Why Incorporate a Singapore Private Limited Company?

Singapore is a prosperous High-Tech city state situated at the lower tip of the Malaysian Peninsular with a population of approximately 5 million people.

 

Under the idiosyncratic pro-development leadership of Lee Kwan Yew’s People’s Action Party (and thanks in no small part to a low tax operating environment) Singapore has risen from a subsistence based economy to an economic superpower in little over 50 years. It is known as one of the four ‘Asian Tigers’ and is the major center for business and trade within the region.

 

A British colony from 1826 to 1963 the official business language in Singapore is English but Mandarin and Malay are also widely spoken. The work force is well educated and hard working with a high level of expertise.

 

Singapore is one of the leading international financial centres in the region and most of the world’s top 50 banks have branches or representatives on the ground as do most multi- national companies. Financial Services is a major contributor to GDP and the service infrastructure is world class with numerous International Asset/Fund Managers, Trading Houses and International Accounting’/Legal firms having substantial operations on the ground in Singapore.

 

With the controlling hand of government effectively planning and managing the social and economic development of the country Singapore boasts extremely high political stability and very low corruption.

 

A 2006 study by KPMG rated Singapore as one of the most competitive business locations amongst industrialised countries in the world. The World Bank’s ‘Doing Business 2011′ study also concluded that Singapore is the best country in which to run a business.

 

Key benefits to incorporating a Limited Liability Singapore company are:

  • Singapore Companies do not pay tax on profits made and held outside of Singapore
  • English is the official business language (all company reports are produced in, and all information is available in, English)
  • A British Common Law Legal System
  • 5 Star service infrastructure
  • There are no restrictions for foreigners to be shareholders or Directors of a Singapore company
  • The incorporation process for a Singapore company is quick and efficient
  • There is no minimum requirement for share capital (Singapore companies can be capitalized with just one dollar)
  • Only one Director and Shareholder is required to form a limited liability company.
  • There is no capital gains tax in Singapore
  • Foreign dividends are not subject to Singapore income tax
  • No Audit requirement (except for large Companies – see below)
  • Extensive double taxation avoidance treaty (DTA) network with more than 60 DTAs signed and ratified with other countries.

 

Other features of Singapore Companies include:

 

  • At least one Director must be a Singapore (natural person) resident (which OCI can provide)
  • Can trade in Singapore and outside Singapore
  • May be limited by shares or limited by guarantee
  • Tax on Singapore sourced or remitted income is only 17% max
  • Singapore is a world leader in foreign trade and investment and has one of the best business environments in the Asia Pacific region
  • Singapore is the best country in which to run a business according to a recent world bank study and it has been named as having the most open economy for international trade and investment and least corrupt economy in the world
  • Singapore has one of the most highly developed and well-regulated financial centres in the world which has been built on the highest regulatory and prudential standards
  • Tax credits for foreign tax paid are available in Singapore. However, they are subject to some conditions
  • Corporate tax rates are about 8.5% up to $300K profits and a flat 17% above that
  • There are no dividend or capital gains taxes in Singapore
  • There is no estate/death/inheritance tax in Singapore
  • There is no requirement to disclose beneficial owners names to the Registry

 

Singapore as a Company Domicile – Overview

 

Reduced tax liability

Taxes are one of the key considerations for setting up an offshore company. One of Singapore’s unique advantages is its simple and low tax system. Singapore’s Tax System is characterized by low corporate and personal income tax rates; tax incentives and tax relief measures; absence of capital gains tax; absence of dividend tax; territorial one-tier tax system and an extensive tax treaty network.

 

As Singapore follows a territorial basis of taxation, taxes apply to income that is accrued to or derived by the company from Singapore or foreign-sourced income received in Singapore. Foreign-sourced income received in Singapore that meets certain qualifying conditions is exempt from Singapore tax, while foreign-sourced income that is not remitted into Singapore is exempt from Singapore taxation. Singapore follows a single-tier tax policy which means once the income has been taxed at the corporate level, dividends can be distributed to shareholders tax free. The corporate income tax rate is approximately 8.5% for profits up to S$300,000 and a flat 17% above S$300,000. Furthermore, a newly incorporated company enjoys 0% tax rate on the first S$100,000 taxable income for each of the first three tax filing years, provided the company has a maximum of 20 shareholders of which at least one is an individual shareholder holding at least 10% of the shares.

