Are you planning to launch a start up being a marketplace where buyers and sellers sell NFTs (Non-Fungible Tokens). If so you might want to incorporate your business “Offshore”.
First up what is an NFT?
A non-fungible token (NFT) is a unit of data stored on a/the Blockchain that certifies a digital asset to be unique and therefore not interchangeable. NFTs can be used to represent items such as photos, videos, audio, and other types of digital files. While copies of these digital items are available for anyone to obtain, NFTs are tracked on blockchains to provide the owner with a proof of ownership. Different Blockchains now support NFTs (the most common is Ethereum) but each works to ensure that the digital item represented is authentically one-of-a-kind.
More and more savvy investors in particular rare Art Collectors are now looking to buy/include NFTs as part of a diversified asset/investment portfolio.
As I see it such an Online based NFT Marketplace Operation lends itself well to an “Offshore” Corporate Structuring Plan. In principle here’s how it would work:
- A nil tax offshore company (commonly an International Business Company “IBC”) is incorporated with an “Offshore” management system in place – which would entail deploying a nil tax jurisdiction based Nominee Director (and ideally a Private Foundation ie to act as shareholder)
- You are appointed (via a Consultancy Contract) by the Company to manage the business or certain/key aspects of it (see below)
- A website is created and tailor-made software developed – the IBC will be the owner of this website and the software and all the hardware required to run it
- The IBC owns/operates the business (eg ownership of the web-domain and the website/artworks or trademark/s or any sole distributor rights are held by or transferred to the IBC)
- An Offshore account (which received payments via a merchant account) is set up in a nil tax banking centre
- Ideally the website server is located in a country which does not tax businesses/companies on the basis of server location
- Customers contract with and agreed to pay the IBC a commission on all sales concluded as a consequence of buyer/seller introduction enabled by the site
- All such contracts are signed Offshore ie in a nil tax environment by the Nominee Director
- All such monies are banked free of tax in the first instance
- You or your local company would be contracted by the IBC to manage sales/delivery of product/website maintenance/whatever.
- 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 expense against this income (eg home office, equipment, travel, phone/internet/utilities etc) to significantly reduce the amount of tax payable on this income.
- The remainder of the income would be banked and or invested offshore potentially tax free
Would you like to know more? Then please Contact Us:
info@offshorecompaniesinternational.com
DISCLAIMER: OCO Ltd are not Tax advisers or Legal Advisers. You should seek local tax, legal and financial advice before committing to set up an Offshore Corporate or Fiduciary Entity.
