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How To Set Up a Travel Agent Business Tax Free Offshore

A Travel Agent Business lends itself well to an “Offshore” Corporate Structuring plan.

Most Travel Agents work on the Commission Agent model, ie you act as a middleman between the Travel Service Provider (ag an Airline or Hotel) and the end user customer.

Typically in this model of a Travel Agency you in effect act as a sales agent of the Travel Service Provider, ie you are authorized to market/sell the Travel Service Provider’s products/services and you get paid a commission (ie typically a percentage of the sale/deal proceeds) when the consumer orders/pays for the service.

To summarise how it would work is:

You set up a zero tax Offshore Company eg an International Business Company (“IBC”) with a nil tax jurisdiction based “Nominee” Director
You are appointed as the IBC’s Authorised Representative
On behalf of the IBC you negotiate terms with the Travel Service Provider 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 the right 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.

Online Based Travel Agency

The other model of Travel Agency Business that lends itself well to an “Offshore” Corporate Structuring Plan, is where your business operates 100% online (ie products are advertised online and orders are placed for and paid for online).

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

A nil tax offshore company (commonly an International Business Company “IBC”) is incorporated
The IBC owns/operates a/the web based business (eg ownership of the web-domain and the website/artworks or trademark/s or any sole distributor rights are held by or transferred to the IBC)
An Offshore account (which received payments via a merchant account) is set up in a nil tax banking centre
Ideally the server is located in a country which does not tax business on the basis of server location (eg Singapore or Iceland)
Customers contract with and pay the IBC. All such monies are banked free of tax in the first instance
You pay the actual Service Provider – the difference between what the customer pays you and what you pay the service provider is your profit (banked/held Offshore in a tax free bank account)
You or your local company would be contracted by the IBC to manage sales/delivery of product/website maintenance/whatever
You would invoice the IBC periodically (eg monthly) for this service which income would be assessable income in your home state – though a smart Tax Accountant should be able to assist you to claim a series of expense against this income (eg home office, equipment, travel, phone/internet/utilities etc) to significantly reduce the amount of tax payable on this income.
Often there is some kind of intellectual property (“IP”) created or behind the website based business (even if it’s just the website/design). It may be advantageous to you down the track if ownership of the business and the IP were held by 2 different entities. What you can do there is set up a 2^nd IBC to own the IP. The first IBC (ie the Trading Company) pays license fees periodically to the 2^nd IBC which fees would be receipted tax free. This could be advantageous if you wanted to bring ownership of the web-business onshore or if you wanted to sell the business but keep a passive (potentially tax free) income stream
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 onshore to take orders and receive income in a low tax onshore environment (eh Hong Kong, Ireland, Singapore, Cyprus etc as per the Amazon/Google model)

To minimise the chances of the IBC being taxed onshore ideally the IBC should be (and be seen to be) managed and controlled from offshore. How this can be achieved is including a Nominee Director etc as part of the Corporate structure. See this page for details of how that can work:

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

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

In either model of business, in most cases, it’s likely – notwithstanding that you may have an “Offshore” Management system in place (ie a nil tax jurisdiction based Nominee Director) – that, if you’re seen to be a/the beneficial owner of the Company, your IBC would be liable at law to declare income and pay tax where you live.

If you want to mitigate (to the greatest extent possible) against this risk you’d be wise to also set up a Private Foundation to be/act as the shareholder of your Company (in short because a Private Foundation is presumed at law to be both the legal AND beneficial owner of any asset it holds/owns). For more information check this link: https://offshoreincorporate.com/private-interest-foundations/

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

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

How To Open an Offshore Forex Broker Account for Americans

Forex Trading is an activity which lends itself well to Offshore Corporate Structuring. For details on how you can minimize tax on trading profits using an Offshore Company as your trading vehicle please take a look at this page from our website: http://offshoreincorporate.com/trading-forex-using-an-offshore-company/

To summarize how it would work is:

You set up a zero tax International Business Company
The IBC opens an account with the Broker
You are appointed as the IBC’s authorised trader (ie you place the buy and sell orders on behalf of the company)
For all intents and purposes the IBCs trading profits are 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 at home though, if you know a smart Tax Accountant 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)
The majority of trading profits could be reinvested Offshore potentially tax free.

AND because a high percentage of our client base are professional forex traders we know and can introduce you to a wide range of quality Brokers (including Brokers who will accept as customers Offshore Companies set up by US persons.

AND as I myself trade forex via an Offshore Company I can explain to you how it works, from a practical perspective, on a day to day basis.

How To Get Around The American Problem

If you’re a US based forex trader you’ll know that the trading terms on offer from US brokers are NOT trader friendly. The only way to get better trading terms is to shop for a Broker outside of the US. BUT the quandary there is most (certainly all quality) non US Forex Brokers will not accept Americans (or American Companies) as customers.

The solution is to:

(a) set up an Offshore Company with a(n ideally nil tax jurisdiction resident) Nominee Director (which is a service that OCI can provide); &

(b) set up a Private Foundation to own (ie hold all the issue shares in) the Offshore Company

The Private Foundations is basically Europe’s version of a Trust save for one big difference ie a Foundation (unlike a Trust) is a separate legal entity ie it can sue and be sued. Moreover a Foundation is presumed under European Common law to be both the legal AND beneficial owner of whatever asset it holds/buys. (One jurisdiction ie the Seychelles has taken this a step further ie they specially codified this aspect of the law by inserting into their Foundations Act, see below).

