June | 2023 | Offshore Companies International

Samoa International Business Companies

Samoa (formerly Western Samoa) is a group of lush tropical islands in the middle of the South Pacific, located approximately halfway between Hawaii and Sydney Australia, is 2,842 sq. km in size and with a population of circa 215,000. The legal system of Samoa is based on English Common Law and includes a sizeable body of New Zealand statute law, on account of New Zealand having administrative power over Samoa prior to independence. Whilst local Polynesian is the predominant first tongue English is the language of Government and Commerce.

The Samoan International Companies Act passed in 1987 provides for the incorporation of Samoa international companies, the redomiciliation to Samoa of existing companies, and for the incorporation of U.S. style limited life companies. With a solid Corporate Law, a history of political stability since independence and a sophisticated international satellite telecommunication system Samoa is a popular location for incorporation of tax free International Business Companies.

Feature and Benefits of Samoan International Companies Include:

• Nil Corporation or Business Tax is levied

• Chinese character names may be registered.

• Chinese character memorandum and articles of association may be filed.

• An international company is not required to have a share capital (“Creditor Controlled” companies).

• There is no minimum share capital requirement or capital duty on share capital.

• Redemption of shares and reductions of capital can be effected simply and quickly and without the necessity of a court order.

• A company may finance the purchase of its own shares.

• A company may repurchase and cancel its own shares.

• Company registration may be for periods of one, five, ten or twenty years in advance, with discounted fees (annual registration renewals are due on 30 November).

• In the absence of a public offer, shareholders can resolve not to have the accounts audited and not to hold annual general meetings.

• Annual returns do not have to be filed.

• Only one director and one shareholder is required.

• Particulars of directors and secretaries do not have to be filed.

• Accounts do not have to be filed.

• Provision can be made for alteration of the memorandum and articles of association by directors’ resolution.

• Meetings may be held by telephone, closed circuit television or other audio or audio-visual means.

• Annual meetings are not required, but if held, need not be held in Samoa.

• Directors’ and shareholders’ resolutions may be passed by circulating written resolutions (including facsimile copies) for signing.

• An international company need not have directors resident in Samoa.

• The use of a common seal is optional for execution of documents.

• The Companies office is subject to strict confidentiality provisions.

• Companies can be redomiciled into or out of Samoa.

• Companies can be liquidated. There is also a straight forward striking-off procedure.

• Speedy Incorporation – 2 to 3 days max

• Has not signed Tax Information Exchange agreements with either the US or the UK (and only with no EU members save for The Netherlands & Ireland)

Samoa Companies Accounting Records Compliance Requirements

Every company incorporated in Samoa is required to keep and maintain financial records:

(a) to disclose the current financial position of the Company;

(b) to enable the directors to check that any accounts prepared by the Company comply with the laws of Samoa;

(d) to detail the following;

(i) all sums of money received and expended and the matters in respect of

which the receipt and expenditure takes place;

(ii) all sales and purchase and other transactions; and

(iii) the Company’s assets and liabilities, or other arrangements; and

(e) for a period of at least 7 years from the completing of the transactions or

operations to which they relate.

Additionally, the Company must inform its Samoa Registered agent in writing of the location where the accounting records are to be kept.

OCI SAMOA COMPANY INCORPORATION SERVICES

At OCI we believe in giving you more for your money than would the average IBC formation service. Hence included in the incorporation package for your Samoan Company is the following:

SERVICES:

• Unlimited name availability inquiries

• Advice from an experienced International Lawyer on how to structure your company

• Preparation (overseen by a lawyer) of application to incorporate the company

• Preparation (overseen by a lawyer) of the company’s memorandum of association

• Preparation (overseen by a lawyer) of the company’s articles of association

• Attending to filing incorporation request with the company registry

• Attending to payment of government filing fees

• One year’s Registered Agent service in the country of incorporation

• One year’s Registered Office service in the country of incorporation

• Mailing address in the country of incorporation

• Delivery of Incorp pack by international courier (ie DHL/Fedex/TNT etc)

• Unlimited free legal consultations for 12 months

DOCUMENTS INCLUDED IN YOUR INCORP PACK:

