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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. Please tell us the names of the current Directors of this Company
2. Please tell us the names of the current Shareholders of this Company
3. Please tell us the names of the current beneficial owners of this Company
4. Please tell us the names of the current significant controllers of this Company
5. PLEASE TELL US THE NAME OF THE PERSON/S WHO AUTHORISED THE SETUP 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:

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

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.

POWER OF ATTORNEY

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:

To do all things necessary and sign all documents as may be required for the Company to open a Seller Account with Amazon International.
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 )

By XYZ TRADING LIMITED)

Acting by and in the presence of: )

Director… ………………………….

Name:

Secretary… …………………………

Name:

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

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

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.

Why?

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 3^rd 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 2^nd 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:

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

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: https://www.sfc.hk/web/EN/news-and-announcements/policy-statements-and-announcements/statement-on-initial-coin-offerings.html About licensing in SFC, please go to: https://www.sfc.hk/web/EN/regulatory-functions/intermediaries/licensing/do-you-need-a-licence-or-registration.html 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:

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:

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

How To Import Medical Supplies Tax Free Using an Offshore Company

The sudden arrival of Covid 19 has seen many countries experience on the ground shortages of necessary medical supplies + facilities needed to test potential victims and treat the infected.

Items in high demand include disinfectants, materials needed to expand/construct healthcare facilities designed to treat Covid patients, standard examination supplies, ventilators, and diagnostic equipment.

Serious business opportunities abound for anyone who is able to source these products/materials abroad and import them to an on the ground Distributor or bulk buyer.

If you are able to source these goods from a Supplier one country (eg China) and sell them to a Customer/or distributor in need in a 2^nd country (eg the USA or Europe or South America) and you live in a 3^rd country you’ll be pleased to know that you can benefit from incorporating your business Offshore.

Here’s how it will work:

A nil tax offshore company (commonly an International Business Company ie “IBC”) is incorporated in a country that does not tax income earned/sourced outside of the home country (let’s say the Company is called “ABC Imports Limited”)
ABC sets up an Offshore bank account, in a nil tax banking centre, which receives customer payments (including ultimately those made via a merchant account)
Ideally the website and server are hosted/located in a country which does not tax business on the basis of server location (eg Singapore, Iceland etc)
Customers contract with and pay ABC. The contract is formed Offshore, ie in a nil tax jurisdiction (see below re how that is achieved). All sales monies are banked free of tax in the first instance
ABC pays the manufacturer for the goods. The manufacturer ships (or couriers or posts or airmails) the product or goods direct to ABC’s customer
ABC is seen to be managed and controlled from (and ideally beneficially owned from, see below) Offshore. This is achieved via the appointment of a (nil tax jurisdiction based) “Nominee” director.
Your standard sale agreement/website terms and conditions should provide (a) that a contract is not formed until the customer’s offer is accepted by you (ie the Offshore Company) and (b) that the source of the income is the contract. (If the order come in via website, before the client clicks buy he/she clicks on a button acknowledging that he/she has read and agrees to be bound by your terms & conditions)
Acceptance of the buyer’s offer would be provided by the Company (which is seen to be managed from “Offshore” via a nil-tax-jurisdiction resident Nominee Director) sending an email or text to the buyer, after he/she has placed the order; In simple terms what that means is that the situs of the Contract ie the place where the contract of sale (ie the agreement between your Company and the Buyer for your Company to supply goods in consideration of the buyer paying), at law, is formed in the director’s location ie a nil tax environment…
Hence the income – from which the contract of sale is the source – has been/is derived, prima facie, in a zero tax jurisdiction (every time a client buys and you send an email thanking him for payment that concludes a contract of sale at law)
(If you are not a web-based business any all supply and sale contracts should be signed Offshore by the Nominee Director)
In the case of a web-based business (for additional legal certainty) ideally the Company’s Board of Directors should meet once a month and ratify all contracts entered into in the previous month
(If you need a regular income) You would invoice ABC periodically (eg monthly) for this service which income would be assessable income in your home state – though a smart Tax Accountant should be able to assist you to claim a series of expenses/tax deductions to write off against this income (eg home office, equipment, travel, phone/internet/utilities etc) which would reduce the amount of your taxable income ie it should significantly reduce the amount of tax payable on this income (Assessable income less Allowable deductions = Taxable income). Alternatively, your Tax Free Offshore Company could loan you money (a loan is not taxable) or buy your investments direct (which would avoid the Company having to pay you “income” which would have tax consequences)
Ideally once you start to grow your business and to add substance you would be wise to set up your MD/Board and or a sales team to take orders and receive income in a low tax onshore environment (eg Hong Kong, Ireland, Singapore, Cyprus etc as per the Amazon/Google model).