Whenever you apply to open a Corporate Brokerage Account one of the first questions the Broker asks is “Who is the beneficial owner of this Company??”

If the Company applying for the Brokerage account is owned by a Seychelles Private Foundation we can say to the Broker. “This Company is owned by a Seychelles Foundation. By operation of law – that is section 71 of the Seychelles Foundations Act – the Foundation is deemed to be both the legal AND beneficial owner of the Company“.

Globally speaking having a Foundation as part of your Corporate structure can also deliver potential tax planning opportunities. In short the beneficiaries of a Foundation are not entitled to receive a distribution from a Foundation unless or until such time as the Foundation Council actually resolves to pay a distribution. This means (provided the Company/Foundation is seen to be managed and controlled from Offshore) that you can potentially retain profits inside your Company and only be liable to pay tax on income paid to you by the Company or Foundation.

Local laws can have an impact. Hence you should seek local legal/financial/tax advice before committing to set up an Offshore Company or Private Foundation.

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

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

NEVIS LLCs – YOUR QUESTIONS ANSWERED

In addition to the standard IBC the forward-thinking Caribbean state of Nevis offers one the opportunity to incorporate an LLC (Limited Liability Corporation) within its confines.

For tax purposes an LLC is regarded as a Partnership ie as a flow through entity. Like a Partnership an LLC doesn’t file a tax return or pay tax provided it passes through to its partners/members the net profit made each year.

As LLCs do not have shares (they have membership units, which in effect carry the same rights as shares) they also have the potential to steer one around the potential application of CFC laws.

The Nevis LLC however has made its name as the asset-protection-focused incorporator’s jurisdiction/corporation of choice; In short anyone wanting to file suit to attack the interest of a member of a Nevis LLC must first pay a bond to the Court/s in Nevis of not less than $US100,000.

1. What is the annual registration charge for a Nevis Limited Liability Company and are there any sliding scales relating to members’ capital contributions?

The annual registration charge for a Nevis Limited Liability Company is US$220.00. There are no sliding scales relating to members’ capital contributions.

Annual registration charges are paid for each year following the year of incorporation of the company using the following payment schedule:

$220 Due Date	$100 Penalty TOTAL $320	$220 Penalty TOTAL $440	Strike Off Date
Due on the anniversary of the incorporation date and must be paid within one month of that date.	When payment of the annual renewal is made more than one month but less than six months from the anniversary.	When payment of the annual renewal is made more than six months but less than 12 months from the anniversary.	When payment of the annual renewal is not made within one year of the anniversary of incorporation.

In addition to the annual registration charge the Nevis Registrar of Companies will, at the request of the company, issue a Certificate of Renewal at a cost of US$5 at the time that the registration charge is paid.

2. What is the government charge to register the organization of a Nevis Limited Liability Company and are there any sliding scales relating to members’ capital contributions?

The government charge to register the organization of a Nevis Limited Liability Company is US$ 235.00. This charge is unaffected by the amount of the company members’ capital contributions.

In addition to the registration charge each Nevis Business Corporation must pay US$10 for Certificate of Incorporation of the company and US$5 for the Certificate of Endorsement of the company. These additional charges are compulsory.

3. Are there any requirements to disclose the beneficial owners (members) of a Nevis Limited Liability Company to the general public and are there any requirements to file details of the managers with the public or any other Registry in Nevis?

There are no requirements to disclose beneficial owners of a Nevis Limited Liability Company to the general public or to file copies of any details of managers with the public or any other Registry in Nevis. However, the government encourages the “Local Agents” to keep registers of such information at their offices in Nevis.

4. Are there any requirements to hold:

a. An annual meeting of the members of a Nevis Limited Liability Company?
b. Meetings of the managers of a Nevis Limited Liability Company?

Except as provided in the company’s Operating Agreement there are no requirements for a Nevis Limited Liability Company to hold any annual meeting of the members or meetings of the managers.

5. Are there any requirements for a Nevis Limited Liability Company to prepare annual financial statements ?

No, there are no specific requirements to prepare annual financial statements although Section 10(1) of the Nevis Limited Liability Company Ordinance states in part:

10(1) Each member of a limited liability company has the right, at his own expense and subject to such reasonable standards (including standards governing what information and documents are to be furnished) as may be set forth in the operating agreement or otherwise established by the managers, to obtain from the limited liability company from time to time upon reasonable demand for any purpose reasonably related to the member’s interest as a member of the limited liability company such information and records as the limited liability company may maintain.

The section further states:

10(6) Failure of the limited liability company to keep or maintain records shall not be grounds for imposing liability on any manager, officer, member or agent of the limited liability company for debts, obligations and liabilities of the limited liability company.

Section 48 of the Nevis Limited Liability Company states:

48 Managers shall discharge the duties of their respective positions in good faith and with that degree of diligence, care and skill which ordinarily prudent men would exercise under similar circumstances in like positions. In discharging their duties, duly authorized members or managers, as the case may be and officers, when acting in good faith, may rely upon financial statements of the limited liability company represented to them to be correct by the manager of the limited liability company having charge of its books or accounts, or stated in a written report by an independent public or certified public accountant or firm of such accountants fairly to reflect the financial condition of such limited liability company.

6. Are there any requirements for a Nevis Limited Liability Company to file any form of annual return or tax return in Nevis?

No, there are no requirements for a Nevis Limited Liability Company to file any form of annual return or tax return in Nevis.