 

Credible image

Since Singapore is not a tax haven, an offshore company that is incorporated in Singapore communicates credibility and stature as a legal entity. By incorporating a Singapore offshore company, your business will be taken seriously by stakeholders such as employees, bankers or other professionals you will be dealing with.

 

Ease of offshore company incorporation

Singapore has been consistently ranked as the world’s easiest place to do business. The company registration process is quick and efficient, free of bureaucratic red-tape. The registration procedure is fully computerized and involves only two distinct steps – company name approval and submitting incorporation documents. Both these procedures can be executed online and under normal circumstances a Singapore offshore company can be incorporated in 1-2 days.

 

Liberal foreign ownership policy

Singapore’s foreign ownership policy is open and liberal. There are no restrictions on permitted fields of business activity if you want to set up an offshore company in Singapore. 100% foreign shareholding is allowed in all sectors. Shareholders can be individuals or corporate bodies. Additionally, foreigners wanting to register an offshore company in Singapore do not require prior approval from Singapore authorities.

 

Political stability

The Political and Economic Risk Consultancy has rated Singapore as the most politically stable country in Asia and Asia’s least bureaucratic country. The Singapore government is noted for its high integrity and pro-business approach. It is often described as rational, pragmatic, transparent and corrupt-free. Singapore is also characterized by a transparent, sound and efficient legal system. There are clear-cut rules and regulations pertaining to commerce, intellectual property protection, manpower and other business related areas. As a result, the level of risk involved in setting up and operating a Singapore offshore company is minimal and almost non-existent.

 

Sophisticated banking facilities

Singapore has emerged as the leading financial center in the Asia Pacific region. Singapore offshore companies have a broad choice of world-class local and foreign banks for opening an account. Banks in Singapore offer a wide-array of attractive features such as multi-currency accounts, internet banking, credit cards, trade financing, freedom to move funds across countries and more. Although most of the banks require physical presence at the time of opening the account some of them are willing to make an exception on a case-by-case basis.

 

Audit Exemptions

The Companies Act was amended in 2014 to update the audit exemption criteria for companies and introduced the concept of a “small company”. A company that qualifies as a small company is not required to appoint an auditor and have its accounts audited. The Amended Act was made effective starting from July 1, 2015. A company is considered to be a small company if it fulfils at least two out of the following three conditions:

  1. The total annual revenue of the company must not exceed S$10 million;
  2. The total assets of the company for the financial year end must not exceed S$10 million;
  3. The number of full-time employees at the end of the financial year must not exceed 50.

Besides private companies, group companies (holding and subsidiary companies) can also avail the audit exemption if they qualify as a small group per the criteria described below.

 

Group Company Audit Requirement

 

A group company is defined as a holding company and its subsidiaries that together form a group due to a common source of control.

 

A group company will be exempt from annual audit of its accounts if the holding and all subsidiary companies individually:

 

  1. Fulfil at least 2 of the small company qualifying conditions and
  2. Belong to a “small group”

 

To qualify as a “small group”, the group (comprising of all the companies) must fulfil two out of the following three conditions in the immediate two preceding financial years:

 

  1. The consolidated revenue must not exceed S$ 10 million;
  2. The consolidated total assets must not exceed S$ 10 million;
  3. The total number of employees of the group must not exceed 50.

 

In other words, this means that to qualify for the audit exemption, the individual subsidiary companies as well as the holding company, as a group, must fulfil the eligibility criteria of a small company.

 

Procedure to Incorporate

 

  1. The proposed name must be submitted for approval
  2. Corporate documents and etc must be filed including:

(a)    Memorandum and Articles of Association

(b)   Details of shareholders & shareholdings must be filed

(c)    Details of registered office address

(d)   Appointments of directors, company secretary and statutory auditors.