The other possibility is you could simply act as a Commission Agent for the Manufacturer of the Medical Supplies. Such an operation also lends itself well to an Offshore Corporate Structuring Plan. See below which explains how.

You could also use your local Company on the ground to act as a Distributor/Importer. Check this link for details of how that would work: https://offshoreincorporate.com/how-to-use-an-ibc-for-international-trade-import-and-export/

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

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

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

How To Use an IBC To Act as a Commission Agent or Broker

Acting as a Commission Agent or Deal Broker is a line of business which lends itself well to an Offshore Corporate Structuring Plan.

In this model structure (ie as set out below) it’s assumed that you will be acting as a middleman between a buyer and seller and if the buyer and seller do business you get paid a commission ie typically a percentage of the sale/deal proceeds.

To summarise how it would work is:

You set up a zero tax Offshore Company eg an International Business Company (“IBC”) with a tax haven based Nominee Director
You are appointed as the IBC’s Authorised Representative
On behalf of the IBC you negotiate terms with the Seller and or Buyer to pay your IBC a Commission if/when the Buyer and Seller do business
The Commission Agent/Broker agreement/contract is signed Offshore by the Nominee Director
The source of the income is the contract.
Because the contract was signed offshore in a nil tax environment there should be no tax payable on income generated by the contract (a) where the Company is incorporated and (b) where you live (assuming you structure and administer the Company in a particular way).
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 tax resident 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). More sizeable amounts could be accessed by way of loan or a 2nd Offshore Company could be formed to buy your onshore investments
If you don’t want the authorities to know how much money you are earning eg by way of wages you could convert your hard currency into Bitcoin and/ or you could use an anonymous ATM or Debit/VISA card to withdraw $ from an Auto Tele Machine (though technically that receipt would be assessable income for local tax purposes)

The majority of trading profits would be banked and or reinvested Offshore potentially tax free.

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

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

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

Local laws can have an impact. Hence you should seek local Legal/Financial/Accountant’s advice before committing to incorporate such a business Offshore.

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

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

How To Set Up a Joint Venture Tax Free Offshore

A prospective client recently approached us seeking International Corporate structuring advice in regards to a project that he and some silent partners were looking to pursue outside of his home country including construction of a Private Hospital in country A and construction of a women’s shelter in Company B.

The query got me thinking about the different ways that a JV could be structured tax effectively using an Offshore Company/entity.

If you are in the same position as the querist, you’ll be pleased to know that there are several ways that you could structure such a project from an “Offshore” Perspective:

You and the financial partner/s could form a JV (Joint Venture) Company in a nil or law tax environment (ie a Company Limited by Shares wherein you all hold shares and receive voting rights in proportion to the amount of shares held). In this scenario the person with the most shares would get to decide who the Director/s of the Company will be; or
You could form a tax free LLC (eg in certain states in the US or in Nevis or in Belize) with membership units (ie the LLC’s equivalent of shares) distributed in proportion to your respective contributions (LLCs are treated for tax purposes as a Partnership ie the LLC doesn’t have to file a tax return or pay tax; It remits nett profits to the members who are then responsible for declaring the income/paying the tax thereon as/if applicable); or
You could form a Limited Partnership (in a zero tax jurisdiction) ie where you would be the General partner and the investor/financier would be the Limited Partner (see below for details); or
You could form an Offshore Company (ideally in a nil or law tax environment) and that Company could enter into a loan agreement with the Funder/s ie whereby your Company would agree to pay back the Loan Principal and or Principal with Interest or just interest only payments at certain agreed junctures (eg monthly or quarterly or yearly or?); or
You could form an Offshore Company (ideally in a nil or law tax environment) and that Company could enter into an investment agreement with the Funder (ie whereby it is noted that the investor agrees to invest $ in your Company and in return your Company agrees to pay a return to the investor based on a formula as may be agreed); or
You could set up a (non-licensed) Closed End Fund Company in a nil tax jurisdiction. In this scenario (wherein the Company has the power to issue 2 different classes of shares) the investor would get Class B shares in the Company ie the right to share in the Company’s nett profits but no voting rights. You would get Class A shares (ie shares that have both voting rights and the right to share in the Company’s nett profits).

