December | 2017 | Offshore Companies International

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 ie we have to disclose the name/ID of the person who asked us to set up the Company
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 very 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 of the Company.

Where the shareholder of the Company is a Foundation we also have to supply to the bank:

Proof, per the bank/s requirements, that the Foundation is registered
Proof, per the bank/s requirements, of who the Councillors of the Company are
Proof, per the bank/s requirements, of who the Founder of the Foundation is/was
Proof, per the bank/s requirements, of who the beneficiaries of the Foundation are
DD/KYC/ re Proof of ID and residential address of the beneficiaries of the Foundation

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.

Bank Account Opening Procedure/s

If you engage us to assist you to open an Offshore Account here’s how the system usually works:

(i) When you first contact us we email you a bank account brochure showing details of the 53+ banks that we hold introducer relations with

(ii) Once you’ve confirmed your order for a Company Trust or Foundation (or Bank account) we will email you for completion and return a banking questionnaire (see sample BELOW)

(iii) Once that’s received we send you detailed information as regards banks which we feel are most likely to meet your needs (ie based on the answers given in the questionnaire)

(iv) You tell us which bank you want to open an account with

(v) We send you an order form for that bank

(vi) We use the data in the order form to complete the bank account application forms

(vii) We arrange for the bank account application to be signed by the Company Director and account signatory and then delivered to the bank + we will email you to tell you what you need to do/supply

(viii) You will then furnish us/the bank with a detailed summary of the company’s proposed business activities + proof of your ID/residency as per the bank’s requirements (ie in the event that you are the underlying beneficial owner of a company applying for the account or nominated as account signatory). Certain banks also require a bank reference.

(ix) We follow up with the bank until the account is opened

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

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

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

With the raging success of Bitcoin and Ethereum new Cryptocurrencies seem to be hitting the market every other day. This Article examines how you might launch an Initial Coin Offering (“ICO”) Offshore and bank the profits free from tax.

There are several ways you could launch an ICO from Offshore. Ideally you would either:

(a) Form a tax free Offshore Company and have that Company enter into an Agreement/Contract with first up investors; or

(b) Set up a tax free Collective Investment Company Offshore (ie a non-licensed Closed End Fund) whereby investors receive shares in the Company in proportion to the amount of money they invest.

The first option is the most commonly used. How it usually works is:

The creators of the new Cryptocurrency form a tax free Offshore Company (“OC”)
This Offshore Company develops the new Coin/Cryptocurrency (or holds the rights, under license from a 2nd tax free Offshore IP Holding Company, to promote/market the new Coin/Cryptocurrency)
The initial Investors and the OC enter into an Agreement whereby the OC, in consideration of a payment made by the investor to the OC, agrees to issue a certain number of Redeemable Tokens to the Investor
Each Token entitles the Token holder to certain rights and can be traded on the open market.
In the perfect investor model, the Token would entitle the Investor to a certain number of the ICO’s Cryptocoins when the Coin goes to the open market and/or to receive a share of the Company’s profits
When the Coin goes to market the profits can be banked and or reinvested Offshore potentially tax free (and away from the prying eyes of Onshore Regulators)

A variation on the above is to set up a Foundation (which owns a/the Coin Issuing Company) and have investors make donations to the Foundation. The Foundation passes on all monies so collected to the Company which develops the coin. In return for a/the donation to the Foundation the Company issues a Token to the investor/donor.

Another similar way for a Start Up Cryptocoin Company/Business to raise venture capital is via Crowd Funding (https://www.fundable.com/learn/resources/guides/crowdfunding-guide/what-is-crowdfunding )

Closed End Fund

In this model a tax free Offshore Company is set up and shares in the Company are issued to the investors in proportion to the amount of monies invested. Usually how it works is:

The Promoters/Creators of the new Cryptocurrency form a tax free Offshore Company (“OC”)
The Company has a specially tailored Articles of Association which enable it to issue 2 classes of shares ie Class A Shares (also known as management shares) and Class B shares (also known as equity shares)
The Promoters/Creators of the new Cryptocurrency decide how much capital they want/need to raise and, how many shares they are prepared to/wish to issue and the price of each such share
The Investors sign off on an Information Memorandum (ie in effect a Prospectus) that stipulates, amongst other things, a/the minimum amount of time the investor has to commit his funds before being able to cash in his shares (eg it could be a month, or 3 months, or 6 months or 12 months or 2 years or etc).
The investor pays his money to the OC and receives shares in the Company in proportion to the amount of money contributed. These shares entitle the investor to a share of the profit that has been realized by the Company as at the end of the agreed investment period but carry no voting rights.
The Promoters/Creators of the new Cryptocurrency receive shares that have both equity rights and voting rights Once the desired amount of Capital is raised the Company goes to market and starts selling the Cryptocurrency to the general market
At the end of the agreed investment period the investor has the right to cash in his shares and walk away or reinvest for a further period.

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

www.offshoreincorporate.com

info@offshorecompaniesinternational.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