UK LLPs: A Detailed Overview

Limited Liability Partnerships (LLPs) were introduced by the LLP Act 2000 and were the first new UK legal entity for nearly 100 years. They were intended for use by the larger professional practices but have already been utilized by a wide variety of businesses.


Tax Transparency


LLPs are not liable to income tax, corporation tax or capital gains tax on their profits and gains. Instead, the members of the LLP will each be taxed on their share of the profits or capital gains (including profits retained in the LLP). Thus the LLP business itself is “tax transparent”.


Body Corporate


Although an LLP will be taxed as though it is a partnership, it is in law a “body corporate” with a separate legal personality from that of its members. This means that, unlike a conventional partnership, an LLP can enter into contracts and hold property in its own right. LLPs will also be able to continue in existence independent of changes in membership. Additionally, there is no need for a small number of members to act as nominees for all of their fellow members and the firm. LLPs need to be registered at Companies House in the same way as limited companies. They will receive a registration number and will be obliged to file annual accounts. Subject to exemptions for dormant LLPs and small LLPs, the accounts must be audited on a “true and fair” basis, in just the same way as limited companies.


Limited Liability


As the name suggests, LLPs offer “limited liability” to all of their members. This is the same as applies to shareholders of a limited liability company. It means that (subject to two exceptions – see “Unlimited liability” below) on the insolvency of an LLP, each member’s liability extends only to the amount that the individual has contributed to the LLP by way of capital. In the same way as the liability of a shareholder in a limited company extends only to the amount he or she has contributed by way of share capital. Thus creditors have no recourse to members’ personal assets. Also, as in a limited company, persons who have made loans to LLPs will be treated as general creditors unless the loans were secured. Provided it is the LLP that enters into contracts with third parties, it will be the LLP that is generally liable for all debts, obligations, wrongful acts and omissions. The funds available to meet such liabilities will be limited to those within the LLP.


Unlimited Liability


For LLPs there are two important exceptions to the basic concept of limited liability:


  • If a member has accepted a personal duty of care to a third party and has acted in breach of that duty of care then the member will be personally liable. Similarly, if a member has accepted a personal contractual commitment and has acted in breach of that commitment, they will be personally liable to an action in tort in connection with the negligent work, etc. This position is no different from directors of a limited company who can become personally liable if they accept personal duties or commitments;
  • Members might also have additional liabilities in the event of an LLP becoming insolvent if the “clawback” rules are in point.




All payments made by the LLP to members, by way of drawings, profit shares, repayment of capital and repayment of loans, constitute withdrawals of money by members from the LLP.




This term refers to the possibility that if an LLP becomes insolvent, then any “withdrawals” from the firm by any member in the previous two years are potentially vulnerable to a claim that they should be repaid. However, such a claim will only succeed if it can be shown that the member in question either:


  • knew that there was no reasonable prospect of avoiding insolvent liquidation at the time of the withdrawal; or
  • should have known, or ought to have concluded, that there was no reasonable prospect for avoiding insolvent liquidation.




LLPs will be “incorporated” and registered at Companies House by following a procedure similar to that for limited companies.


Members’ Agreement


LLPs will normally be governed internally by a formal agreement between the members. There is no legal obligation on the members of an LLP to approve a “Members’ Agreement”.


The written Members’ Agreement can provide virtually anything that the members want it to in relation to how the LLP will be managed, how decisions relating to the LLP will be taken, how profits will be distributed and how capital will be contributed. As the LLP is a body corporate with a separate legal personality from its members, the agreement should also define the duties owed by members to the LLP, by the LLP to the members, and by the members to each other.


The Members’ Agreement will be a private document between the members and need not be filed at Companies House.


If the members of an LLP do not have an agreement between them as to how the LLP shall be operated, various default provisions apply under the LLP Act. However, these are extremely brief and unsatisfactory. For example, they provide that members will share profits equally irrespective of capital contributions to the LLP and that no member may be expelled for any reason.


Anti-avoidance Provisions


The Government is keen to prevent any potential tax loss through the use of investment and property investment LLPs. The main thrust of the provisions relating to LLPs, is to discourage tax exempt vehicles and funds from using LLPs for property investment activities.


Taxation Overview


LLPs are in law regarded as “bodies corporate” and will be subject to aspects of company law. But for tax purposes they will generally have the same tax transparency as conventional partnerships.


The LLP Act 2000, introduced various changes to the Taxes Acts. These changes were intended to ensure that where an LLP carries on a “business with a view to profit” then its members will be treated for the purposes of income tax, corporation tax and capital gains tax as if they were partners carrying on business in partnerships. That is to say, the LLP will be regarded as transparent for tax purposes and each member will be assessed on their share of the LLPs income or gains.


International Issues


Because an LLP is a “body corporate” an overseas branch of an LLP may well be taxed as a corporate entity in certain overseas countries. The Inland Revenue has confirmed that it will be for the relevant overseas tax authority to determine how the LLP and its members are to be taxed locally. However, the Inland Revenue has confirmed that it will be prepared to allow UK-based members to claim a double tax credit for their proportionate share of overseas corporate tax paid, when computing their UK income tax liability on the same income.


For UK tax purposes, dividends received by an LLP will be deemed to have been received directly by its members. This means that where foreign dividend income arises it will be the individual members that need to consider the relevant double tax agreements. Thus it will normally be the withholding tax limits applicable to individual members that will apply, such that there will be no relief (as there is for companies) for locally paid underlying corporate taxes.