 

Miscellaneous

  • No more than 50 shareholders are permitted
  • Bearer shares are not permitted
  • Time to establish 3-5 days
  • Authorised Share capital can be in any currency
  • Public register of Directors and Shareholders (though Nominee Director/Shareholder can be deployed)
  • (subject to certain exceptions) Accounts must be audited
  • Shareholders meeting can be held anywhere
  • Local Company secretary is required
  • Singapore companies can be redomiciled and foreign companies can migrate to Singapore
  • Generally there are no restrictions on what kind of business a Singapore Company can do save for financial services education, financial services, education, media related or other politically sensitive businesses all of which require special licenses.
  • Ordinary shares, preference shares and redeemable preference shares are all permitted
  • Shares in Singapore Companies can be held 100% by non-Singaporeans
  • There are some partial income tax exemptions available in Singapore
  • There is no net worth tax in Singapore
  • Singapore is rated #1 in the world by World Bank for ease of doing business
  • Singapore is ranked the third wealthiest nation in the world by Forbes magazine
  • Singapore was ranked as the third most globalized economy among 60 of the world’s largest economies in the Ernst and Young 2011 Globalization Index
  • Singapore is rated #1 as the most politically stable country in Asia
  • Singapore is rated #1 as the best labour force in the world
  • Singapore is rated #1 in Asia for quality of life

 

OCI Singapore Company Packages

 

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

 

Services:

  • Unlimited name availability inquiries
  • Advice from an experienced International Corporate 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 representative in commercial negotiations
  • 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”)
  • XBRL Filing
  • Preparation of unaudited financial statements
  • Filing estimated Chargeable income (ECI) and Form C-S
  • Provision of corporate secretary

 

Price (all inclusive): $US2,550

 

Plus provision of 2 Nominee (natural person) Directors (including 1 Singapore based Director): $2,500 p/a

 

Every effort has been made to ensure that the details contained herein are correct and up-to-date, but this does not constitute legal or other professional advice. We do not accept any responsibility, legal or otherwise, for any error or omission.

 

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

 

www.offshoreincorporate.com

 

info@offshorecompaniesinternational.com

 

ocil@protonmail.com

 

oci@tutanota.com

 

oci@safe-mail.net

 

ociceo@hushmail.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.

 

How To Sell NFTs (Non Fungible Tokens) Using A Tax Free Offshore Company

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?

 

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:

 

  1. 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)
  2. You are appointed (via a Consultancy Contract) by the Company to manage the business or certain/key aspects of it (see below)
  3. 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
  4. 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)
  5. An Offshore account (which received payments via a merchant account) is set up in a nil tax banking centre
  6. Ideally the website server is located in a country which does not tax businesses/companies on the basis of server location
  7. 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
  8. All such contracts are signed Offshore ie in a nil tax environment by the Nominee Director
  9. All such monies are banked free of tax in the first instance
  10. You or your local company would be contracted by the IBC to manage sales/delivery of product/website maintenance/whatever.
  11. 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.
  12. 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:

 

www.offshoreincorporate.com

 

info@offshorecompaniesinternational.com

 

ocil@protonmail.com

 

oci@tutanota.com

 

oci@safe-mail.net

 

ociceo@hushmail.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.

 

LITHUANIA CRYPTOCURRENCY EXCHANGE LICENSES

Are you looking for somewhere cost effective and easy to obtain a Cryptocurrency Exchange License?

 

If so (as an alternative to Estonia) you might want to check out the Lithuanian Cryptocurrency Exchange option.

 

Being recognized as a traditional finance jurisdiction within the European Union and European Economic Area (EU/EEA), Lithuania recently introduced a regime for the set up and Licensing of Cryptocurrency Exchange and Cryptocurrency Depository Wallet operator enterprises making it one of very few European Union (EU) members states with virtual currency licensing and authorization procedures.