7. What does the annual registration charge filing form for a Nevis Limited Liability Company disclose?

There is no annual registration charge filing form for a Nevis Limited Liability Company. However, after payment a certificate of renewal is issued by the Registrar of Companies which contains:

- The name of the company;
- The company number; and
- A short statement that the company has paid the annual registration charge for relevant period.

8. How do members of a Nevis Limited Liability Company prove ownership of their memberships?

A person may become a member of a Nevis Limited Liability Company upon compliance with the Operating Agreement of the company or, if the Operating Agreement does not so provide, upon the written consent of all the members. Evidence of ownership can be provided in the form of a Certificate of Incumbency issued by the company’s Registered Agent.

9. Are there any restrictions relating to the issuance of evidence of membership by a Nevis Limited Liability Company?

There are no restrictions relating to the issuance of evidence of membership by a Nevis Limited Liability Company.

10. Must all capital contributions attributed to members of a Nevis Limited Liability Company be fully paid up?

It is not necessary for all capital contributions attributed to members of a Nevis Limited Liability Company to be fully paid up.

Section 37(3) of the Nevis Limited Liability Company Ordinance states:

37(3) A person may be admitted to a Nevis Limited Liability Company as a member and may receive an interest in the Nevis Limited Liability Company without making a contribution or being obligated to make a contribution to the company.

However, the members’ liability for capital contributions must be set forth in the Operating Agreement.

11. Can OCI open bank accounts in Nevis on behalf of it’s clients and, if so, what are the requirements?

OCI can arrange for the opening of bank accounts in Nevis on behalf of its clients. However, it is to be noted that no international banks on the islands of Nevis offer banking services to Nevis Business Corporations.

The requirements for bank account establishment of a Nevis Limited Liability Company are as follows:

a. Notarised copies of valid passports and S.S. card of all signatories to the account and principal owner if not a signatory.
b. Certified Copy of Certificate of Incorporation or Good Standing Certificate.
c. Certified copy of Articles of Organization and current Operating Agreement.
d. Contact details of Company’s present bankers (if applicable).
e. Proof of physical address of company. f. Proof of physical addresses of the signatories to the account.
g. A professional and bank reference for each company beneficial owner and account signatory

12. What is the minimum number of managers that a Nevis Limited Liability Company must have?

Section 44(2) of the Nevis Limited Liability Company Ordinance states:

42(2) The operating agreement may fully or partially vest management duties in one or more managers, who may, but need not be, members.

13. Are Nevis Limited Liability Companies required to have a President, Secretary and Treasurer or is the appointment of officers optional?

The appointment of officers of a Nevis Limited Liability Company is optional but at least a company secretary is recommended.

14. What is the standard members’ capital contribution of a Nevis Limited Liability Corporation incorporated by OCI?

There is no standard members’ capital contribution for a Nevis Limited Liability Company. There is no requirement for a statement of members’ capital contributions when incorporating.

15. Can a members’ capital contribution to a Nevis Limited Liability Company be denominated in any recognised currency?

Members’ capital contributions to a Nevis Limited Liability Company may be denominated in any recognised currency.

Section 32 of the Nevis Limited Liability Company Ordinance states:

32 The capital contribution of a member to a limited liability company may be in cash, property, services rendered, or a promissory note or other binding obligation to contribute cash or property or to perform services.

16. How many members must a Nevis Limited Liability Company have?

There are no restrictions on the number of members a Nevis Limited Liability Company may have.

17. What restrictions on the use of names a Nevis Limited Liability Company have and what words must be included to indicate limited liability?

Part V of the Nevis Limited Liability Company Ordinance Section 23(1) states:

23(1) Except as otherwise provided in subsection (2) of this section, the name of a limited liability company:

(a) Shall contain the word “limited liability company” or the abbreviation “LLC”, “L.L.C.”, “LC” or “L.C.”, and

(b) Shall not be the same as the name of a limited liability company or of any other company of any type or kind, as such name appears on the index of names of existing limited liability companies or companies or on the reserved name list maintained by the Registrar of Companies or a name so similar to any such name as to tend to confuse or deceive.

Also, a Nevis Limited Liability Company name including the following words may involve the need for government approval or licensing prior to incorporation:

Assurance, Bank, Building Society, Chamber of Commerce, Chartered, Co-operative, Imperial, Insurance, Fund Management, Investment Fund, Loans, Municipal, Royal, University.

18. Can meetings of members and managers of a Nevis Limited Liability Company be held anywhere in the world?

Subject to the terms and conditions of the Operating Agreement meetings of members and managers of a Nevis Limited Liability Company can be held anywhere in the world.

19. Can meetings of members and managers of a Nevis Limited Liability Company be handled by written resolution?

Subject to the terms and conditions of the Operating Agreement meetings of members and managers of a Nevis Limited Liability Company can be handled by written resolution.

20. How long does it take to obtain:

a. A Nevis Limited Liability Company name check?

b. Incorporation of a Nevis Limited Liability Company completed?

c. Dispatch of a Nevis Limited Liability Company completed?

Under normal conditions:

a. Names of a Nevis Limited Liability Company can be checked within one day.

b. Organization of a Nevis Limited Liability Company can be completed within 2 working days.

c. Dispatch of a Nevis Limited Liability Company corporate pack can be completed within three working days of organization.

In relation to Nevis LLC’s we can expand upon the FAQ’s as follows:

The Nevis LLC provides more confidentiality, more flexibility and more advantages for the corporate and individual user. It is a business entity that provides an alternative to those who might consider using corporations or partnerships.

