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

 

 

Second Residence Options: PANAMA

If you’re looking at second residency options (and are tired of living in a cold climate!) you might want to consider taking a close look at Panama.

 

Panama Offers what’s known as a “Friendly Nations Visa”.

 

With this VISA there is nothing to invest midterm or long term, you just need to:

(a) create a company in Panama where you will be the President and Shareholder and claim that it will be used for professional services in Panama; and

(b) open a bank account in your name in Panama. (This bank account would have to be funded with a minimum of $5,000.00. If there are dependents to be included with the main applicant, then $2,000.00 per dependent needs to be added).

 

Most of the bank account opening process can be done without you needing to visit Panama, so we can advance 90% with that and, once you arrive in Panama, finalize everything so that the account is opened in approximately 2 weeks.

 

You will need to travel to Panama at least twice.

 

On the first trip you will need to meet the bank and finalize the account opening, sign the power of attorney empowering us to file the application and have your passport registered with the Immigration Service.

 

Once the bank account is open you will need to send funds to activate the account and obtain from the bank a letter of reference and/or a statement of account stamped by the bank. Once you have that we can then start the process of incorporating the company (it takes roughly 5 days to incorporate a company in Panama). The account would need to be funded with $5,000.00 and $2,000.00 extra per dependent if such is the case.

 

If you’re able to stay in Panama for an extended period, we can file the application right away and obtain the provisional residence permit and multiple entry and exit permit (this last one is necessary to leave the country while the visa is being processed as otherwise upon the return of you can be penalized with a fine of $2,000.00).

 

On the second trip, ie once the Visa is approved, you will need to travel to Panama to obtain your permanent resident card.

 

Our legal fees are $4,500.00 + 7% service tax for the main applicant, plus $400.00 + 7% service tax per dependent. The fee includes the company formation.

 

The approximate expenses are:

$1,690.00 for main applicant and $1,300.00 per dependent. (Children under 12 years of age are exempt from the repatriation deposit of $800.00).

 

Our legal fees for the attainment of the Multiple Entry and Exit Permit is $200.00 + 7% service tax (per applicant) + $100.00 (per applicant) in costs payable to the Immigration Service.

 

To open the account, you will need to travel to Panama and meet the bank, and bring with you the following documents:

- Reference letter from a bank

- Reference letter from a lawyer, accountant or other professional

- Reference letter from a business partner

- Copy of your entire passport (the bank will make a copy)

- Copy of a secondary ID such as a driver’s license

- Proof of income, which can be provided in the form of payment stubs from your current employment or by submitting the last three tax returns you have filed.

 

These documents can all be submitted in English.

 

For the Visa, it is imperative that you have the bank account, so after the bank account has been opened we can move forward with the Visa application.

 

The documents each applicant needs to bring with him/her for submission as part of the Visa application are:

- Valid passport

- Police record issued by the FBI, RCMP or equivalent authority in your country (except children under 18)

- Marriage certificate (applicable if legally married and spouse is applying as dependent of main

applicant)

- Birth certificate (applicable if children of the applicant under 18 years of age are applying as dependents of the main applicant).

 

The rest of the documents can be obtained in Panama, including the Declaration form of personal background information.

 

Any and all documents issued abroad have to be legalized by means of a Panama Consulate or via Apostille and duly translated into Spanish.

 

Translations prepared abroad would also need to be legalized via Consulate or be Apostilled.

 

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

 

What Is a Registered Agent and Why Do I Need a Registered Agent?

A Registered Agent is a responsible third-party who is physically located in the same jurisdiction in which a business entity was established and who is designated to receive service of legal process notices (eg law suits), correspondence from the Registrar of Companies, and other official government notifications, on behalf of the Company/Entity.

 

Why Do I Need a Registered Agent?

 

Every Offshore Company must have a Registered Agent AND a Registered Office on the ground in the country of incorporation. The Registered agent will accept documents on your behalf. The jurisdiction in which your business is registered needs to know it has a contact person for your business within the jurisdiction at all times; accordingly, PO boxes are not acceptable addresses for registered agents.

 

These days it may not be enough to have a “brass plate” office in the country of incorporation. If you want to show some substance on the ground – and thereby minimize the chances of your Company being classified as resident or controlled from onshore – what you might want or need as part of your Corporate structure is:

 

  • A Nominee Director resident Offshore and/or in the country of incorporation
  • A local phone number in the country of incorporation
  • A serviced (or, ideally, stand-alone) office in the country of incorporation
  • A stand-alone PO Box in the country of incorporation
  • A local tax number issued in the country of incorporation

 

OCI can supply all these things as part of your Company Formation package.

 

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 an Offshore Fund Using a Tax Free Offshore Company

Investing in a Company or Fund that trades online is an activity that lends itself well to an Offshore Corporate Structuring plan. By way of intro check this link: http://offshoreincorporate.com/common-offshore-corporate-strategies/#5

 

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/will 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 agreement with the Fund Company or subscribes for shares in the Fund Company

 

(d)  You advance funds to your OC

 

(e)  The OC then advances funds to the Fund Company (see below “How to move money offshore” which explains your options in that regard)

 

(f)    The Fund Company invests/trades your money

 

(g)  The Fund Company pays a return 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

 

HOW TO MOVE MONEY OFFSHORE

 

Depending on your individual situation there are several ways you might achieve this aim:

 

  • You could set up a dual structure (ie an Offshore Company the shares of which are held by an Offshore Private Foundation). You would set up the Foundation in such a way so that appears to be a Charitable Foundation and then make regular donations to the Foundation (which would then transfer that money to the IBC eg as share capital).