 

Types of crypto activity authorization

 

There are 2 types of cryptocurrency business license one can obtain in Lithuania :
– Crypto currency exchange operator is a company or the affiliate of a company exchanging cryptocurrency owned by the client for a commission fee

 

– Crypto currency depository wallet operator is a company or the affiliate of a company managing client cryptocurrency depository wallets

 

The activities of the cryptocurrency exchange and cryptocurrency wallet provider need to be separated from the licensed financial activity (payment and electronic money institution, bank, etc.). Nevertheless, licensed financial institutions are allowed to serve the fiat payments of the crypto dealing companies and their clients creating an effective vehicle for crypto-fiat payments.

 

Unlike Estonia – which has recently brought in local substance requirements – (ie to obtain/hold a Cryptocurrency Exchange License in Estonia you now need to have a local office, local/resident Compliance Manager & a Management Board Member on the ground), in Lithuania there are no such specific requirements as in Estonia. Hence, the setup of a Cryptocurrency Exchange in Lithuania can be completed in a simpler manner in terms of both set-up and on-going costs.

 

For Lithuania, in terms of set up costs, you would need to budget to spend around 12,000 Euros. On-going fees can be kept to a minimum as no specific requirements for local personnel or office exist to date. We can also support with full service compliance, including local AML officer services as required. (OCI has a representative office in Lithuania and can provide full setup/support in Lithuania should you decided to apply for a Crypto Exchange and/or etc license there).

 

Initial Coin Offering ICO registration for token distribution in Europe

 

Initial Coin Offerings (ICOs) and token distributions to investors in Europe will require specific authorization. Separate AML/KYC and other reporting requirements apply to any Lithuanian company carrying out ICO activities or attracting financing through the public distribution of tokens and virtual coins to investors. Lithuanian registered legal entities (companies) as well as Lithuanian registered affiliates of EU and non-EU companies are allowed to register and publicly distribute virtual coins offering them to the investors in all EU/EEA area.

 

AML/KYC requirement for the companies holding cryptocurrency authorization

 

Lithuanian registered legal entities (companies) and Lithuanian registered affiliates of EU and non-EU companies can apply for Crypto authorization. Applicants need to have in place AML/KYC polices and implemented procedures necessary for the provision of cryptocurrency related activities. Cryptocurrency exchange and crypto currency depository wallet operators are supervised by the Lithuanian Financial Crime Investigation Unit – FIU.

 

Members of the Management Board as well as Ultimate Beneficial Owners (UBO’s) of the company need to meet the requirements of impeccable reputation. (ie a local spin on The Common Law equivalent of “Fit & Proper”). Conveniently, there is no requirement for directors or members of the board to be Lithuanian/European residents.

 

General requirements for any Lithuanian entities engaged in cryptocurrency activities:

– Customer identification and verification

– Reporting to Lithuanian FIU

– Record Keeping and client data

– Employment of Lithuanian AML officer

– Preparation of AML/KYC polices and implementation of internal control procedures

 

OCI Lithuanian cryptocurrency registration and authorization

 

OCI can provide the full range of cryptocurrency exchange and cryptocurrency depository wallet operator authorization services including company registration in Lithuania and preparation of all required AML/KYC policies and procedures.

 

After the authorization/registration/licensing process is complete we can also provide bookkeeping and Lithuanian FIU compliance services for authorized entities as/if needed.

 

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

 

www.offshoreincorporate.com

 

info@offshorecompaniesinternational.com

 

ocil@protonmail.com

 

oci@tutanota.com

 

oci@safe-mail.net

 

ociceo@hushmail.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.

 

 

 

What is a Purpose Foundation?

A Purpose Foundation is a particular type of Private Foundation which, unlike a conventional Foundation (ie which has certain person/s or a category of person/s nominated to be beneficiary/s), can be formed to hold assets for a purpose without conferring a benefit on any specific person. An example of such a purpose is to hold shares in a company.

 

Purpose Foundations are currently used, among other things, in conjunction with asset financing transactions and securitizations.

 

They are also sometimes used to hold the shares in a Private Trust company (PTC) structure, where confidentiality and control issues are important. A key advantage of using a Purpose Foundation in such a scenario is that there are no registration or disclosure requirements of such Trusts at law generally speaking. Therefore the ownership of the PTC will be confidential, and the shares in the PTC will be immune from an attack on the Settlor (ie the person who sets up the Trust).