• Certificate of incorporation

• 2 sealed/stamped copies of the company’s Memorandum of Association

• 2 sealed/stamped copies of the company’s Articles of Association

• Resolution appointing first director/s

• Resolution appointing first shareholder/s

• Up to 5 share certificates

• Resolution to open a bank account

• Resolution to rent an office

• Resolution/s to engage a Phone, Internet & Website service provider

• Resolution to hire a staff member/s

• Resolution to appoint a company lawyer

• Resolution to appoint a company accountant

• Resolution appointing you as the company’s authorised business representative

• Resolution issuing a Power of Attorney in your favour

• Agreement authorising you to represent the company in commercial negotiations

• Power of attorney authorising you to sign documents on behalf of the company

• Register of directors

• Register of shareholders

• Expression of wishes (ie an “Offshore” Will)

• Lawyer authored User Guide (“How to Use Your Offshore Company”)

Price (all inclusive): $US 1,500

With tax effective offshore company management (ie including Professional Corporate “Nominee” Director, Shareholder & Company Secretary): + $800

From 2nd year $US $US990 (+ nominees if required)

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

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

DISCLAIMER: OCI is a Company/Trust/LLC/LP/Foundation Formation Agency. We are not tax advisers or legal advisers. You are advised to seek local legal/tax/financial advice in regards to your local reporting/tax requirements before committing to set up or use an Offshore Company or other entity.

HOW TO SET UP AN ONLINE BASED SERVICES BUSINESS “OFFSHORE”

Do you offer and deliver services online and or to an International Clientele?

Tax Free Offshore Companies are commonly used to own/operate online businesses.

In principle here’s how it can work:

A nil tax offshore company (commonly an International Business Company “IBC”) is incorporated to own/operate the business
You design/launch a website which is owned by the Offshore Company
The IBC also owns all proprietary items (including also the/any Trademarks, Operating software/systems, soft products to be delivered to customers etc)
The website ideally would be hosted in a nil tax/private Jurisdiction (Iceland is currently the most popular destination for such web hosting, Singapore is also often favoured)
Your 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 may be 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 customers 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 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 services 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 a contract of sale at law)
The Services that your Company has been contracted to provide are then delivered online.
An Offshore account (which can/will also be set up to receive card payments via a merchant account) is opened in a banking centre that does not tax bank deposits or interest paid by banks on bank deposits
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 as tax deductions/write offs against this income (eg home office, equipment, travel, phone/internet/utilities etc) to significantly reduce the amount of tax that would otherwise be payable on this income (Assessable Income less Allowable Deductions = Taxable Income)
Ideally once you start to grow, 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 minimize 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 (nil tax jurisdiction based) “Nominee” Director as part of the Corporate structure. See these pages for details of how that can work:

http://offshoreincorporate.com/faq/should-i-engage-nominees-or-should-i-direct-and-hold-the-shares-in-my-offshore-company/

http://offshoreincorporate.com/faq/how-can-i-protect-my-underlying-ownership-of-my-offshore-company-where-a-nominee-is-engaged-to-act-as-director-or-shareholder/

Ideally – so you can swear on oath in the event of a law suit tax investigation, or regulatory inquiry – I am not the beneficial owner of this Company, you will probably 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).

The end result? With such a bespoke legal/admin structure in place (a) Vultures should not be able to get their claws into any assets/income streams owned by the Offshore Company and (b) you should only be liable to declare/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 Offshore Company’s earnings you should be able to accumulate, and or reinvest, Offshore in a nil tax environment. Tax should only be payable when you sell the business (unless at that time you’re living in a nil tax country) enabling you to grow your capital far quicker during the lifetime of your business thanks to the power of compounding.

Similarly, if a service you provide doesn’t meet a client’s expectations and the client tries to sue you the good news is your personal assets should not be at risk – as the client 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 to potential claimants (Have you ever tried to sue/get money out of an “Offshore” Company? It’s the Litigation Lawyers equivalent of climbing Mount Everest!)

Local laws though 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:

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

How to use a Foundation as a DAO Legal Wrapper

In the Web3 industry, some DAO founders probably (wrongly) assume that if the DAO Treasury is on-chain and its management is carried out by on-chain voting, the DAO won’t require any legal structure. However, in an unregistered DAO, the community of members can potentially be recognized by Regulators or the Courts as an unregistered General Partnership.