With the enactment of the Nevis Limited Liability Company Ordinance, the island of Nevis boasts state-of-the-art LLC legislation aimed at solving many of the problems that face planners and business persons using or hoping to use LLCs. It is analogous to the limited liability company in the USA, to limited life companies elsewhere in the Caribbean, to the GmbH in Germany, to the SARL in France and to Limitadas in Latin America.

The United States Internal Revenue Service has indicated that limited liability companies generally may be taxed either as corporations, or as partnerships, with income and losses flowing through to the members without any incidence of tax effect at the entity level.

The Nevis LLC Ordinance permits planners to structure their Nevis LLC in any manner that suits their particular needs. It may be used for any legitimate business venture or professional practice anywhere in the world outside Nevis, including international financing arrangements, real estate holdings, manufacturing concerns and as an operational or investment vehicle for offshore trusts.

Most international LLC statutes protect the company’s assets from the creditors of its members through the limitation of creditors to a charging order. The Nevis LLC Ordinance further specifies that this is the exclusive remedy available to the creditor and also gives the company the power to redeem creditor’s interests.

One or more persons can form a Nevis LLC, such person or persons do not have to be a member or members of the LLC. The company is managed by a manager or managers exclusive of the members or by all of the members. Managers may be corporations or individuals. The Nevis LLC should have at least one member and such member can be the Manager or any other person or business entity.

Upon the formation of a Nevis LLC the members can enter into an Operating Agreement that may contain details of matters relating to the affairs of the business. Such agreement need not be in writing. Note:

- A manager of a Nevis LLC is entitled to keep confidential from the members any information in the nature of trade secrets;

- No initial capital is required at formation;

- The company is not required to issue any share or shares to commence operations;

- No shareholders are required at or after formation;

- Nevis LLC’s do not require the appointment of directors or officers;

- Corporations are permitted to act as Managers and/or members.

With regard to their purposes and powers, an LLC formed in Nevis shall be used for “ANY LAWFUL BUSINESS” purpose or purposes.

In their relationships with third parties, any LLC formed under the Nevis Limited Liability Company Ordinance 1995 shall be a legal entity with separate rights and liabilities, distinct from its managers or members. Note:

- A limited liability company shall be liable for its own debts, obligations and liabilities; and

- The failure of a Nevis LLC to keep or maintain records shall not be grounds for imposing liability on any manager, member or agent.

For operational purposes the members of a Nevis LLC may enter into an “Operating Agreement”. All members must agree to such agreement before it becomes effective. Unless the articles of organisation state otherwise, such agreement does not have to be in writing. Note:

- Entering into an operating agreement is not mandatory; and

- An operating agreement need not be in writing.

The basic information needed for our office in Nevis to form a Nevis LLC is minimal although AML/CFT requirements necessitate certain additional risk analysis information regarding geographical areas of operation etc., found on our standard order form. We need:

- The desired name of the LLC;

- The name and address of a person or a corporation that will act as the “Manager” of the LLC;

- At least one name and address of a proposed member of the LLC; and

- A brief description of the purpose for which the LLC is to be formed.

The Nevis Limited Liability Company Ordinance features:

- Exemption from taxes and exchange controls in Nevis.

- Right to third party anonymity of ownership, management and assets.

- Flexible management structure.

- No requirements for financial or annual reports to be filed.

- Designation of manager is optional.

- Strict confidentiality.

- No residency requirements for managers, members or any other officers of the LLC.

- Any one person or persons forming an LLC need not be a member or members of the LLC.

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

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

BVI IBC Act – New 2019 Regulations – Your Questions Answered

In early 2019 the BVI passed a raft of new legislative changes introducing economic substance requirements for all companies which are incorporated in and tax resident in the BVI.

The new Law (The Economic Substance Act) requires that each such Company must provide proof to its BVI Registered Agent of where the entity is tax resident and must be ready to relay that information to the BVI’s competent authorities. The new Legislation also provides that in the even that is tax resident in the BVI, it must demonstrate economic substance.

The new law however only applies to Companies carrying on a “relevant activity”. Relevant activity as defined includes:

Banking business
Insurance business
Shipping business
Fund management business
Finance and leasing business
Headquarters business
Holding business
Intellectual property business (IP legal entities will be facing more onerous requirements and are encouraged to seek legal advice).
Distribution and service centre business

In so far as applicability of the new law to British Virgin Islands IBCs (International Business Companies) is concerned here’s what you need to know:

