting records shall be deemed not to be kept if they do not give a true and fair view of the company’s financial position and explain its transactions.

 

  • A company shall preserve its accounting records for at least 7 years from the date of completion of the transactions or operations to which they each relate.

 

  • A company that contravenes the requirements to keep accounting records in accordance with section 174(1) of the Act is liable to a penalty fee of US$100 and an additional penalty fee of US$25 for each day or part thereof during which the contravention continues. A director who knowingly permits a contravention of the requirements to keep accounting records in accordance with section 174(1) of the Act is liable to a penalty fee of US$100 and an additional penalty fee of US$25 for each day or part thereof during which the contravention continues.

 

  • Section 175(1) of the Act: A company’s accounting records shall be kept at its registered office or such other place as the directors think fit. Where a company’s accounting records are kept at a place other than its registered office, the company shall inform its registered agent in writing of the physical address of that place (section 175(2) of the Act). It is sufficient if the company provides the Registered Agent with an emailed scanned copy of the completed, signed and dated Notice.

 

  • Where the place at which a company’s accounting records are kept is changed, the company is required to inform its Registered Agent in writing of the physical address of the new location of the accounting records within 14 days of the change of location (section 175(3) of the Act). It is sufficient if the company provides the Registered Agent with an emailed scanned copy of the completed, signed and dated Notice.

 

  • A company that contravenes section 175 of the Act (location of accounting records requirements) commits an offence and is liable on conviction to a fine not exceeding US$2,500.

 

Would you like to know more? Then please Contact Us:

 

www.offshoreincorporate.com

 

info@offshorecompaniesinternational.com

 

ocil@protonmail.com

 

oci@tutanota.com

 

oci@safe-mail.net

 

ociceo@hushmail.com

 

Tax Free Offshore Companies For Expat Workers

In a previous article we looked at how Contractors can potentially minimize tax through Offshore Incorporation.

 

This article revisits the specific situation of expat workers ie persons working abroad, away from their home country, temporarily on a contract basis.

 

A compelling reason of itself to incorporate Offshore as an overseas contractor is to avoid being called on by your home Authorities to pay tax at home. You see, as an expat worker unless you’ve taken certain legal steps to become non-resident for tax purposes in your home country almost certainly you would still be liable to declare your contracting income in, and pay tax on that income in, your country of origin (see below which explains in details what resident for tax purposes means/is) .

 

In fact, if you are living in a country which does NOT have a Double Taxation Avoidance Treaty with your home country you could even be liable for double tax ie liable to pay tax on your income where you work and liable to pay tax again on that income in your country of origin. All such scenarios can potentially be avoided if you set up a tax-free IBC to act as your contracting entity.

 

The last thing you want to see happen when you return home is to be presented with a letter from your home tax authorities asking you to pay tax on the money that you earned whilst abroad. Such a scenario can be avoided with advance planning.

 

What is “Resident for Tax Purposes”?

 

We are often asked by individuals where (ie in what country/s) am I liable to pay tax?

 

The starting point is this: If you are regarded at law to be tax resident (ie resident for tax purposes) in a particular country you are liable to pay tax there on your (usually, worldwide) income.

 

The concept of tax residency however (ie what it takes to be classified as non-tax resident) varies from country to country. Depending on where you originate from you may pass the non-tax resident test of one country but fail the same test had you originated from the country next door.

 

Let me explain….

 

The most well-known tax residency test is in fact the oldest ie the days spent at home test. Historically, in most countries (USA excepted – see below), you would be considered non-tax resident for a particular tax year if you have spent less than half of that the year inside your “home” or mother country.

 

Over the years, and particularly with the proliferation of “fly in-fly out” jobs (seen most prevalently in the oil/mining industries) a number of countries (in particular the more developed countries) have brought into play a multifaceted tax residency test. In other words notwithstanding that you might spend less than half the year on the ground in your mother country if you have a “substantial connection” with your mother country you may still be classified as tax resident of/in that country.

 

So what constitutes “substantial connection”?

 

In considering whether you still have a “substantial connection” to your mother country a number of factors are looked at including:

 

  • Do you retain a residency/home in your mother country?
  • Do you own any personalty in your mother country (eg a car/furniture/home contents/boat/leisure toys etc etc)?
  • Do you have a bank account in your mother country?
  • Do you have investments or business interests in your mother country?
  • Do you retain a professional or trade license (eg Lawyer/Plumber/Doctor/Teacher/Nurse/Engineer/Architect/Builder/Dentist license etc) in your mother country?
  • Do you keep current a golf/tennis/leisure club membership in your mother country?
  • Do you regularly renew a driver’s license in your mother country?
  • Do you have children at school in your mother country?
  • Do you have a spouse/partner living full time in your mother country?
  • Etc etc etc

 

Chances are, as a minimum, what you will need to do in order to become non-tax resident in your mother country is:

 

(a)   Sell your home/residence in your mother country (or cancel any lease you might have over residential premises there)

(b)   Sell any business you own on the ground in the mother country

(c)   Sell all personalty owned/held in your mother country

(d)   Hand in (and do not renew) any professional/trade license you may have in your mother country

(e)   Close down any bank/investment accounts you might have in your mother country

(f)    Write to your local IRS/Tax Office and advise that you have departed the country permanently and filed your last tax return.