At law the Partners in a Partnership are jointly and severally liable for the debts/liabilities of the Partnership. If a DAO is established/operates as an unregistered General Partnership then each member is exposed – ie unlimited legal liability can attach to each member. Consequently, if regulators, tax authorities, or business partners/suppliers have concerns about the legality of certain activities undertaken by the DAO, and can establish the liability of at least one member of the DAO, liability can extend to DAO assets AND to all the Members property/assets ie all the DAO members may be recognized as responsible for the actions (or inactions) of the DAO as a whole.

There are several legal structures one could potentially deploy as a DAO Legal Wrapper. This Article looks at how a Private Foundation might be so deployed.

Foundations – Background

A Foundation is a legal entity in its own right ie it can sued and be sued. To protect proposed DAO members from unlimited liability, savvy Web3 founders often look to the registration of a Foundation as a “legal shield” for DAO members. In case of regulatory investigation, it will act as a “legal representative” for the community of the DAO members and protect them from the risks of unlimited liability.

A Foundation is a 3 headed creature and (like a Company) is a separate legal entity. Unlike a Company however it doesn’t have the typical top-heavy Director focussed hierarchal management structure.

A Foundation:

Is set up by a Founder/s
Is managed day to by a Councillor or a board of Councillors
Is either set up to fulfil a specific purpose or it has nominated beneficiaries ie persons or a class/es of persons who are designed to benefit financially from the set-up/actions of the Foundation

Whilst the day to day decision making responsibilities of a Foundation lie with a/the Councillor/s in the first instance, the beauty of a Private Foundation is that Councillors rights can be reserved to the Founders (and a Founder can assign rights as reserved to him/her to any third party). Hence the Founders of a Foundation can appoint an independent management board but yet control the board by retaining/exercising reserved voting rights.

Functions of a DAO Foundation

As you may know a DAO legal wrapper typically holds the DAO treasury, protects DAO members from unlimited liability, and permits DAO members to vote. A DAO that has been ‘legally wrapped’ is often more attractive to investors as a DAO with a strong legal framework is less likely to face difficulties with issues of liability, non-compliance with regulation, and ineffective treasury management.

All in all, in a DAO structure, a Foundation typically performs three main functions:

It acts as a liability wrapper to protect the DAO members from unlimited liability for the DAO’s activities;
It works as a governance overseer – every Foundation must create a Constitution (commonly known as a Charter) which documents a set of rules governing the Foundation’s operations; and
It acts as a Compliance manager for the DAO Treasury to implement AML etc measures and to supervise their realization in the process of disposing of the DAO Treasury.

Operational Flexibility

Where a Foundation is deployed as a DAO Legal wrapper each member of the DAO can act/be appointed as a Founder and/or as a Councillor of the Foundation (and be nominated as a beneficiary, see below) – delivering voting rights – with voting carried out online via execution of smart contracts.

Management & Control of a Foundation in the first instance lies in the hands of the Foundation Council (& a Foundation which is seen to be managed/controlled onshore can be taxed onshore). A Foundation can have multiple Councillors or just one councillor. In cases where a/the DAO Foundation is looking to turn a profit – and members wish to preserve tax planning possibilities – a “Nominee” Foundation Councillor (ie resident in a nil tax jurisdiction) could be deployed and the DAO members appointed via contract as the Foundation councillor’s investment advisers. Members would vote on any proposed activity and the result of that vote would be tendered to the Councillor/s – who could be required by the Foundation’s Constitution/Charter to only make financial decisions based on such advices.

More particularly, if the DAO structure is reasonably straight forward (and, again, if the DAO is looking to generate a profit) then you should be able to use a Foundation wherein the governance token holders are nominated as a class of beneficiaries. In this case the members would have to agree to abide by the DAO constitution and operating rules which will in effect “marry” the corporate structure with the DAO operations.

In our experience historically Caymans Foundation Companies have commonly been deployed as DAO Legal wrappers. However, with the advent of restrictive VASP rules in the Caymans lately we are seeing Panama and Seychelles Foundations being commonly deployed to act as DAO Legal wrappers.

For detailed information in regards to Seychelles and Panama Foundations check these Links:

https://offshoreincorporate.com/seychelles-foundations/

https://offshoreincorporate.com/panama-tax-free-foundations/

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

www.offshoreincorporate.com

info@offshorecompaniesinternational.com