The position will be similarly complicated for non-UK resident members of an LLP if the members’ country of residence considers the LLP to be a corporate body for local corporate taxes. In such cases it may regard profit distributions made to the members as dividend distributions and deny tax credit relief for any taxes paid by them in the UK (where the LLP is carrying on its trade or profession). Such income tax may be considered to have been payable by the LLP and thus a form of underlying tax, in respect of which the members are not entitled to claim credit overseas.


A UK LLP can be incorporated with wholly non-resident members and unless that LLP trades, or holds investments in the UK, its members should have no UK liability on their share of the LLPs profits. However, that could mean that the LLP would have no UK taxable presence and thus its commonly recommended that every LLP has at least one UK resident member, paying tax on its share of profits in the UK.


Cessation of LLP


Where an LLP comprises of only two members and one of them dies, for example, another member will need to be appointed within six months, or the LLP will be dissolved with the tax consequences following as set out below.


Technically, whenever an LLP ceases to carry on a trade or profession it will no longer be regarded as a “partnership” for tax purposes. Instead it will cease to be transparent and should become liable to corporation tax.


Strictly, corporation tax would be due on gains made at the LLP level after it ceases to trade, with capital gains tax being due on gains members’ make when they “realise” their interests on liquidation. This is the same as the double taxation which arises where valuable assets are held within a corporate structure.


However, where members wind-up the LLPs affairs informally without undue delay and where tax avoidance is not a motive, the Inland Revenue will treat the LLP as remaining tax transparent. Thus, where there is a gradual disposal of assets and settlement of debts with the liquidator appointed only for the final formalities, the prospective double taxation can be avoided.


However, once a liquidator is appointed, chargeable gains on the disposal of any of the LLPs assets by the liquidator will be computed by reference to the date on which they were first acquired by the LLP and their cost at that date. In the liquidation period, the LLPs capital gains would be treated in precisely the same way for tax purposes as those for any other body corporate. Similarly, members of the LLP will be taxed on any gain (or given relief for any loss) that arises on the disposal of their capital interests in the LLP.


The base cost of members’ capital interest will not be set by reference to the market value of that interest at the time when transparency is lost. Instead the allowable acquisition of each members’ interest will be determined according to the historical capital contributions made, as if the LLP had never been transparent.




If you’re considering incorporating anil tax  Company Offshore but don’t want the stigma that can sometimes be attached to the use of classical Tax Haven Companies (eg BVI, Seychelles, Belize etc IBCs) then the UK model of LLP is an entity well worthy of close consideration.


OCI can set up a UK LLP for as little as $800 (and Nominee Members/Partners can also be supplied).


Warning: OCI are not tax advisers or legal advisers. Local laws can have an impact. Hence you should seek local legal/tax/financial advice before committing to set up a UK LLP.


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



Panama Second Residency Visas

This week we continue our examination of the options available to you if you’re looking to establish residency or a residential address outside of your usual country of abode.


A quick recap…


So why might somebody wish to have a second residence?


There are a number of valid reasons as to why someone would want to secure residency entitlements in a second country including:


  • As insurance against political, economic or social upheaval in the person’s historical home country
  • To make international travel simpler (eg Depending on where you are from if you hold a passport that is considered “problematic” by the country you intend to visit entry VISAs, even for holiday visits, can be very hard to come by)
  • As a vehicle to enable you to avoid being discriminated against (ie by virtue of your country of origin)
  • To enhance employment prospects outside of your home country
  • To avoid the risk of potentially hostile treatment by Government officials, kidnappers and hostage takers
  • To access new opportunities for the tax structuring of one’s personal or corporate tax affairs. (Generally, an individual’s residence and citizenship are the ultimate basis for the majority of taxation rulings)
  • For enhanced privacy – Modern day information sharing protocols make it possible for your local authorities to be automatically informed by “reporting entities” (ie banks, asset managers etc) if you hold certain assets outside of your home county. In such instances information is usually only shared with the country which appears as your home state in the proof of address document you provide to your non local Bank/Asset Manager
  • Citizens of certain countries are subject to tax on their worldwide income, regardless of where they may be residing. By relinquishing one’s current passport/citizenship and taking up a new one such persons might be able to take advantage of residence-linked tax planning opportunities that would otherwise be beyond access.


Panama has one of the strongest histories in terms of offering second residency programs. For some time it has offered what is known as The Panama Pensionado Visa which allows foreigners to obtain legal residency in Panama under the condition that they have a pension income (of minimum $1,000 per month) guaranteed for life.


A recent addition to its offerings is the Friendly Nations Visa.


With the Panama Friendly Nations Visa there is nothing to invest midterm or long term, you just need to:

(a) create a company in Panama where you will be the President and Shareholder and claim that it will be used for professional services in Panama; and

(b) open a bank account in your name. (This bank account would have to be funded with a minimum of $5,000.00. If there are dependents that will apply with the main applicant, then $2,000.00 per dependent needs to be added).


Most of the bank account opening process can be done without you needing to visit Panama, so we can advance 90% with that and, once you arrive in Panama, finalize everything so that the account is opened in approximately 2 weeks.


You will need to travel to Panama at least twice.


On the first trip you will need to meet the bank and finalize the account opening, sign the power of attorney empowering us for the purpose of filing the application and have your passport registered with the Immigration Service.