 

Generally speaking, there are two types of Foundations ie Foundation with beneficiaries and Foundations which are set up to fulfil a specific purpose. A Foundation set up to fulfil a specific purpose does NOT needs to name any person or class of person as a beneficiary. Hence, because there are no beneficiaries attached to the Foundation (a) it’s impossible to argue that any particular person has a legal or beneficial interest in Foundation assets and (b) it’s impossible to argue that any particular person is entitled to receive income from the Foundation.

 

Recently a lawyer friend succeeded in registering a Purpose Foundation in Seychelles where the sole stated purpose of the Foundation was to own 2 Mauritius Companies.

 

The nett result of deploying a Purpose Foundation in such a scenario?

 

  1. Assets held by the Foundation should be safe from attack by creditor of the Foundation’s creator; and
  2. If the Foundation is set up in a nil tax jurisdiction, and say it owns a Company incorporated in a nil tax jurisdiction – which Mauritius is – (and provided the Foundation and any Companies it owns are not seen to be controlled from onshore) you may potentially end up with a scenario whereby income streams owned by the Foundation remain beyond the reach of the onshore taxman – In such a scenario, you should only have to report/pay tax on income paid to by any Company owned by the Foundation or on distributions paid to you by the Foundation

 

Flexibility is everything. No doubt you’ll be pleased to hear that a Purpose Foundation does not have to remain a Purpose Foundation for life; A Purpose Foundation (by amending its Charter) can, later on down the track, morph into a Foundation with beneficiaries!

 

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

 

www.offshoreincorporate.com

 

info@offshorecompaniesinternational.com

 

ocil@protonmail.com

 

oci@tutanota.com

 

oci@safe-mail.net

 

ociceo@hushmail.com

 

DISCLAIMER: Offshore Companies International Ltd trading as www.offshoreincorporate.com 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.

 

How To Use An Offshore Company To Gamble Online Professionally

Online Gambling is an activity which lends itself well to an Offshore Corporate Structuring Strategy.

 

No matter what you bet on, an Offshore Corporate Structure can assist you potentially to defer paying the tax you might otherwise have to pay at home on betting profits (allowing you to grow your capital much faster in the meantime thanks to the power of compounding)

 

To summarize how it would work is:

 

  • You set up a zero tax Offshore Company or an International Business Company (“IBC”)
  • The IBC opens an account with a/the betting house
  • You are appointed as the IBC’s authorised trader/better (ie you place the bets on behalf of the company)
  • The Company would have an Offshore Management system (ie a nil tax jurisdiction based Nominee Director)
  • Ideally the Company would also have an Offshore Ownership system (ie the Company would be owned by a Private Foundation)
  • On the face of it the IBCs trading profits are being generated in a nil tax environment tax free/offshore (ie provided the IBC Is structured/administered in a certain way)
  • When you need some living/spending money the IBC pays you a wage, or consulting fees or a commission (eg a percentage of betting profits generated)
  • 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)
  • Larger amounts could be structured as part of a loan agreement between you and the Company (ie you would have the right, as you would with a line of credit or overdraft, to borrow money from the Company from time to time. (Generally speaking, such a receipt is a capital receipt not income and hence shouldn’t be caught by “income tax” rules)
  • For larger purchases (eg if you want to by a house or an investment) such investment could be made directly by the Company or by an Offshore subsidiary Company
  • A sizeable amount of the Company’s trading profits could be banked and or reinvested Offshore potentially tax free.

 

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

 

www.offshoreincorporate.com

 

info@offshorecompaniesinternational.com

 

ocil@protonmail.com

 

oci@tutanota.com

 

oci@safe-mail.net

 

ociceo@hushmail.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.

 

 

How To Buy & Sell Cryptocurrencies Peer to Peer Using an Offshore Company

With the traditional Cryptocurrency Exchanges becoming slower and clunkier to use by the day smart Cryptocurrency Investors and Traders are looking at alternative ways to buy & sell Cryptocurrency with a view to making a Trading profit.