 

For USA citizens however a unique situation applies. Generally speaking if you are a US citizen you are required to declare worldwide income in and pay tax in America regardless of (a) whether you spend less than half the year there and (b) whether you have any substantial connection with the USA. (For Americans the only way to be classified as “non tax-resident” of the US is to hand in your passport and denounce your citizenship then do all the above things and leave the country indefinitely).

 

Would you like to know more? Then please Contact Us:

 

www.offshoreincorporate.com

 

info@offshorecompaniesinternational.com

 

ocil@protonmail.com

 

oci@tutanota.com

 

oci@safe-mail.net

 

ociceo@hushmail.com

 

How To Invest in a Start Up Using a Tax Free Offshore Company

Investing in a Start Up is an activity that lends itself well to an Offshore Corporate Structuring plan.

 

How it works is:

 

(a)    You incorporate a tax free Offshore Company (“OC”)

 

(b)   You structure the Company in such a way as to ensure that the Company is seen to be managed and controlled from Offshore; This can usually be achieved by via deployment of a tax haven based Nominee Director (which is a service that OCI can/will provide)

 

(c)    Your OC either signs a general investment with the Start Up Company or subscribes for shares in the Start Up Company

 

(d)   You advance funds to your OC

 

(e)   The OC then advances funds to the Start Up Company

 

(f)     The Fund Company utilizes your money to help it launch or expand

 

(g)    The Fund Company pays a return (eg dividends ie a share of the profits) periodically to your OC (eg monthly or quarterly or 6 monthly or yearly).

 

(h)   Returns paid to your OC can be banked and or reinvested Offshore potentially free from tax

 

Would you like to know more? Then please Contact Us:

 

www.offshoreincorporate.com

 

info@offshorecompaniesinternational.com

 

ocil@protonmail.com

 

oci@tutanota.com

 

oci@safe-mail.net

 

ociceo@hushmail.com

 

How To Bring Home Cryptocurrency Trading Profits

Do you trade Cryptocurrencies?

 

If so, are you experiencing difficulties in transferring funds, being your Cryptocurrency Trading profits, (ie cryptocurrencies converted, via an Exchange, into hard currency) back to your home country?

 

The solution is to:

 

  1. Incorporate an Offshore (eg tax free) Company. Ideally this Company would be characterized as an IT or etc Services Company (eg you could call it International Coding Services Ltd)
  2. Open up a Bitcoin/Cryptocurrency wallet in the name of the Company
  3. Open up a Cryptocurrency Exchange Account in the name of the Company
  4. Transfer all Cryptocurrencies you hold in your name presently to the Company’s Bitcoin/Cryptocurrency wallet
  5.  All future trades moving forward should be placed by and in the name of the Company
  6. Open up a Corporate Account for the Company Offshore
  7. As you generate Trading profits take the Company’s Cryptocurrency to an Exchange and have it converted into hard currency
  8. Transfer hard currency held at the Exchange from your Company’s Exchange account to the Company’s Corporate Bank Account
  9. You should be appointed as Consultant of/to the Offshore Company
  10. Periodically (eg monthly or quarterly or yearly, whenever you feel is appropriate) you would invoice the Company (and your invoice would be stated as being payable in hard currency eg $USD)
  11. The Company would transfer hard currency to your personal account at home upon receipt of the invoice

 

The end result? Money is banked at home without your home country bankers knowing that the source of the money is in fact Cryptocurrency Trading/Speculation.

 

Would you like to know more? Then please Contact Us:

 

www.offshoreincorporate.com

 

info@offshorecompaniesinternational.com

 

ocil@protonmail.com

 

oci@tutanota.com

 

oci@safe-mail.net

 

ociceo@hushmail.com

 

 

 

How To Set Up a Cryptocurrency Exchange Offshore

With the boom in growth and value of Cryptocurrenceis around the world doubtless demand for Bitcoin or Cryptocurrency exchanges is going to increase.

 

For the uninitiated a Bitcoin or Cryptocurrency Exchange is an Online market place where you can buy and sell cryptocurrencies and even pay for one type of Cryptocurrency using another form of Cryptocurrency.

 

Such a business lends itself well to an “Offshore” Corporate Structuring Plan. This article examines how…

 

Licensing Options

 

If in your business model the investor gives you money and you use that money to go and buy a stock of cryptocurrency/s and you then transfer ownership of that currency/s to the investor that would be a licenseable activity requiring either a Broker’s License or an Investment Adviser’s License.

 

But if all you are doing is supplying a market place where willing buyers and sellers can meet and buy/sell Cryptocurrencies a license technically should not be necessary (See below). That said, it can be very useful to obtain some form of Special License as it will open the door to a much wider range of banking partners.