Once the bank account is open you will need to send funds to activate the account and request the bank for a letter of reference and/or a statement of account stamped by the bank and then start the process of incorporation of the company (takes roughly 5 days to incorporate a company). The account would need to be funded with $5,000.00 and $2,000.00 extra per dependent if such is the case.


If you’re able to stay in Panama for this whole time, we can file the application right away and obtain the provisional residence permit and multiple entry and exit permit (this last one is necessary to leave the country while the visa is being processed as otherwise upon the return of you can be penalized with a fine of $2,000.00).


On the second trip, ie once the Visa is approved, you will need to travel to Panama to get your permanent resident card.


Our legal fees are $7,000.00 for the main applicant, plus $1,000.00 per dependent. The fee includes the company formation.


The approximate expenses are:

  • $1,690.00 for main applicant and $1,300.00 per dependent. (Children under 12 years of age are exempt of the repatriation deposit of $800.00);
  • Our legal fees for the attainment of the Multiple Entry and Exit Permit is $500.00 (per applicant) + $200.00 (per applicant) in costs payable to the Immigration Service.


To open the account, you will need to travel to Panama and meet the bank, plus bring with you the following documents:

- Reference letter from a bank

- Reference letter from a lawyer, accountant or other professional

- Reference letter from a business partner

- Copy of your entire passport (the bank will make a copy)

- Copy of a secondary ID such as a driver’s license

- Proof of income, which can be provided in the form of payment stub from your current employment or by submitting the last three tax returns you have filed.


These documents can all be submitted in English.


For the Visa, it is imperative that you have the bank account, so after the bank account is opened we can move forward with the Visa. 


The documents each applicant needs to bring with him/her for the Visa are:

- Valid passport

- Police record issued by the FBI, RCMP or equivalent authority in your country (except children under 18)

- Marriage certificate (applicable if legally married and spouse is applying as dependent of main


- Birth certificate (applicable if children of the applicant under 18 years of age are applying as dependents of the main applicant).


The rest of the documents can be obtained in Panama, including the Declaration form of personal background information.


Any and all documents issued abroad have to be legalized by means of a Panama Consulate or via Apostille and duly translated to Spanish.


Translations prepared abroad would also have to comply with the legalization via Consulate or be Apostilled.


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





Last week we began looking at reasons why people obtain, and various ways that one might apply for, a “Second Residence” outside of one’s normal place of abode, beginning with the Nevis Citizenship Program.


This week’s feature article looks at how one might go about obtaining the right to reside permanently (ie obtain a second residence VISA) in the United Arab Emirates (“UAE).


There are two options whereby an Entrepreneur or Investor can obtain residency rights in the UAE:


  • By setting up a (particular kind of) company
  • By purchase of real estate


We can offer you a number of free zones where you could register company in UAE. The most popular options is to register a Company in the Umm Al Quwain FZ.


Company registration in UAQ FZ with Flexi Desk (including 2 Visas)


Re the business activities of the company, you can simply choose from the below list (as updated from time to time by the Registrar of Commercial and Consultancy Activities) and following incorporation of the Company 2 Residency VISAs can be obtained:



There are two types of license, which fall under this category: Commercial License and General Trading License.


Commercial License: This authorizes the import, export, distribution and storing of items specified on the license. A Commercial License can have three different product lines or 10 similar product lines.


General Trading LicenseThis enables the licensee to trade in a wider range of activities and gives the freedom and flexibility to trade in any commodity, which is permitted within the UAE.
Note: Commodities which require special approval or clearance from various UAE authorities e.g. explosives and armaments cannot be traded with a General Trading license.


Usual activities include i.e. Trading with Automobiles, Seeds Trading, Coal & firewood trading, cotton and natural fibers trading, etc.



This is for entities, which offer expert or professional advice, and is issued to all manner of professionals including artisans and craftsmen. It allows two similar activities.


Activities usually registered include Marketing Consultancy, Management Consultancy and IT Consultancy.



This allows an individual to operate as a freelance professional, and conduct business in one’s birth name as opposed to a brand name or company. The Freelance Permit is designed for individuals who operate in technology, media and film sectors, and is issued to talent roles, creative roles and selected administrative roles.


Activities usually registered include Actors, Artists, Photographer and Producer.



This enables the licensee to import raw materials, then manufacture/ process / assemble / package the specified products, and export the finished product. It allows the holder to import raw materials for the purpose of manufacturing, processing and/or assembly of specified products.



This license is for service providers. It permits the licensee to carry out the services specified on the license within the Free Zone, such as Logistics; Courier Services; Insurance Service Provider; Travel Agency; Tour Services; Car Rental etc.


Tax Residency


An Umm Al Quwain FZ Company can issue residence permits and obtain a tax residence certificate from the UAE authorities for its foreign owners and executives. A FZ company, must have physical presence in the UAE and, in that respect, it must own or hire premises.


Private accommodation is not necessary for Umm Al Quwain Free Trade Zone Authority when applying for residence but many do this to reinforce their case for substance and legitimacy.


As far as the company is concerned, it must have physical presence in the UAE. In that regard, cost effective options are proposed by free zones situated in a number of emirates including Umm Al Quwain Free Trade Zone (UAQ FTZ). Usually, these options consist of “flexi desks” or “flexi offices”. (The below quote assumes the Company will uptake the Flexi Desk option).


Furthermore (if a local bank account is maintained with movements), the foreign owners and executives can apply to the UAE Ministry of Finance to receive UAE tax residence certificates.