 

Such activity typically begins with a Buyer being introduced to a Seller (or vice versa) via an Online Billboard type site.

 

The savvy Cryptocurrency Trader buys his Cryptocurrency at wholesale prices. The Trader then meets a potential Buyer online eg via a Billboard type site. The Buyer and the Trader agree on a price for the Cryptocurrency. The Buyer sends Fiat currency to the Seller/Trader’s nominated bank account. The Seller/Trader then transfers cryptocurrency from his/her wallet to the Buyer’s wallet and the transaction is completed. Like buying/trading real estate, if the Trader has bought his/her Cryptocurrency at the right price, he/she will have made a profit on the sale.

 

(Depending on the laws of the country wherein you’re based) Such an enterprise can lend itself well to an “Offshore” Corporate Structuring Plan. Here’s how it might work from an “Offshore” perspective:

 

  • You set up a zero tax Offshore Company eg an International Business Company (“IBC”) with an Offshore (ie nil tax jurisdiction based) “Nominee” Director (& ideally, eg if you live in a country which has CFC rules, a Private Foundation shareholder)
  • The IBC opens an account with the Billboard provider/s (probably with 2 providers one where you buy Cryptocurrency, one where you sell Cryptocurrency)
  • You are appointed as the IBC’s authorised trader (ie you place the advertisements and then negotiate buy and sell orders on behalf of the Company)
  • Once a month the IBC’s board meets and ratifies all the buy and sell orders that you’ve placed in the previous month.
  • Given the Company has no physical office and all deals are done on the internet, from an International taxation perspective, the IBC’s trading profits are generated from the venue from which the Company is seen to be managed and controlled.
  • Management & Control lies in the hands of the Company Director. The director is based Offshore ie in a nil tax environment. Hence profits are booked in a nil tax environment.
  • Provided the Company is setup & administered in a particular way (& depending on the laws of your home country) potentially you should only have to declare/pay tax on income/distributions paid to you by the Offshore entity

 

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

 

www.offshoreincorporate.com

 

info@offshorecompaniesinternational.com

 

ocil@protonmail.com

 

oci@tutanota.com

 

oci@safe-mail.net

 

ociceo@hushmail.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.

 

 

How To Transfer Ownership of Cryptocurrency to an Offshore Company

We are often asked “How can I transfer ownership of my Cryptocurrency to my Offshore Company so that any gain or profit realized upon sale of the Cryptocurrency is booked Offshore ie in a nil tax environment?”

 

Certainly, in most, if not all, jurisdictions (if you are the owner of a quantity of Cryptocurrency) if you’ve bought Cryptocurrency cheaply then made a profit, upon converting that Cryptocurrency into Fiat currency CGT ie Capital Gains Tax (or Income tax or Corporate/Business tax) would apply.

 

In the perfect world, before you bought/acquired the Cryptocurrency, you would have formed a nil tax Offshore Company to own invest in said Cryptocurrency. That way if/when the Cryptocurrency is sold for or converted to Fiat currency no tax would be payable by the Company in the jurisdiction where it’s incorporated.

 

For many people that is not the case.

 

As at the time of writing a LOT of people (who own Cryptocurrency in their own names) are betting that the price of certain Cryptocurrencies are going to rise substantially in the short to medium term. In the perfect world, at the point in time if/when the Cryptocurrency value say has increased substantially (eg doubled in value) – and you decide to sell – that Cryptocurrency would be owned by a nil tax Offshore Company.

 

So how might you be able to shift ownership of that Cryptocurrency to a nil tax Offshore Company prior to said Cryptocurrency substantially increasing in value, without creating a taxable event (eg a disposal/taxable event for CGT purposes) along the way?