 

  • Set up 2 International Business Companies Offshore (ie “IBCs”). The first IBC you would enter into a speculative (eg high risk/potentially high return) general (long term) investment with. This IBC would then invest money with your trading IBC. The investment with the first IBC could be structured in such a way as to ensure that you won’t be paid a return on that investment for quite a while. If the IRS ever asks meantime whatever happened to the money you would just tell them I’m not yet entitled to a return.

 

  • Convert your local money into bitcoins. Transfer ownership of the bitcoins to the IBC. Have the IBC convert the bitcoins into hard currency which the IBC would then use to invest in whatever.

 

  • Engage a lawyer to DD on the Offshore Company or Foundation you intend to send money to. Whilst he’s making inquiries to confirm that the entity exists etc, (as you might do prior to a real estate purchase) you park the money you intend to invest in the Lawyer’s Trust/Client/Escrow Account. Once he’s completed his inquiries you instruct the Lawyer to send the funds from his Trust/Client/Escrow account to the Offshore Company or Foundation’s Bank Account

 

  • “Gift” the money to a family member (or close friend) overseas and then have that family member transfer the money to your Offshore Company

 

  • If you are holding funds in your own name you could set up a personal account Offshore and then transfer the money from your Onshore bank account to your Offshore Bank Account. Same could be done in the case of funds being held in a Company account onshore (ie you set up an Offshore Privacy Haven Account in the name of your local Company and have funds transferred from the Company’s Onshore account to your Company’s Offshore account). If you open the account in the right place onshore predators will really struggle to find out where the money went once it landed offshore.

 

  • You could set up your IBC as an Investment Company and enter into an arms’ length general investment agreement (or loan agreement) with the IBC on commercial terms. Provided the IBC is incorporated in a Privacy Haven (and in a country which does not have a TIEA with your home country) no one should ever know that you actually own the IBC.

 

  • You could withdraw your money from the bank in cash, use that cash to buy something of great value which is easily transportable (eg jewelry, gemstones, watches, an artwork/s, collectibles etc) fly overseas with these items (ideally to the country where your Offshore Company has its bank account), sell them to a broker or privately whilst abroad and then deposit that money into your Offshore Company’s Bank Account.

 

  • If you are an online trader (eg Forex/Commodities/Derivatives/Share Trader) you could open a Brokerage Account in your own name, transfer funds to your personal brokerage account, then open a Brokerage Account (with the same broker) in the name of your Offshore Company and move monies (as an internal transfer, ie beyond the view of “onshore” authorities) from your personal Brokerage account to the Company’s Brokerage account.

 

Local laws can have an impact. Hence it would be wise to seek local tax/legal advice before committing to embark on such an endeavour.

 

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 Use a Tax Free Offshore Company To Own a Patent or Brand

We are often asked “How can I hold a patent or brand using a tax free Offshore Company?”.

 

A patent or Brand is a piece of Intellectual Property (“IP”).

 

In the case of a Patent, whilst you might save on tax by having the brand owned by a tax free Offshore IP Holding Company, you’ll want to firstly make sure that your Patent is recognized and capable of enforcement world-wide. The starting point therefore should be to ensure that your IP Holding Company is incorporated in a country which is a member of the World Intellectual Property Organization.  The full list of member states can be viewed here: http://www.wipo.int/members/en/

 

Zero or low tax countries in that list where we can incorporate a Company for you include:

Belize

Cook Islands

Costa Rica

Cyprus

Dominica

Ireland

Nevis

Malta

Mauritius

Panama

St Vincent

Samoa

Seychelles

Singapore

UAE

USA

 

Practicalities

 

Say you’ve developed and applied for a Patent for a breakthrough eyewear related product.

 

What you could/should do is:

 

(a)          Set up a zero tax Company to own the Patent/IP (‘the IP Company”)

(b)          Incorporate a 2nd (nil tax or low tax) Trading Company.

 

How it would work is:

 

1.            You would transfer ownership of the patent now (ie whilst its almost valueless) to the IP Company. See below which explains the process

2.            The IP Company would grant the Trading Company an exclusive license to market the IP

3.            The Trading Company would pay the IP Company licensing fees (eg a percentage of the sale every time a product containing the brandname/patent is sold)

 

The advantages of the twin Company structure are in essence:

(a)          The Trading Company is the one in the market place. It will incur the debts and pay staff/suppliers etc. Any law suits (or potential liability) will fall on its head thus protecting the key asset at the core of the business

(b)          It enables you to later on sell the business (ie The Trading Company) but retain a passive income stream (ie royalties or license fees paid to the IP Company)

 

How 2 Transfer Ownership of IP 2 an Offshore 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.

 

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.

 

Alternatively you might transfer ownership of IP to a tax free Offshore Company (“OC”) for an agreed price but subject to a deferred or gradual payment basis. How that would work is you would transfer ownership of the IP up front and agree for the OC to pay you in stages in consideration of a price premium and/or in consideration of the OC engaging you in an ongoing/consultancy capacity.

 

However you transfer ownership of IP to an OC the transaction should be seen to be on commercial terms for fair market value. If you are unsure of market value you could either brief a licensed Valuer for an opinion or advertise the IP for sale publicly. The highest bid would be fair market value. At the end of the day in the market place a piece of property is only worth what someone else is prepared to pay for it!

 

Local law can have an impact. Hence you should seek local legal and financial advice before committing to incorporate an Offshore Company for such purposes.

 

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