A UAE residence permit and a tax residence certificate can be useful to foreign owners and executives who wish to register their tax residency in the UAE. It is worth noting, that banking institutions in UAE and many outside consider UAE tax residence certificates as sufficient proof of tax residency in the UAE.


To obtain such a permit would costs circa (including bank ac setup) $US11,000 and from 2nd year circa $6,500.


Residency via the purchase of UAE real estate


  • In this case a residence VISA of 3 years minimum duration can be obtained via the purchase of real estate in Dubai or other Emirates in the UAE
  • The cost of real estate property in order to be able to obtain a resident visa must be – from 1 million dirhams (AED) per person or family. This means that if a house is bought by a husband and wife, then the cost must be at least 1 million dirhams. If the buyers are people who are not connected by family ties, then – 1 million dirhams (AED) for each person in one facility or for each separate facility worth at least 1 million AED.
  • Buyer’s age can be up to 60 years. If you are over 60 years old, then you will need to obtain special approval allowing you to obtain a resident visa.
  • Accommodation must be located in a completed building. Buying real estate property in Dubai during the construction period (ie “off the plan” projects) does not give one the right to obtain a residency permit in the UAE until the completion of construction work and the commissioning of the project.
  • After purchasing real estate property and obtaining a resident visa, the owner can provide property for rent.
  • The property can only be a Residential property. Purchase of a commercial property does NOT entitle the Investor does to obtain a UAE resident visa.
  • Resident visa, obtained upon the purchase of an apartment, is issued for 3 years with the possibility of extension.
  • To obtain a resident visa, the property owner must prove a monthly income average amount of min USD 2,860.
  • The cost of obtaining 1 resident visa at the Immigration Department of the Dubai Land Department for an investor is: from USD 6,300.


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


Nevis Second Citizenship Program

Given the inherent limitations that a single residency/passport can have on one’s lifestyle, freedom and financial future savvy investors, retirees and entrepreneurs the world over are becoming ever more aware of the potential rewards that holding a second passport/residency can deliver.


There are an ever-expanding number of jurisdictions now offering a second residency/passport options. Each of those will be canvassed over the course of the coming weeks in this Blog site. The purpose of this Article today meanwhile is to examine the second residency/passport options currently on offer from the picturesque Caribbean (dual) island Federation of St Kitts & Nevis.


Saint Kitts and Nevis – Overview


Saint Kitts and Nevis (officially known as the Federation of Saint Christopher and Nevis or “SKN”) is an island country in the West Indies. Located in the Leeward Islands chain of the Lesser Antilles, it is the smallest sovereign state in the Western Hemisphere, in both area and population. The country is a Commonwealth realm, with Elizabeth II as Queen and head of state (it gained its independence from Great Britain in 1983) and is the only federation in the Caribbean. SKN boasts a high degree of political stability, stunning natural scenery/beaches and an enviable tropical climate; Its primary economic pillars include Tourism (mainly Cruise ship visits) Agriculture, Commercial Fishing and Financial Services.


St. Kitts & Nevis permits foreigners to obtain the status of a St. Kitts & Nevis citizen by means of a government sponsored Citizenship-by-Investment program. Established in 1984 following decades of stagnant to negative population growth (many young people move to the bigger islands or the US upon finishing school), the St. Kitts’ citizenship program is the oldest remaining economic citizenship program of its type in the world. Notwithstanding its age, the program began to truly rise in prominence from around 2006 when the program was restructured to allow donations to the country’s sugar industry as the basis for residency/citizenship entitlements.


Further amendments to the program in 2020, post Covid (see below) have seen the Nevis citizenship by investment rise substantially in prominence.


Advantages of Holding a Second Passport?


There are a number of valid reasons as to why someone would want to secure residency entitlements in a second country including:


  • As insurance against political, economic or social upheaval in the person’s historical home country
  • To make international travel simpler (eg Depending on where you are from if you hold a passport that is considered “problematic” by the country you intend to visit entry VISAs, even for holiday visits, can be very hard to come by)
  • As a vehicle to enable you to avoid being discriminated against (ie by virtue of your country of origin)
  • To enhance employment prospects outside of your home country
  • To avoid the risk of potentially hostile treatment by Government officials, kidnappers and hostage takers
  • To access new opportunities for the tax structuring of one’s personal or corporate tax affairs. Generally, an individual’s residence and citizenship are the ultimate basis for the majority of taxation rulings
  • For enhanced privacy – Modern day information sharing protocols make it possible for your local authorities to be automatically informed by “reporting entities” (ie banks, asset managers etc) if you hold certain assets outside of your home county. (In such instances information is usually only shared with the country which appears as your home state as noted in the proof of address document as provided by you to your non local Bank/Asset Manager)
  • Citizens of certain countries are subject to tax on their worldwide income, regardless of where they may be residing. By relinquishing one’s current passport/citizenship and taking up a new one such persons might be able to take advantage of residence-linked tax planning opportunities that would otherwise be beyond access.


What Does a St Kitts & Nevis Passport Offer?


  • Applicants do not need to travel to St Kitts & Nevis for the application and there are no annual residency rules to maintain the passport.
  • A single application can include children up to a maximum age of 30 and parents with a minimum age of 55.
  • New fast track processing enables receipt of a St Kitts & Nevis passport in 45 days (usual time is 3-4 months).
  • Passport holders enjoy full Schengen privileges and can travel to approximately 120 countries worldwide, either on a visa free, or visa on entry basis. A visa is not required to visit the UK.
  • If holders of the passport choose to move to St Kitts & Nevis there is no personal income tax, no gift tax, no death duties, no estate tax, no inheritance tax and no capital gains tax on worldwide income.
  • The passport allows the holder to reside in other Caribbean Community countries (Caricom) if they wish to do so. There are 15 Caricom member states.