 

Here are a couple of possibilities:

 

  1. Form a tax free Offshore Company (ideally with an “Offshore” Management/Ownership structure)
  2. Open a Cryptocurrency wallet in the name of this Offshore Company
  3. Negotiate/sign off on a loan agreement (or investment agreement) with the Company
  4. Transfer Cryptocurrency held in your personal wallet to the Offshore Company’s Cryptocurrency wallet
  5. When the Company converts the Crytocurrency to Fiat currency the Company pays interest on the loan (or an investment return as agree) to you personally
  6. Presumably the interest or investment return would be significantly less than the profit generated by the Offshore Company upon selling the Cryptocurrency/converting it to Fiat currency
  7. You would pay declare and pay tax locally on the interest payment/investment return
  8. The remainder of the money could be banked or re-invested Offshore potentially tax free

 

NOTE: Whether the above strategy will work or not in your particular case depends on the laws of the jurisdiction in which you are based.

 

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

 

www.offshoreincorporate.com

 

info@offshorecompaniesinternational.com

 

ocil@protonmail.com

 

oci@tutanota.com

 

oci@safe-mail.net

 

ociceo@hushmail.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 Convert Your IBC’s Cryptocurrency in to Fiat Currency

A lot of OCI clients use Offshore Companies to (privately and or tax effectively) Trade (or to Invest in) Cryptocurrency.

 

Why?

 

Because if you set up a tax-free Offshore Company as your Bitcoin Investment/Trading vehicle before you start buying then any Capital Gain realised when you sell your Bitcoin/s could potentially be realised free from tax.

 

Are you one of those lucky people?

 

With the value of Bitcoin having risen steadily over the past year you may be thinking it’s a good time to cash out all of (or perhaps a part of) your Offshore Company’s Bitcoin (“BTC”) Holdings.

 

This article deals with ways that one might discreetly offload BTC assuming at the time of sale your Cryptocurrency is held/owned by a nil tax Offshore Company.

 

The easy way historically has been to convert Bitcoin to Fiat Currency using a Licensed Cryptocurrency Exchange (eg Binance, Bitmex, Huobi Global etc) and then have the Exchange send the Fiat Currency to your Offshore Company’s Bank Account.

 

One of the challenges you will face using such a service however is that many banks won’t accept monies coming from a Cryptocurrency Exchange.

 

What you might want to do then (ie rather than engaging an Exchange to convert your Cryptocurrency to Fiat currency) is sell your cryptocurrency via a Peer to Peer Introducer (here is one such example: https://localbitcoins.com/ )

 

Here’s how that could/would work:

 

  • You/your Company would appoint a law firm to act as an Escrow Agent (or you could appoint a specialist Escrow Service Provider).
  • The buyer pays his fiat currency into your law firm’s Trust Account (also known as a Client Account) or into the Trust Account of your Escrow Service Provider.(The buyer’s funds are held in Escrow).
  • Once you have confirmation that the Law firm/Escrow Provider has received the payment from the Buyer and his funds have cleared you then transfer the Cryptocurrency from your wallet to the buyer’s wallet.
  • You provide proof to the Law Firm/Escrow Provider that the payment of Cryptocurrency has been sent from your wallet to the Buyer’s wallet.
  • The Law Firm/Escrow Provider then transfers the Fiat currency to your nominated bank account.

 

You would obviously have to pay a fee to the Peer to Peer provider for arranging the introduction.

 

Another way to convert BTC quickly into Fiat currency is electronically utilising specialized service providers eg someone like Metal Pay or Wirex or Revolut etc. (Check this article for details: https://news.bitcoin.com/how-to-quickly-cash-out-from-crypto-to-fiat/#:~:text=If%20you%20want%20to%20cash,can%20withdraw%20from%20an%20ATM. )

 

Obviously whichever method/service/service provider you use you’ll want to do you Due Diligence before engaging them.

 

Given the Crypto sector in many parts of the world is still unregulated you’ll want to ensure ideally that you’re dealing with a licensed professional establishment, with a proven track record of meeting their obligations.

 

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

 

www.offshoreincorporate.com

 

info@offshorecompaniesinternational.com

 

ocil@protonmail.com

 

oci@tutanota.com

 

oci@safe-mail.net

 

ociceo@hushmail.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.

 

 

 

Can One Offshore Company Own Multiple Businesses?

We are often asked can my new Offshore company own more than one business?

 

The short answer is one Company can own many businesses but what the question really should be is this: Is it advisable to have one Company owning multiple businesses?

