How To Sell Digital Assets Using a Tax Free Offshore Company

Whenever there is economic disruption on a major scale (such as we are experiencing presently thanks to the Corona pandemic), opportunity comes knocking.


People working from home and or with more time on their hands are starting to realize that valuable digital assets can be sold online and there is more demand for such products than ever before.


Examples of digital assets include:


  • EBooks
  • Original music (including beats, jingles, film music, ringtones etc)
  • Videos (eg original films, tutorials etc)
  • Photos (eg for website use, Look up tables, mock up images etc)
  • Icon designs/artwork (eg business logos, business cards, website home pages etc)
  • Software (eg add ons/plugins for video games, website templates etc)
  • Knowledge (eg Coaching, teaching, financial, legal etc)
  • Marketing services (eg Email campaign templates, add flyers etc)


What do all these products/services have in common?


They can be marketed and delivered online.


A business where goods or services are advertised for sale, and delivered, online lends itself (incredibly) well to an “Offshore” Corporate Structuring Plan. Here’s how it usually works:


  • A nil tax offshore company (commonly an International Business Company “IBC”) is incorporated to own/operate the business
  • You design/launch a website or Online Product/Sale portal which is owned by the Offshore Company
  • The IBC owns all proprietary items (including also the/any Trademarks, Operating software/systems, soft products to be delivered to customers etc)
  • Your website/landing page should ideally should be hosted in a nil tax/private Jurisdiction (Iceland is currently the most popular destination for such web hosting, Singapore is also often favoured)
  • The clients find you and/or contact you via the web
  • The IBC is seen to be managed and controlled from (and ideally beneficially owned from, see below) Offshore. This is achieved via the appointment of a (nil tax jurisdiction based) “Nominee” director.
  • Your standard sale agreement/website terms and conditions should provide (a) that a contract is not formed until the customer’s offer is accepted by you (ie the Offshore Company) and (b) that the source of the income is the contract. Before the client clicks buy he/she clicks on a button acknowledging that he/she has read and agrees to be bound by your terms & conditions
  • Acceptance of the buyer’s offer would be provided by the Company (which is seen to be managed from “Offshore” via a nil-tax-jurisdiction resident Nominee Director) sending an email or text to the buyer, after he/she has paid online; In simple terms what that means is that the situs of the Contract ie the place where the contract of sale (ie the agreement between you and the buyer for you to supply goods in consideration of the buyer paying), at law, is formed is the director’s location ie a nil tax environment…
  • Hence the income – from which the contract of sale is the source – has been/is derived, prima facie, in a zero tax jurisdiction (every time a client buys and you send an email thanking him for payment that concludes as contract of sale at law)
  • An Offshore account (which can/will also be set up to receive card payments via a merchant account) is opened in a nil tax banking centre
  • Customers/clients contract with and pay the IBC; All such monies are banked free of tax in the first instance
  • You or your local company would/could be contracted by the IBC to manage sales/delivery of product/website maintenance/whatever
  • (If you need a regular income) You would invoice the IBC periodically (eg monthly) for this service which income would be assessable income in your home state – though a smart Tax Accountant should be able to assist you to claim a series of expenses against this income (eg home office, equipment, travel, phone/internet/utilities etc) to significantly reduce the amount of tax payable on this income
  • Ideally once you start to grow you and to add substance you would be wise to set up your MD/Board and or a sales team to take orders and receive income in a low tax onshore environment (eg Hong Kong, Ireland, Singapore, Cyprus etc as per the Amazon/Google model).


As alluded to, in order to minimise the chances of the IBC being taxed onshore, ideally, the IBC should/would be (and be seen to be) managed and controlled from Offshore. How this can be achieved is by including a Nominee Director as part of the Corporate structure. For details of how that can work click on these links:


Ideally – so you can swear on oath in the event of a tax investigation, law suit or regulatory inquiry – I am not the beneficial owner of this Company, (which could get you around what might otherwise be a substantial tax or legal liability eg imprisonment for tax evasion) you will want to set up a Private Foundation to act as the shareholder of your IBC. (This should also assist you to get around CFC rules ie if you live in a country which has such regs).