St Kitts & Nevis Citizenship by Investment Options


Currently there are three investment routes available for persons looking to take out SK&N Citizenship:


  1. Contribution to the sustainable growth fund
  2. Approved property development
  3. Luxury Real Estate Purchase


Sustainable Growth Fund (SGF) Contribution


  • A single applicant must make a contribution of US$150,000 to the Sustainable Growth Fund (SGF).
  • For families looking to obtain SK&N Citizenship (usually, see below), the contribution for a family (of up to 4 persons) is US$195,000.
  • For additional dependants (ie over 4), regardless of age, the contribution requirement is US$10,000 per dependant.


NEWS FLASH: The St Kitts & Nevis Government have announced, for applications lodges between 1 July 2020 and 15 January 2021, that the citizenship contribution for a family of four has been reduced from US$195,000 to US$150,000 per family.


Approved Property Development


In this category the applicant must invest a minimum US$400,000 in an approved property development. AND the property must be held for a minimum of 5 years after citizenship has been granted.


A registration fee is payable by the applicant and additional fees are required for the spouse, children under the age of 18 and additional family members over the age of 18.


If this route is selected, OCI can help source management services for the property, which can be sold on after 5 years.


NEWS FLASH: The St Kitts & Nevis Government have announced, for such purchases made between 1 July 2020 and 15 January 2021, that stamp duty has been reduced from 10% to 2.5%.


A registration fee is payable by the applicant and additional fees are required for the spouse, children under the age of 18 and additional family members over the age of 18.


Luxury Real Estate Purchase


With this category citizenship can be obtained if you invest a minimum US$200,000 in new luxury real estate. AND The property must be held for a minimum of 7 years after citizenship has been granted.


NEWS FLASH: The St Kitts & Nevis Government have announced that between 1 July 2020 and 15 January 2021, stamp duty for such purchases has been reduced from 10% to 2.5%.


A registration fee is payable by the applicant and additional fees are required for the spouse, children under the age of 18 and any additional family members over the age of 18.


Dependants & Citizenship by Descent


Dependants outside of the normal parent child gamut are also catered for:


  • Unmarried, dependant children who are older than 18 but younger than 30 may be included in your Citizenship application.
  • If you have dependant parents aged 55 or above they may also be included.
  • Citizenships so obtained can be passed on to future generations by descent.


Fast Tracking


As regards any/all of the above 3 SK&N Economic Citizenship routes the application process will take 3-4 months. BUT If you’re willing and able to pay an additional US$46,000, however, your application can be fast-tracked, meaning your passport will issued in approximately 45 days’ time.


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


How to use a Foundation To Fund a Crypto Token Offering or ICO

Private Foundations are increasingly being used Internationally as the preferred fund-raising vehicle for entrepreneurs looking to (a) launch ICOs or (b) to develop/sell Crypto tokens. The purpose of this Article is to examine how Foundations are typically being used in such instances (and to look at possible commercial alternatives)


So first up…  What is a Foundation?


A Foundation is a legal entity set up by a person called a Founder (like a Settlor in the case of a Trust) which is managed day to day by a person called a Councillor (akin to a Trustee in the case of a Trust but more like a Company Director in terms of duties/responsibilities).


There are in essence two types of Foundation:


(a)  Foundations with beneficiaries

(b)  Purpose Foundations


Type (a) is the more traditional model ie where an entrepreneur or investor sets up a structure which is designed to hold/manage assets for the benefit of 3rd parties called beneficiaries. In this instance the Foundation is designed

(i)                 to minimize the amount of tax that would otherwise be payable by the Founder on profits made by any asset/company that the Foundation owns; &/or

(ii)              to protect assets from any law suit/judgment that might be filed/lodged against the Founder; &/or

(iii)            as a cross generational family wealth management vehicle


Type (b) is where a Foundation is set up to fulfil a specific purpose. That purpose might be non-Charitable (eg “to hold shares in XYZ Company”) or Charitable (eg “To promote the health and wellbeing of children, including promotion of the provision of proper health care and treatment for children & to make distributions to entities and institutions that are organized and operated exclusively for charitable purposes and which further the purposes referred to above.”)


In the case of a Crypto enterprise what often happens is that a foundation is established under the law of the jurisdiction where it is registered with a purpose which allows it to justify investing in a/the start-up that the Founder intends to launch (although, it doesn’t necessarily have to be limited to investing in a specific start-up).


The foundation is independent and controlled by a board of appointed individuals (“Councillors) who oversee its management and operations (including any grant-making). The foundation takes in the money paid by individuals (which conceptually could almost be considered a donation) in exchange for Crypto Tokens (or a promise to provide Tokens in the future), and then uses the money to support the development of platforms and technologies that can arguably deliver the foundation’s purpose (which is obviously in practice intended to mean funding the start up at the centre of the ICO/Token Launch).


Where an investor commits to donate/pay money to a Foundation and the Foundation in return promises to issue a token once same is created the question in my mind is, is this bargain enforceable at law? Certainly if I were acting as legal adviser to an investor I would take some convincing given that Foundations historically are designed to be deployed as passive asset holding vehicles. (Can a Foundation offer goods/products for services for sale in the market place? It’s a moot point..).