If the Company has no BVI sourced income will the Company be liable to pay tax in BVI (and if so at what rate) – With respect to the new Economic Substance Act, the company should only be deeply concerned about BVI taxes if it is conducting one of the relevant activities outlined in the ES Act. If the company does carry on a relevant activity taxes will only be payable on the employees the company is required to have in the BVI in order to show “substance with respect to its activities. The BVI does not have an income tax system, therefore the company’s income is not in question in relation to BVI tax rates.
What documents/records must a BVI IBC keep? And how must those records be kept (ie can they be kept in soft format?) and where must those records be kept If the company is conducting a relevant activity and it decides to comply with the ES Act and prove substance in the BVI, then the necessary documents that a BVI company operating in the BVI is required to keep would be expected, eg. Financial audits, tax documents, etc.
Must a BVI IBC keep books of account (& if so what kind of Accounts must be kept)? If the company is conducting a relevant activity and it decides to comply with the ES Act and prove substance in the BVI, then the necessary documents that a BVI company operating in the BVI is required to keep would be expected, eg. Financial audits, tax documents, etc.
Must a BVI Company’s Accounts be audited (& if so by whom eg a BVI Licensed Auditor? Or?) It is a standard expectation that BVI companies should audit their books for good record keeping. The BVI tax office requires that a copy of the audited financials be submitted to them annually
Does a BVI IBC have to file a tax/annual return? Annual tax filings are to be filed with the local tax office for BVI companies
If a BVI IBC must now file an annual return or tax return what info must be included in the return? The BVI tax office provides standard forms to be completed, which mainly relates to total payroll paid per year and taxes deducted and submitted. If there is any difference in the taxes submitted and the taxes that were to be submitted the company would be expect to submit a check to the tax office upon filing of the returns.
What physical presence must a BVI have in the BVI? If there is a physical presence requirement moving forward does it only apply to newly formed Companies or old Companies (if the latter when does the new regulation begin to apply to previously incorporated BVI IBCs(?) Once a company is conducting relevant activities it must show substance in the BVI by conducting the core income generating activity in the BVI, having management and directors in the BVI, employees in the BVI and office space in the BVI. The ES Act applies to new company as of January, 2019 and for old companies as of June 2019. The companies are required to file with the BVI Government within 18 months of the above dates indicating their tax status, (i.e whether they are tax resident in the BVI or outside the BVI. If they are tax resident in the BVI they are required to show substance by the deadline. If they are not tax resident in the BVI they are required to submit a form indicating such.) Please bearing in mind that the Government’s filing platform and forms for submission are not yet ready.
Is there a publicly accessible register of Directors in the BVI? If not do you have to (privately) file Directors details with the Registry (and when, in what instance/s could this info be shared?) There is no publicly accessible register of directors in the BVI. However, the BVI Government does keep a private Register of Directors but only the regulators are able to view the information that has been filed. The information will only be shared in the case of a criminal investigation.
Is there a publicly accessible register of Shareholders in the BVI? If not do you have to (privately) file Shareholders details with the Registry (and when, in what instance/s could this info be shared?) There is no publicly accessible register of shareholders in the BVI

10. Is there a publicly accessible register of Beneficial owners in the BVI? If not do you have to (privately) file UBO’s details with the Registry (and when, in what instance/s could this info be shared?) There is no publicly accessible register of beneficial owners in the BVI. However, there is a requirement to file the beneficial owner with the Government but it is privately held. Again the information is only shared in cases of a criminal investigation.

Note the above information is current as of 5 July 2019.

If you have/own a BVI IBC and are concerned about the Legislative changes you have the option of redomiciling the Company to a comparable jurisdiction (eg Seychelles, Belize, Nevis, Anguilla etc). OCI can assist you to redomicile your BVI IBC (and we can provide guidance on which jurisdiction/s you could/should be considering moving to).

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

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

Marshall Islands IBCs

The Republic of Marshall Islands (“RMI”) is a pristine group of islands in the North Pacific Ocean located approximately halfway between Hawaii and Australia. Following “discovery” by British Naval Captain John Marshall in 1882 the islands were ultimately annexed by Germany before being passed to the United States who administered the country on behalf of the UN from the end of World War 2 until 1986 (when the nation gained Independence).

With a hybrid system of government based on both the British and US system, the US dollar as its official currency and a Corporate Law framework based on the English Common Law model the Marshall Islands is becoming an increasingly popular jurisdiction for incorporation of tax free Offshore Companies.

Key features and benefits include:

Zero Tax: IBCs registered in The Marshall Islands are not liable to pay tax on business profits locally and dividends can be remitted into and out of the Company tax free.

Nominees Permissible: Nominee Shareholders and Professional Directors are permissible in The Marshall Islands (and a Company can be appointed Director).

Bearer Shares available: Bearer Shares are permissible for Marshall Islands companies (& can be freely held ie no official custodian is required).

Easy to Establish: Marshall Islands IBCs only require as a minimum one director and one shareholder.

Speedy incorporation: Marshall Islands IBCs can be incorporated in as little as 48 hours

Privacy: There is no public register of Directors, shareholders or beneficial owners in The Marshall Islands.

Other features include:

Minimal Paperwork – There is no requirement to file annual returns or to have accounts audited for Marshall Islands IBCs
Ease of communication – English is the official language of the Marshall Islands
Language Choice – Non English company names are permitted and can be included on a Company’s Certificate of Incorporation
Flexibility – Board meetings can be held anywhere in the world
Easy to Manage – Marshall Islands IBCs are not required to hold an annual General Meeting
Inexpensive to Establish – Minimum paid up share capital required is just US$1.
Private – The Marshall Islands has not signed Tax Information Exchange Agreements with any major EU state save for The Netherlands
Confidential – There’s no requirement to file directors or shareholders or beneficial owner details at the time of incorporation
Reliable Legal Framework – The Marshall Islands Corporations Law is based on that of Delaware and New York (USA)

Marshall Islands Companies are now required to keep Accounting records and to file annually an Economic Substance Report (“ESR”). For details as to the requirements in this regards please click on this Link:https://www.dropbox.com/scl/fi/aktfth50rrnzkrbzsh7su/Marshall-Islands-Accounting-Records-and-ES-Requirements.docx?rlkey=kxvqyducupy297b47usn10ht4&st=htj9ypta&dl=0

At OCI we believe in giving you more for your money than would the average IBC formation service. Hence included in the incorporation package for your Marshall Islands IBC 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”)

Price (all inclusive): $US 1,200

With tax effective offshore company management (ie including Professional Corporate “Nominee” Director, Shareholder & Company Secretary): + $900

From 2nd year $890 (+ Nominees if required)

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

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

Where To Form a Bearer Share Company

It is still possible to form a Company with bearer shares but the jurisdiction options are not what they once were…

This article should answer any questions you might have about where you might form a Bearer Share Company Offshore and what legal conditions exist in relation to the creation, storage and transfer of such Companies’ bearer shares.