 

Given that the legal personality of a Cryptocurrency Exchange is still very much up for debate there are a number of Licenses you could potentially apply for “Offshore” including:

 

  1. A Broker’s License in Belize; or
  2. Broker’s License in Seychelles (known in Seychelles as a “Dealer’s License); or
  3. A Broker’s License in BVI; or
  4. A Panama Financial Services Company; or
  5. A Financial Adviser’s License in Seychelles; or
  6. A Financial Adviser’s License in Belize; or
  7. A Costa Rican Data Processing License (this type of license is commonly used by Ewallet and Payment Processing Providers)

 

The cost to incorporate and apply for a License for businesses of the kind described above typically ranges from $US7,500 to circa $25,000.

 

Is a License Needed?

 

Another possibility is to apply for a Bitcoin/Cryptocurrency Exchange License. This is a recent invention in the International Financial Services Industry. Both Japan and the Philippines for example have recently passed legislation providing for the licensing and regulation of such businesses. Other jurisdictions are reportedly in the preparatpry stages of creating enabling legislation.

 

The sands are constantly moving under the feet is in this industry; new licensing possibilities for Bitcoin Exchanges are popping up all the time. Before committing to incorporate such a business it would be wise to seek legal advice as regards the Licensing Options on offer as, by the time you decide to actually incorporate such a business, there could be multiple new Licensing possibilities/opportunities on offer. Per above the bottom line is if you do/can obtain some kind of special license for your business that is going to gain you access to a much wider choice/range of banks.

 

Certainly in some of the more sophisticated (ie highly regulated) jurisdictions it’s possible that such a business model would constitute a Licenseable Activity. Hence, ahead of incorporating your business you should seek legal advice (in the country where you plan to incorporate) on whether you would need to also apply for a License as the penalties for running a Financial Services type business without a license can be substantial.

 

That said, as things currently stand in most if not all of the International Offshore Financial Centres, if your Company already owns the cryptocurrencies and you are selling them or if all you are providing is a marketplace/shop where people can buy such currencies (by tendering either hard currency or cryptocurrency) such a business shouldn’t need any form of special license.  It’s like having an online store where people buy pre-made software that you’ve pre-bought from elsewhere or swap one form of software for another. A license is not needed for such a business in any of the “Offshore” Incorporation Centres currently. Why should a Cryptocurrency store/exchange be treated any differently?

 

Hence if you don’t want or need a special license at this time one can see no good reason why you couldn’t (or indeed shouldn’t) incorporate your business “Offshore” in a low regulation and low or nil tax environment.

 

Would you like to know more? Then please Contact Us:

 

www.offshoreincorporate.com

 

info@offshorecompaniesinternational.com

 

ocil@protonmail.com

 

oci@tutanota.com

 

oci@safe-mail.net

 

ociceo@hushmail.com

 

 

 

Hong Kong Slashes Corporate Taxes

Hong Kong Chief Executive Carrie Lam has promised lower taxes on profits, tax deductions for businesses that invest in research and development (R&D) and the expansion of conference space in a prime area of Hong Kong in her initial policy declaration delivered last Wednesday, her first such announcement since coming to power earlier this year.

 

The new strategies seeks to diversify the economy and are likely to attract  increased foreign investment (see below).

 

Most interestingly Hong Kong Companies will soon pay tax of just 8.25 per cent on the first HK$2 million of domestic profits, reduced from the existing flat rate of 16.5 per cent. Profits above HK$2 million will still be subject to the 16.5 per cent tax rate. Non Hong Kong sourced income will still be bankable in Hong Kong (or elsewhere) free from tax.

 

Lam also announced tax breaks for companies that invest in Research & Development (“R&D”), to be implemented from 2018. For the first HK$2 million, companies will be able to claim a 300 per cent tax deduction. For expenditure beyond the HK$2 million benchmark, a 200 per cent tax deduction will be claimable.

 

Currently, companies receive only a 100 per cent deduction for R&D expenses. This means that a company with HK$10 million in profit but HK$5 million in R&D expenses would be deemed to have an assessable profit of HK$5 million and would need to pay HK$825,000 in tax. Under the new policy, the same company would be considered as having spent an amount greater than its earnings on R&D and would not have to pay any tax on its profits.

 

With the increased international pressure on Companies to show some substance on the ground in the country where the Company is incorporated (and with Hong Kong’s liberal approach to issuing residency permits for foreign owners of HK Companies) such a policy is likely to attract entrepreuneurs currently looking for tax free Offshore Incorporation Solutions… Simply put if you can show you have an office in, and or employ staff in, and pay some tax in the country of incorporation (ie if you can show some substance on the ground in the country where your Offshore Company is incorporated) it’s far less likely that your “Offshore” Company is going to come under scrutiny from tax officials in your home state.

 

Put another way if you want to minimize the risk of your Offshore Company being taxed where you live it’s prudent to show your Company pays a little bit of tax somewhere.

 

No doubt a generous tax rate of just 8.25% is going to incentivize current and would be nil tax Company owners/users to Incorporate in and set up something on the ground in Hong Kong as the years progress….

 

Would you like to know more? Then please Contact Us:

 

www.offshoreincorporate.com

 

info@offshorecompaniesinternational.com

 

ocil@protonmail.com

 

oci@tutanota.com

 

oci@safe-mail.net

 

ociceo@hushmail.com