In my view a more certain legal structure might be:


  1. To set up a Foundation to act as the funding vehicle.
  2. The Foundation forms a Company (in a jurisdiction where Crypto Token manufacturing/issuance is neither a prohibited nor licenseable activity)
  3.  The investor donates to the Foundation
  4. The Company signs off on a contract whereby, in consideration of the investor having made a donation to its parent entity, it promises to supply X tokens to said investor within Y date


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



Where To Incorporate an Unlicensed Cryptocurrency Exchange

Recently, (given it’s such a rapidly evolving area), we decided to take stock of the current licensing regimes across the Offshore World the goal being to see what jurisdictions would currently allow a Cryptocurrency Exchange to incorporate there without the added requirement of having to apply for some form of Special License.


Our In-House Lawyer was given the job of writing to his Lawyer counterparts in each of the respective/potential jurisdictions. The question posed was as follows:


“I/we have a new client wanting to launch a new Cryptocurrency Exchange. Is such a business a licensesable activity or a prohibited activity in your jurisdiction currently? If it is a Licenseable activity what license will need to apply for what will it cost roughly (eg not less than $X not more than $Y) and how long will it take to obtain a license.”


Here are the answers received from each of the said Lawyers/Law firms, verbatim:


Panama: “The Crypto does not have any regulation in Panama. As a matter of fact we have incorporated companies for this type of business before. As long as the name does not have the word Bank it will be OK. The difference is that we need to do a more in-depth due diligence and do require more documents and info, being this is a high risk business. The first question that comes to mind is whether they want to use the Panama company to launch the protocol and transfer control over to a company in a different country to operate the exchange?”


Belize: “Good day to you. Kindly note that last year the IFSC issued a public statement confirming that, as is the case in many jurisdictions, the IFSC does not regulate Cryptocurrency.  Unfortunately having viewed the prospects business plan and considered all the services the client proposes to offer coupled with the non-regulatory state in Belize, we are unable to assist. I have attached a copy of the statement made by the IFSC. Hopefully in the future as we move to digital currency standards, our jurisdiction can offer a licence and full regulation.”


The BVI: “I confirm that a license will be required for such activities.  Please review this link on the FSC’s view on such activities”  (We can assist to incorporate the Company and to apply for the license. The incorporation will be $1,350.   Our fee for the SIBA application will be $10,00,500 which includes the Government fee of $1500).”


Nevis: ”This will be a matter for the Eastern Caribbean Central Bank. We will have to contact them and get the information. We are not certain how long this will take but will revert to you as soon as we get the information from them. Can you provide more information for us to send to the Central Bank?”


Hong Kong:  “We do not on-board clients that issue ICO, run or manage cryptocurrency exchange so we do not have much research in these areas. You may try to find out more information about cryptocurrency licensing at: Securities & Futures Commission: Besides, if the company will also serve as a bank, it may also need a separate license from the monetary authority: ”


St Vincent & The Grenadines: ”Apologies for the delay re your inquiry about a Crypto Exchange formation. The activity is not licenseable in SVG but can operate its business but CANNOT state that it is a licensed entity in SVG for cryptocurrency”


Marshall Islands: ”The Republic of the Marshall Islands Registrar of Non-Resident Domestic Entities as a matter of policy will not form entities that intend to engage in cryptocurrency trading, forex trading, binary options trading, or related business activities.  In addition, section 3(6) of the Business Corporations Act requires non-resident domestic entities which carry out activities in another jurisdiction which would be regulated under the Banking Act 1987 if it was operating within the Republic of the Marshall Islands, which includes activities such as Forex, then the entity is required to be regulated by the relevant authorities in the jurisdiction(s) in which the entity carries out those activities and must comply with the laws, regulations, and licensing requirements of those jurisdiction(s).  If it comes to the Registrar’s attention that formed entities have violated § 3(6), it will take appropriate action which may include annulment of the entity.”


Dominica: “Thank you for your email. A Cryptocurrency exchange is exempt from functioning under an IBC, Due to the nature of business service. They are prohibited from holding customer cash under a wallet or personalised account. However, I am currently representing a major client in bringing legislation reforms to Antigua & Barbuda for such businesses. The technocrats are now fleshing new legislation for parliamentary approval. I will keep you informed of the progression as it will be a game-changer in the region for such businesses.”


Are you looking to incorporate/set up a Cryptocurrency Exchange? If you’re mindful to go down the Licensing Road you may be interested to know that the following jurisdictions now offer a specific licensing regime for Cryptocurrency Exchanges and or for ICOs:

  • Gibraltar
  • Malta
  • Estonia
  • Lithuania


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




Why should I set up my Company in a country that does NOT have a TIEA with my home country?

Whenever a client asks us “Where should I set up my Offshore Company?” as a starting point we always strongly recommend against incorporating a Company in any jurisdiction which has a TIEA (Tax Information Exchange Agreement) with the client’s home country.


Why do we say that?


Let’s just say your home country government (taxman) someday somehow down the track sees that you are doing business with a Company in XXX Offshore Nil Tax Jurisdiction (ie let’s assume it’s a jurisdiction that DOES have a TIEA with your home country), or receiving money from (or sending money to) said Company or receiving mails or packages from (or sending mail or packages to) said Company, what would likely happen is this…


The taxman would look at that and murmur “Hmmm Mr AB is doing business with an XXXX Company….. Hmmm.. XXXX is a tax haven…. Hmmmm… I wonder if Mr AB is secretly behind this Company…. OOOOO! XXXXX has a TIEA with us. LET’S GO AND FIND OUT!”