With a bespoke legal/admin structure in place you should only be liable to declare and pay tax on income paid to you by the company (and/or on any distributions paid to you by the Foundation); The rest of your Online sales earnings you should be able to bank, and or invest, Offshore in a nil tax environment.


Similarly, if a product that you sell doesn’t perform and a customer tries to sue you the good news is your personal assets should not be at risk as the customer has contracted with a limited liability Company (ie the Company carries the legal risk, not you personally). Moreover, having your business incorporated Offshore in a foreign/strange land is of itself a deterrent. (Have you ever tried to sue/get money out of an “Offshore” Company? It’s the Litigation Lawyer’s equivalent of climbing Mount Everest!)


Local laws can have an impact. Hence you should seek local legal/tax/financial advice before committing to set up an IBC for such purposes.


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



How To Use a Tax Free Offshore Company to Trade Currencies

The impact of the Corona virus pandemic has sent markets into a state of turmoil the world over and has seen certain countries’ currencies weaken whilst others strengthen.


Such turbulence presents opportunities for professional currency (forex) traders.


If that’s your chosen field, you’ll be pleased to know that Currency Trading is an activity which lends itself well to an Offshore Corporate Structuring (Tax Minimization) Plan.


To summarise how it would work is:


  • You set up a zero tax International Business Company (“IBC”)
  • The Company is set up with a (nil tax jurisdiction based) “Nominee” director and with an Offshore “Office” (ie in a nil tax jurisdiction/the country of incorporation)
  • The IBC opens an account with a Forex Broker
  • You are appointed as the IBC’s authorised trader or Trading Manager (ie the Director delegates to you the power to place/responsibility for placing the buy and sell orders on behalf of the Company)
  • All legal contracts/agreements (eg Brokerage Contracts) are signed, and all board meetings take place Offshore ie in a/the nil tax jurisdiction wherein the Company and or the Nominee Director is based.
  • Ideally you would provide the Director with some kind of monthly Trading (ie buys and sell records) report.
  • The Director ratifies/confirms all trades placed by you at the end of each Trading month
  • (with this admin system in place) For source of income purposes the IBCs trading profits are seen to be generated by calls made ultimately by the Nominee Director ie in a nil tax environment, tax free/offshore
  • When you need some living/spending money the IBC could pay you a wage, or consulting fees or a commission eg a percentage of trading profits generated (or could provide you with a tax free loan ie to assist with asset/investment purchases, see below)
  • That living/spending money can be paid to your local bank account (which means it would be assessable income wherever you are ordinarily resident for tax purposes though you should also be able to claim a sizeable amount of allowable deductions eg for home office, car, equipment, insurances, travel, stationary etc etc to reduce the amount of your “taxable” income at home)
  • If you don’t want the authorities to know how much money you are earning by way of wages potentially you could use an anonymous ATM or Debit/VISA card to withdraw your wages from an Auto Tele Machine (though technically – unless it’s documented as a draw down on an overdraft/loan from the Company – that would be classified as income for tax purposes ie reportable)
  • You could also potentially draw down money from the Company tax free by way of loan or have the Offshore Company (or a subsidiary thereof) buy your investments (ie to avoid you having to receive money directly from the Company – which would likely have tax consequences).
  • The majority of trading profits would be banked and or reinvested Offshore potentially tax free.


AND if you live in a country where the trading of forex is heavily regulated (eg The USA)  an Offshore Company can get you access to Brokers outside the your home country which offer much better trading terms/conditions (particularly in regards to leverage) than what you can get at home.


AND because a high percentage of our client base are professional forex traders we know and can introduce you to a wide range of quality Brokers (including Brokers who will accept as customers Offshore Companies set up and or owned by US persons).


Note:- to ensure that your name isn’t recorded in the Company registers as “beneficial owner” (and to get around CFC rules, should you live in a country which has them) ideally you would also set up a Private Foundation to act as shareholder of the Company.


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