What is a Limited Partnership?

Limited Partnerships are commonly used in Joint Ventures when one party is happy to contribute capital to the Partnership but doesn’t want to risk being made responsible for any debts (or legal liabilities) that may be incurred by the Partnership.

We can assist you to register a Limited Partnership in Seychelles or Scotland or the UK. The first thing you’ll need to decide is how to structure the Partnership.

To set up a Limited Partnership you’ll need to nominate one or more General partners and a Limited Partner.

In case you’re unsure as regards who is to fulfil what role you might like to note:

An LP is not a Legal entity and cannot hold property in its own right. The property of the LP is held by the General Partner/s
The General Partner/s is/are responsible for the administration and management of the LP including signing agreements and resolutions on behalf of the LP
The General Partner/s is/are liable for the debts of the LP if the debts of the LP exceed assets owned by the LP
Limited Partners are generally speaking (subject to certain exceptions) not liable for the debts of the LP
A General Partner may also take an interest as a Limited Partner
In most jurisdictions as part of the registration process an LP must file a “Statement of Particulars” which must include the name/s of the General Partner/s and a summary of the LP’s proposed business activities

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

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

How to Set up a Digital Marketing Business Tax Free Offshore

Digital Marketing is really any kind of marketing that assist a business owner to make potential buyers aware, via digital means of the business owner’s product or service offering.

Digital Marketers commonly fall into in one of 3 categories ie

Content marketers (eg someone who writes Blogposts for a particular business);
Social media marketers (ie someone who would help your business promote its blog articles via placing paid and organic posts on the business’s social media account
Email marketers ie persons/businesses whose skill is to who draft/send promotional emails to a business’s client base or prospective client base (and sends product promotions to

What do these 3 lines of business all have in common?

All these services can be created and delivered online/via the web.

Web based businesses lends themselves brilliantly to an “Offshore” Corporate Structuring Plan.

Essentially how it works is:

A nil tax offshore company (commonly an International Business Company “IBC”) is incorporated (with a nil tax jurisdiction resident “Nominee” Director) to own/operate the business
An Offshore account is set up in a nil tax banking centre
Customers/clients contract with and pay the IBC
Every contract (ie in your standard service terms/conditions) should provide that (a) the bargain was concluded Offshore (ie in a /the nil tax environment) and (b) that services will be provided from Offshore
The IBC Invoices the clients from offshore
Payment for invoices rendered will be banked free of tax in the first instance
You or your local company would be sub-contracted by the IBC to actually perform the services
You would invoice the IBC periodically (eg monthly) for this work which income would be assessable income in your home country – though a smart Tax Accountant should be able to assist you to claim a series of expense against this income (eg home office, equipment, travel, phone/internet/utilities etc) to significantly reduce the amount of tax payable on this income.
The rest of the income earned by the IBC can be held (and potentially invested) offshore tax free.

Management/Ownership Structure

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

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

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

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

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

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

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

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

How To Run a Tax Effective Consulting Business From Offshore

If you’re providing Consulting Services (in particular to a non-local/International clientele) then you’ll be pleased to know that such a business lends itself well to an “Offshore” Corporate Structuring Plan.

Essentially how it works is:

A nil tax offshore company (commonly an International Business Company “IBC”) is incorporated with a nil tax jurisdiction resident “Nominee” Director
The IBC owns/operates the consulting business
An Offshore account is set up in a nil tax banking centre
Customers/clients contract with and pay the IBC.
Every contract should provide that (a) the bargain was concluded Offshore (ie in a /the nil tax environment) and (b) that services will be provided from Offshore
The IBC Invoices the clients from offshore.
Payment for invoices rendered will be banked free of tax in the first instance
You or your local company would be sub-contracted by the IBC to actually perform the services
You would invoice the IBC periodically (eg monthly) for this work which income would be assessable income in your home country – though a smart Tax Accountant should be able to assist you to claim a series of expense against this income (eg home office, equipment, travel, phone/internet/utilities etc) to significantly reduce the amount of tax payable on this income.
The rest of the income earned by the IBC can held (and potentially invested) offshore tax free.