What would happen then is the local taxman would send an email to his counterpart in the Offshore Company jurisdiction something like this:


Dear counterpart,


Pursuant to clause XXXX of the TIEA between our country and your country please supply the following information as regards the Company XYZ Trading Ltd incorporated in your country:


  1. 1.     Please tell us the names of the current Directors of this Company
  2. 2.     Please tell us the names of the current Shareholders of this Company
  3. 3.     Please tell us the names of the current beneficial owners of this Company
  4. 4.     Please tell us the names of the current significant controllers of this Company


The Offshore Jurisdiction taxman collects this information from the Company’s local Registered agent (who is obliged by law to hand over this info ie in the case of a TIEA request) and sends it to his onshore counterpart.


The first you know about it is you get a knock on the door from the local taxman. “ Hi Sir, There’s a Company in XXXX country that you founded and we’ve seen no declared income from or interest in regards to this Company you’d better come with us for a chat”.


A major tax investigation then takes place wherein you are effectively presumed guilty of tax evasion unless you prove otherwise.


You should be able to prove otherwise (ie if you have structured the Company in a very careful manner) but it’s going to cost you tens of thousands, if not hundreds of thousands, of dollars in legal fees to prove your innocence.


Hence we ALWAYS advise our clients, re choice of Company jurisdiction, wherever you decide to incorporate, make sure it’s in a country/jurisdiction that does NOT have a TIEA with your home country.


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


How to Open an Amazon Account for a Tax-Free Offshore Company

Re opening an Amazon type account for your tax free Offshore Company or IBC, here’s how that usually works.


1. The Company is set up in a nil tax jurisdiction with a (nil tax jurisdiction based Nominee Director + a Nominee Shareholder (or Private Foundation Shareholder ie where the client is based in a country which has a CFC law). The client/company owner is appointed as an Authorised Representative of the Company. The client then shops for and then recommends a/the Online Store Platform (eg Amazon) for the company to open an account with.


2. To make it quicker and easier for the client what we normally do is provide you/the client with a Limited/Specific Power of Attorney (see sample below) which will enable you/the client to (a) obtain the account opening forms (b) apply to open the Amazon/equivalent account on behalf of the company as an authorised representative of the company and (c) to trade/operate (ie once the account is opened) the account as an authorised Trader (to assist this we also supply a Consultancy Agreement which is included in the price paid for incorporation).


3. The client obtains and completes the Amazon Account Opening Application and emails it to us for signing by the Company Director


4. We arrange for the application forms to be signed and for those + DD/KYC documents as regards the applicant company (and nominee director/shareholder etc) to be sent to Amazon.




BY THIS POWER OF ATTORNEY given this xxxx day of mmmmmmmm 2020


XYZ TRADING LIMITED of YYY street, XXX City/State/Country(“the Donor”).


Hereby appoints ENTER CLIENT’S NAME HERE of ENTER CLIENT’S ADDRESS AND DATE OF BIRTH HERE (“the Attorney”) as the true and lawful attorney of the Donor for and in the name of and on behalf of the Donor to do all or any of the lawful acts or other things set out as follows:


  1.     To do all things necessary and sign all documents as may be required for the Company to open a Seller Account with Amazon International.
  2.     To place items for sale on Amazon, at such prices as may be advised by the Attorney, and to reply to sales inquiries received on Amazon


And the Donor hereby agrees at all such times hereafter, in the absence of fraud or gross misconduct, to ratify the actions of the Attorney carried out in good faith in furtherance of the above and to indemnify the Attorney in relation to whatever the Attorney shall do or omit to do by virtue of this Power of Attorney herein.


IN WITNESS of which the Donor has duly executed this document on the date first appearing above:


EXECUTED AS A DEED                                              )


Acting by and in the presence of:                                  )



Director… ………………………….





Secretary… …………………………



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


How To Protect Assets From Divorce using an Offshore Company

Are you looking to protect certain assets that you own from a Divorce/Family Court Attack?


If so, you’re in luck! I’ve been a lawyer for 29 years. For the first 10 years I was a divorce lawyer then I picked up a job in the Seychelles and for the past 19 years I’ve specialized in designing/constructing International Tax Planning/Asset Protection/Succession Planning strategies. I know exactly what you need to do in order to remove “at risk” assets from the “asset pool” that would otherwise be up for division in the event of Divorce/Property Settlement litigation.


If there are particular assets that you own in your name that you feel morally your spouse shouldn’t be able to claim any part of, what you would need to do to protect them is transfer ownership of these assets to an entity (a) that you are not seen to manage/control and (b) that you are not seen to be the beneficial owner of.


In years gone by I’ve seen people in such a position transfer assets to an Offshore Trust. But a better option in my view would be to transfer your “at risk” assets to a Private Foundation.




Because (unlike a Trust) a Private Foundation is presumed at law to be both the legal AND beneficial owner of any asset it holds. Provided you’re not seen to be in control of the Foundation ie provided on paper you’re not the seen to be the Founder or Councillor of the Foundation (which situation we can assist to cultivate ie using Nominees) then any assets held by the Foundation at divorce time should be excluded from the “joint” asset pool.


