If you’re in the business of designing and or deploying Trading Bots you’ll be pleased to know that such a field of endeavour lends itself well to an “Offshore” Corporate Structuring Plan.
Here’s how it typically works:
- You set up a tax free Offshore Company (“OC”)
- The tax free Company would own or have the License to commercially exploit the Bot
- The OC would enter into a contract with each client/investor whereby the OC agrees to allow the investor/client to trade using the Bot or to otherwise utilize the Bot
- The contract would provide for a payment/remuneration scheme whereby the tax free Offshore Company would be paid by the client/investor for supplying the Bot
- The payment could either be a one off fee or a periodic fee or a percentage of profits generated by the Bot
- The OC would be seen to be managed and controlled from Offshore (and ideally would seen to be beneficially owned by an entity offshore) ie from a tax free jurisdiction
- The source of the fees would be the contract
- The contract would be signed/closed Offshore by the Company ie in a nil tax environment
As such you can create a scenario whereby the income is generated, prima facie, in a nil tax environment.
Provided the Company is (a) seen to be managed and controlled from Offshore and (b) seen to be owned/beneficially owned by an Offshore/non-local resident there should be no tax payable in your home country on the Company’s earnings.
In short you should be able to achieve (a) by deploying a nil tax jurisdiction resident “Nominee” director & achieve (b) by setting up a Private Foundation to own/hold the shares of the Company.
A Bot is in effect a Piece of Intellectual Property (“IP”). Most clients in such a position would deploy a twin Company structure whereby the IP is held by one Company and the commercial rights are held under license by a 2nd Company (but more on that another 60 seconds..).
Local laws can have an impact. Hence you should seek local legal/tax/financial advice prior to setting up an Offshore Company for such purposes.
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