Management/Ownership Structure

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

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

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

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

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

How to Open an Offshore Company Bank Account

If you engage OCI (www.offshoreincorporate.com) to assist you to open an Offshore Account for your Company or Trust or Foundation or LP here’s how the system works:

When you first contact us we will email you a bank account brochure showing names and key details as regards the 50+ banks that we can assist to open an Offshore account with. This brochure contains details of each banks’ minimum deposit requirements, details of key services offered and set up costs.
Once you’ve decided where you want to incorporate (and how you wish to structure your Offshore Company/entity) we will email you for completion and return a banking questionnaire. The answers you provide therein will give us a snapshot of your banking requirements such as should enable us to recommend a/the bank most likely to meet your needs.
One of the partners in the firm (ie our Bank Accounts Manager) is a Chartered Accountant. For the past 10 years all she has done all day every day (apart from the firm’s Accounts) is assist clients to open Bank Accounts. She will review (and our In-House Lawyer will also review) your completed Bank Account Questionnaire. Once that’s done we will email you a short list of Banks that we feel are most likely to meet your needs + details as regards each bank (including their fees/charges).
You should review that info and then tell us which bank or banks you wish to open an account with
We will send you an (in house) Instruction form for completion as regards that particular bank
We use the data as captured in that order form to complete the bank account application forms for you
We arrange for the bank account application to be signed by the Company Director (and account/authorised signatory) for delivery to the bank + we will email you to tell you what info/docs you will need to supply
You should then furnish us/the bank with a detailed summary of the company’s proposed business activities + proof of your ID/residency as per the bank’s requirements (ie in the event that you are the underlying beneficial owner of a company applying for the account or nominated as account signatory). Certain banks also require a bank reference.
The Bank typically comes back with 2-3 rounds of questions. We will seek instructions from you as regards the bank/s queries.
We then use those instructions to draft answers to the Bank’s questions.
We then send answers to the bank’s questions directly to the particular Officer at the bank handling your Company/entity’s application
We follow up with the bank until the account is opened
Immediately the Account is opened we will either (securely) send you the account coordinates etc or arrange for the bank to securely send that info (+ any issued debit/credit/ATM card) to you

All the above work/services are included in the fixed fee that we charge you for providing assistance to open a bank account.

The fee for us to assist you to open an Offshore Account for your Offshore Company/Entity would be anywhere from $550 up to $1,550 (ie the amount of the fee depends on which bank you choose).

(Note we only assist to open accounts for Companies/entities formed by us).

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

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

How To Set up a Subscription Based Startup Business Tax Free Offshore

Are you looking to startup a Subscription based business?

(For the uninitiated) Subscription Based businesses began in the media world many years ago. Before the Information age people would subscribe to a particular magazine or news service or book club ie the subscriber would pay a regular fee (eg a monthly fee or yearly fee) to regularly receive a particular newspaper or magazine. (Eg when I was a boy my parents subscribed to a record club and received a certain number of new vinyl LP records every month).

With the technological revolution, and in particular the advent of SaaS (Software as a service) products, a LOT of businesses are shifting away from the traditional cash flow model (ie where revenue is derived from a customer’s one-off purchase) to a subscription based revenue model where revenue flows in on a recurring basis. In this later scenario subscribers pay subscription fees periodically in return for consistent access to the delivery of a particular good or service.

Examples of latter-day subscription based models include:

Music streaming services (eg Spotify)
Pay TV services (eg Netflix)
Fitness Clubs (ie Gyms)
Online Newspapers (eg News Limited)
Software Services (eg MYOB/Accounting Software Providers)

With such a business often, if not typically, the services are offered Online (ie via a website and/or an active online direct marketing campaign), the subscriber signs up online and the service is delivered online (ie via download or via email) or via post/courier.

Such a business lends itself perfectly well to an “Offshore” Corporate Structuring Plan.

Here’s how such a business can/will typically work from an “Offshore” Perspective:

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

Management/Ownership Structure

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

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

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

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

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

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

www.offshoreincorporate.com

info@offshorecompaniesinternational.com