What are “Bearer” Shares?

In short bearer shares are a form of Company Shareholding whereby when the Company is formed and the share certificate is printed the name of the shareholder on the certificate reads “The Bearer hereof”. In other words whoever physically holds the share certificate is considered to be the shareholder of the Company. (Company Law 101: If you own 100% of the issue shares in a Company you own the Company).

Historically in the case of a Bearer Share Company, in the share register the name of the recorded shareholder reads “Bearer”. To transfer ownership of a Bearer Share Company you simply hand over the share certificate to the new owner. (That said, for the transfer of ownership to be complete at law ideally a share sale/purchase agreement should be entered into and consideration ie payment tendered).

Where Can You Form a Nil Tax Bearer Share Company?

Whilst 90% of tax advantaged jurisdictions have abolished the use of Bearer Shares there are 4 tax haven jurisdictions that still permit the use of Bearer Shares ie Panama, Marshall Islands The British Virgin Islands (“BVI”) & St Vincent & The Grenadines.

BVI Bearer Share Companies

A BVI International Business Company (“IBC”) can issue a wide range of shares including Bearer Shares (although a significantly higher government incorporation/annual renewal fee applies to Bearer Share Companies incorporated in the BVI).

The new BVI IBC legislation provides:

(a) that all bearer shares must be “immobilized”. What this means is that any BVI IBC share certificates issued to Bearer must be held by an approved/licensed custodian (eg a Bank or Law Firm or Licensed International Corporate Service Provider).

(b) In the custodian’s file a written declaration must be held noting the actual identity and address of the owner of such shares.

(c) It’s not possible to transfer ownership of a Bearer Share Certificate by just handing over ownership to the new owner/holder. A Written instrument of transfer must be executed and KYC provided (eg proof of identity and address) to the Custodian as regards the new owner.

Panama Bearer Share Companies

Like the BVI a Panama Company can issue a wide range of shares, including Bearer Shares.

In 2015 however Panama passed legislation to effectively immobilize Bearer Share Certificates. In short, like in the BVI you can incorporate a Company in Panama with Bearer Shares but the share certificate/s must be held by an approved/licensed Custodian and KYC provided to the Custodian as regards the shareholder/owner’s ID and address.

Approved categories of Custodian in Panama include (a) local authorized custodians, and (b) foreign authorized custodians. Categories of local custodian include:

(i) A bank holding a general license

(ii) Trust companies authorized by the Panama Bank Superintendence

(iii) Brokerage houses and securities clearing houses authorized by the Securities Market Superintendence; &

(iv) Attorneys at law certified as such by the Supreme Court of Justice in Panama.

Non local Banks, trust companies, and financial intermediaries may be foreign authorized custodians if they hold a license for practicing of such business in their jurisdiction of domicile AND providing that jurisdiction is (a) a member of the Financial Action Task Force (FATF) on Money Laundering or (b) is an associated member that is registered with the SBP.

Rights over Certificates in Custody in Panama

The ownership of shares held by a Custodian may be transferred without need for the physical delivery of the certificate/s, provided (i) that the owner advises the Custodian that he/she has made the transfer and (ii) that the acquirer submits a sworn statement to the custodian that includes the required information (name and identification data, as well as contact data as regards the new owner).

The Panama law provides also for an interesting pledge system that allows for the creation of an encumbrance on bearer shares in custody, by the owner merely giving notice to the authorized custodian whereby he/she advises the pledging of the shares as well as the lienholder’s full name, physical address, telephone number, and email address.

Uniquely, a special inheritance disposition system has been created for Panama Company bearer shares that allows the owner of such shares to automatically dispose of their shares on death to a nominated successor, without need for the transfer of ownership such shares being subject to a formal granting of probate (That is a process whereby a competent Court approves a Will and the distribution of assets pursuant thereto).

Marshall Islands Bearer Share Companies

In March 2018 the Republic of the Marshall Islands (“RMI”) amended its IBC Legislation to provide for several changes including changes as regards to the use of Bearer Shares.

The effects of the RMI amendment in relation to Bearer Shares are:

(a) Marshall Islands Bearer Share Companies must now take all reasonable steps to maintain up-to-date records of all shareholders and beneficial owners of bearer shares (as well as any later share transfers).

(b) In order to maintain the validity at law of bearer shares in a Marshall Islands Company (including any and all rights and privileges attaching to such shares), the above-referred records must be filed/kept with the corporation’s registered agent in the RMI.

(c) Bearer share information is recorded with the registered agent by completing the forms “Declaration of Holders and Beneficial Owners of Bearer Shares” or “Declaration of Transfer of Bearer Shares”. The forms can be obtained by either contacting your RMI Company Formation Agent or the RMI FSA directly.

Interestingly in the RMI Bearer shares do not have to be held by an approved Custodian.

St Vincent & The Grenadines Bearer Share Companies

St Vincent & The Grenadines (“SVG”) IBCs are still permitted to issue bearer shares save that, like in Panama and the BVI, such shares must be held by an approved custodian.