If you want to be really clever what you might want to do is set up 2 Offshore entities (eg a Company AND a Foundation) and then transfer the at risk assets to Offshore entity 1 and then from Offshore entity 1 to Offshore entity 2. That should also place the assets beyond not only the reach of the Family Courts, but also beyond the reach of any Bankruptcy Trustee should the spouse try and take steps to bankrupt you as a means to try and claw back assets transferred by you to a/the 3rd party in the first instance. (See below for details re that strategy ie beneath the heading “ How to get around insolvency clawback provisions“).


In short what I’d probably do if I were in your shoes is is (a) transfer ownership of the “at risk” assets from myself to an Offshore Foundation and then (b) transfer ownership of those assets to a nil tax Offshore Company owned by the Foundation (as this will give you maximum flexibility in terms of how to utilize those assets).


How To Get Around Insolvency Clawback Provisions Via Offshore


If an asset is owned by an “Offshore” Company (and especially if that Company is registered in a privacy haven) it can be very hard to seize the asset or the Company (ie if a judgment is entered against you and you are the underlying beneficial owner of the Offshore that has received the asset). This is so on 2 counts:

(a)  Foreign judgments are rarely recognized by “Offshore” Courts; &

(b)  Generally the judgment creditor would need to be able to prove that you are the underlying beneficial owner of the Offshore Company (which would be all but impossible to do if the Company is registered in a privacy haven ie somewhere which has no public register of directors or shareholders or beneficial owners).


What you would need to be wary of however is the possible impact of onshore Insolvency Laws. For example in most developed countries:

(a)  any transfer of assets within 6 months of you going bankrupt can be overturned and the asset clawed back by the Bankruptcy Trustee

(b)  a transfer of an asset where the primary purpose of the transfer was to defeat a creditor can be overturned and the asset clawed back by the Bankruptcy Trustee at anytime (ie regardless of when the asset was transferred).


That said the claw back power only pertains to the initial transfer of the asset (eg from you to the Offshore Entity). So what you would want to do is ensure that the asset is transferred through 2 sets of hands ie from you to Offshore Entity One and From Offshore Entity One to Offshore Entity Two.


Why so?


Because the Bankruptcy Trustee should have no power to overturn the 2nd transfer of the asset.


So if you live in a country which has this model of Insolvency Law you will want to set up 2 Offshore Entities and transfer your at risk assets from you to Offshore Entity 1 and then from Offshore Entity 1 to Offshore Entity 2.


(and for maximum security the smart thing to do would be to set up the 2 Offshore Entities in different countries)


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


Where To Set Up An ICO Without Needing To Apply For a License

Last week we were contacted by an Accountant referrer who had a client with a specific aim…. The client wanted to launch a new Cryptocurrency/ICO in a low regulation jurisdiction where such a business could be incorporated without needing to apply for a Special License.


So, our In-House lawyer reached out to his/our Lawyer contacts in each of the nil tax jurisdictions whereat we normally form Companies.


The question put to each Lawyer/firm was “I have a new client wanting to launch a new Crypto coin/ICO. I have viewed the Business Plan. In my opinion what the client plans to offer does NOT constitute a Security. Is such a business a licensesable activity or a prohibited activity in your jurisdiction?”


Here are the responses we received:


BVI: “We recommend that companies that are venturing into Crypto activities should seek legal advice from a BVI attorney.  Crypto activities may fall under the Securities and investment Business Act therefore, the company should seek legal advice before proceeding. Please confirm if we should obtain a quote and we will need a copy of the business plan to obtain a quote.”


Panama: “Such a business is neither licenseable nor prohibited in Panama”


Seychelles: Such a business is now licenseable in Seychelles


Anguilla: No reply


Samoa: Such a business is prohibited in Samoa


Dominica: “The type of activity you are referring to is not restricted by the IBC Act of 1996 and as amended thereafter. Nevertheless, crypto activity is a grey area in our jurisdiction, thus it lacks proper protocols and regulations. If a legal opinion on this company is needed from a Dominica lawyer, the rates start with 3,000 USD, depending on the content.”


Belize: This activity is not regulated but neither is it prohibited.


Nevis: “On the application form, there is a section that asks about the purpose of the business. Representatives from the Registry will come and inspect our files. Since there is no legislation it is not illegal but I am not certain how the manufacturing of token will be viewed, since it will used as a form or currency. Let me look into this some more and revert back to you.”


Hong Kong: To my best understanding, there’s no official black and white guideline online to specify whether cryptocurrency or ICO is regulated or prohibited in Hong Kong. However, the SFC have published a statement in 2017 about ICO which you can take a look at: About licensing in SFC, please go to: Unfortunately we do not deal with clients who are running cryptocurrencies platform or launching ICO, because these are considered as higher risk activities which requires us to conduct enhance and frequent ongoing due diligence so given the fees we charged, we would rather leave it to other expertise (i.e. big law firms) to on board this segment of clients. “


In short if you are looking to launch a new ICO/Cryptocurrency and you don’t want to have to apply for any form of Special license as things currently stand (Note: This information is current as at 8 August 2020) the jurisdictions you’ll definitely want to take a close look at are Panama, Belize and Dominica. OCI can assist you to incorporate a (nil tax) Company in these jurisdictions. Check these links for details:


  1. Panama:
  2. Belize:
  3. Dominica:


Before committing to incorporate such a business we’d recommend you seek legal advice from a Lawyer on the ground in the jurisdiction wherein you intend/decide to incorporate.


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