 

Let’s look at the pros and cons….

 

Let’s say you’re the budding young entrepreneur. And that when starting out you’ve got 3 solid business ideas but you’re unsure of which one is likely to take off… after all business is risky and you can never be sure, right?

 

Hence, understandably, you’re not going to want to go to the cost of setting up 3 separate Companies given its possible that one or more of the new businesses might never take flight.

 

But what if all 3 businesses do take off and they are all owned/operated by the one/same Company. What’s the disadvantage of that?

 

In short, the risk with that kind of structure is that if all 3 businesses are owned/operated by the one/same Company – and any one business fails – assets owned by and/or cash in bank accounts held by the other businesses are at risk of attack from the failed business’s creditors. Worst case scenario? The badly performed business/es could owe so much that it/they end up sending the whole Company broke killing off the profitable business/es in the process.

 

The other advantage of having businesses owned by separate Companies is that when it comes time to sell it’s going to make the marketing and sale process a lot easier (eg the buyer, in effect, only has to do due diligence on one business not 3) and maybe less expensive, eg you could sell the shares in the Company rather than the assets of the Company and potentially avoid prohibitive stamp duty being imposed on the sale proceeds/contract price. (Presumably this would make your business a more attractive proposition to would be buyers).

 

Yes you could set up a 2nd or 3rd Company later and at that time transfer ownership of the 2nd business to the 2nd Company and the 3rd business to the 3rd Company as the case may be. However, in that scenario:

(a)   A Share Sale/Purchase agreement should be entered into on reasonable/normal commercial terms and signed by the existing Company and the new Company (eg the new owner ie the 2nd/3rd Company will need to be seen to have legally bought the business)

(b)  The price paid for the business by the new Company will need to be seen to be fair market value

(c)   The new owner will need to be seen to have paid for the business before it is registered as the new owner thereof

 

If the above boxes are not all ticked the transfer could be set aside later as a sham transaction leaving tax/legal etc liability in the hands of the former owner (ie the first Company).

 

In summary, for the reasons detailed above, it is always preferable where practicable to have separate businesses owned by separate Companies, from the outset.

 

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

 

www.offshoreincorporate.com

 

info@offshorecompaniesinternational.com

 

ocil@protonmail.com

 

oci@tutanota.com

 

oci@safe-mail.net

 

ociceo@hushmail.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 entity such as that described above.

 

 

How 2 Use an Offshore Company 2 Trade Gold & Silver

The Trading of Precious Metals such as Silver & Gold is an activity which lends itself well to an Offshore Corporate Structuring Plan.

 

To summarise how it would work is:

  • You set up a zero tax Offshore Company or an International Business Company (“IBC”)
  • The IBC opens an account with a Broker
  • You are appointed as the IBC’s authorised trader or Trading Manager (ie you are authorised to place buy and sell orders on behalf of the company)
  • The Company would have an Offshore Management system (ie a nil tax jurisdiction based Nominee Director)
  • Ideally the Company would also have an Offshore Ownership system (ie the Company would be owned by a Private Foundation)
  • On the face of it the IBCs trading profits are being generated in a nil tax environment tax free/offshore (ie provided the IBC Is structured properly)
  • When you need some living/spending money the IBC pays you a wage, or consulting fees or a commission (eg a percentage of trading profits generated)
  • 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)
  • Larger amounts could be structured as part of a loan agreement between you and the Company ie you would have the right like a line of credit or overdraft to borrow money from the Company from time to time.  (Generally speaking, such a receipt is a capital receipt not income and hence shouldn’t be caught by “income tax” rules
  • For larger purchases (eg if you want to by a house or an investment) such investments could be made directly by the Company or by an Offshore subsidiary Company
  • A sizeable amount of the Company’s trading profits could be banked and or reinvested Offshore potentially tax free.

 

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

 

www.offshoreincorporate.com

 

info@offshorecompaniesinternational.com

 

ocil@protonmail.com

 

oci@tutanota.com

 

oci@safe-mail.net

 

ociceo@hushmail.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 entity such as that described above.