Conclusion

It is still possible to incorporate a Private Tax-Free Company with bearer shares however its becoming increasingly harder to open bank accounts for Bearer Share companies.

If you want to form an Offshore Company without your name appearing in any official record as the shareholder of the Company (and have the widest choice of banks) you’d probably be better off to incorporate a Company with a (nil tax jurisdiction resident) Nominee Shareholder (which most CSP firms, like OCI, can provide).

Moreover if you don’t want your name appearing in any official records as the “beneficial owner” of an/your Offshore Company (which in most cases would give rise to reporting/tax obligations onshore) you’d be wise to include a Private Foundation as part of your Corporate structure (in particular a Seychelles Foundation). Check these links for details:

https://offshoreincorporate.com/private-interest-foundations/

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

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

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

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

Crypto Token Startup Predicts Cryptocurrency Surge

Wearing a crypto coin on her necklace, Grace Wong is upbeat about the future of cryptocurrency as Facebook gets set to enter the space with Libra.

“We’re basically making blockchain very easy and making it very usable for normal people to use,” Wong says.

As cryptocurrencies begin to climb again following a prolonged slump, Ms Wong, the co-founder of loyalty startup Liven says if Facebook succeeds in launching Libra midway through next year as planned it will boost startups in the sector.

Liven raised $10 million earlier this year for its dining rewards platform in which its 500,000 users earn cash rewards for eating out and can use Liven’s digital currency, LVN tokens, to buy food and drinks.

Giving Users a Crypto Incentive

Wong is back at her desk after spending a week on entrepreneur Richard Branson’s Necker Island with the Virgin founder and some of the Facebook team behind Libra. She believes Liven will complement the cryptocurrency when it is launched.

“We basically give people a real business incentive,” she says. “Why are restaurants working with us? Why are customers using us, not because of Bitcoin, not because of crypto, but because it helps them make life easier.”

Wong says Facebook is trying to target the billions of people who are “unbanked” without credit cards or bank accounts and so can use Libra to make and receive payments.

Lending legitimacy

Alan Tsen, chair of Fintech Australia, says established players such as Facebook entering the market validates interest in blockchain technology and cryptocurrency.

It’s a view shared by Kain Warwick, founder of synthetic asset trading platform Synthetix, who pivoted his startup last year from a stablecoin offering (a cryptocurrency designed to minimise volatility).

“Part of the reason we pivoted was we saw this trend emerging of large multinationals like JP Morgan and Facebook moving into this space,” he says. “It lends legitimacy that this is a sector it is worth paying attention to. That provides opportunity for other startups and fintechs in the space to get attention.”

Regulatory Concerns

United States regulators are very skeptical of the motivation for Facebook for launching a payments network.

Warwick says we are in the midst of a “crypto Spring” with increased volume on exchanges and Bitcoin back over $10,000, its highest value since mid 2018.

However, he warned it still remains to be seen as to whether Facebook can launch from a regulatory perspective.

“United States regulators are very sceptical of the motivation for Facebook for launching a payments network,” he says.In contrast Warwick says Australian regulators have been “fairly permissive” when it comes to cryptocurrencies.

Regulators are watching Facebook closely with the tech giant’s head of blockchain projects, David Marcus, testifying before the Senate Banking Committee and the House Financial Services Committee in the US last week.

Marcus faced criticism for plans to headquarter and regulate the Libra Association in Switzerland.

A spokesperson for Facebook Australia declined to comment on Libra’s launch in Australia.

Why Banks should fear Facebook’s Libra?

“The next stage will be to gather feedback and work through our proposals with global regulatory bodies,” the Libra spokesperson said.

Wong concedes some customers are sceptical about Facebook’s involvement in cryptocurrency given the concerns that have been raised about privacy and trust at Facebook.

“That’s because people don’t understand the fact that Facebook doesn’t own the currency,” she says. “Facebook is just one of many other founding members. For Facebook it is actually the best approach because people don’t trust them, with a block chain it is all about transparency and about accountability.”

Sydney Morning Herald

Are You Looking to Launch a Crypto Token or a New Cryptocurrency?

If so you’ll be pleased to know that such a business lends itself well to a (potentially tax free) Offshore Corporate Structuring Plan. in particular the jurisdiction of Seychelles has recently given the green light for Utility Token Startups to incorporate, as of right, as a tax free IBC (International Business Company): Such a business can now be incorporated in Seychelles without needing to apply for any form of Special License!

For details in regards to Seychelles and Seychelles IBC Formations check this link: https://offshoreincorporate.com/seychelles-offshore-companies/

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

LLCs – WHAT IS (&DO I NEED) AN OPERATING AGREEMENT

An LLC Operating Agreement is a legal document that outlines the ownership and member duties of your Limited Liability Company (“LLC”).

This agreement allows you to set out the financial and working relations among business owners (“members”) and between members and managers.

An LLC operating agreement customizes the terms of an LLC according to the specific needs of its owners. It also outlines the financial and functional decision-making in a structured manner. It is similar to Articles of Incorporation that govern the operations of a corporation. To take full advantage of having an LLC, you should go one step further and write an operating agreement during the startup process. Many tend to overlook this crucial document since it is not a mandatory requirement in most LLC jurisdictions; it is nonetheless considered a crucial document that should be included when setting up a limited liability company.

The operating agreement is thus a document which spells out the terms of a limited liability company (LLC) according to the members. It sets forth the path for the business to follow and brings in more clarity in operations and management. An LLC operating agreement is a 10- to 20-page contract document which sets up guidelines and rules for an LLC.

The document, once signed by each member (owners), acts as a binding set of rules for them to adhere. The document is drafted to allow owners to govern the internal operations according to their own rules and specifications. The absence of this document means that your business has to be run according to the default rules of the LLC Jurisdiction.

Even if an Operating Agreement is not required in your preferred LLC jurisdiction, it is strongly recommended to have one:

• If you have business partners (Multi-Member LLC):

An operating agreement will help prevent misunderstandings by setting clear expectations about partner roles and responsibilities.

• If you are the sole owner of an LLC (Single Member LLC):

Creating an operating agreement brings credibility to your LLC. This helps to ensure courts uphold limited liability status of your LLC.

The form and contents of operating agreements vary widely, but typically an Operating Agreement will typically cover 7 areas/topics: Organization, Management and Voting, Capital Contributions, Distributions, Membership Changes, and Dissolution.

Article I: Organization

The first section of the operating agreement deals with the creation of the company. It covers when the company is created, who the members are, and the structure of ownership. If there are multiple members, they may all have equal ownership or different amounts of “units” of ownership.

Article II: Management and Voting

This section addresses how the company is managed and how the members vote.

• The company may be managed by the members or by one or managers that are appointed by the members, and the operating agreement specifies what authority the members or more have over company affairs.

• The company may choose to make decisions though a voting process. Votes may be allocated among the members in any number of ways, including one vote per member, one vote per unit of ownership interest (if the company ownership is described in terms of units), etc. The operating agreement may specify what amount of votes is required for particular actions by the company.

Article III: Capital Contributions

This section covers which members have given money to start the LLC. It also discusses how additional money will be raised by members. For example, an LLC can choose to issue ownership “units” in exchange for money.

Article IV: Distributions

This section provides how the company’s profits and losses are shared among members. This might include money, physical property, or other business assets.

Article V: Membership Changes

This section describes the process for adding or removing members. It also states if and when members can transfer their ownership of the company. For example, the company will want to specify what happens if a member dies, a member goes bankrupt, two members divorce, etc.

Article VI: Dissolution

This section of the operating agreement will explain the circumstances in which the company may be or must be dissolved. This is sometimes called “winding up” the affairs of the company.

HOW TO SELL DATABASES &/OR QUALIFIED LEADS USING AN OFFSHORE COMPANY

Anyone who has ever been in business knows that it’s all well and good to have a great product but unless you can introduce the product (or service) to people or businesses who might want to buy the product (or service) you’ll wind up going bankrupt very quickly.

Once way to generate sales is to approach qualified leads direct, ie persons who you know for sure might be interested in buying or who would definitely have need to buy a product like yours.

So how do you generate these leads?

Data mining is often the answer. That is you search the nett for persons or businesses who you know have regular need of such product.

There are specialized business on the nett who will do this for you. That is there are firms who will find qualified sales leads for certain product or services and then either sell the prospective client list (ie an entire database including names and contact details of prospects/leads database) to you or they will allow you to utilize the data (ie to connect with the qualified leads) and then charge a percentage or fee for each sale generated by the provision of the qualified lead.

If you are in the business of datamining or lead generation you’ll be pleased to know that such a business lends itself well to an “Offshore” Corporate structuring Plan.

In principle here’s how it can work:

An offshore company (commonly an International Business Company “IBC”) is incorporated in a country that either has no Company tax or which has a territorial tax system (ie it only taxes income sourced inside the country of incorporation.
The Company would be seen to managed and controlled from Offshore (ie the Company’s Director/s would be based in a zero tax jurisdiction)
You design a website to be the shopfront of your business
Given that sales leads and databases can be supplied by way of soft files there should be no need to have any physical store or office. That is your business will be web-based.
The IBC owns/operates the web based business (eg ownership of the web-domain and the website/artworks or trademark/s or any sole distributor rights are held by or transferred to the IBC)
An Offshore account (which received payments via a merchant account) is set up in a nil tax banking centre
Ideally the server is located in a country which does not share data or tax business on the basis of server location (eg Iceland).
Your product is offered and marketed online. Customers find you on the internet.
Your terms and conditions (ie your customer contract or order form) would/should have special clauses included noting that the situs of the contract is “Offshore”. Simply put you would have special terms providing that the bargain has been struck “Offshore” (ie in the nil tax jurisdiction/s wherein the Company’s Director/s is/are based)

10.Customers order your services online and contract with and pay the IBC. The Services are delivered via the website or via your website’s domain email account/server

11.All monies generated from such sale are banked free of tax in the first instance.

12.You or your local company could/would be contracted by the IBC to manage sales/delivery of product/website maintenance/whatever.

13.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.

14.Often there is some kind of intellectual property (“IP”) created or behind the website based business (even if it’s just the website/design). It may be advantageous to you down the track if ownership of the business and the IP were held by 2 different entities. What you can do there is set up a 2^nd IBC to own the IP. The first IBC (ie the Trading Company) pays license fees periodically to the 2^nd IBC which fees wold be receipted tax free. This could be advantageous if you wanted to bring ownership of the web-business onshore or if you wanted to sell the business but keep a passive (potentially tax free) income stream

15.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 onshore to take orders and receive income in a low tax onshore environment (eh Hong Kong, Ireland, Singapore, Cyprus etc as per the Amazon/Google model)

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/

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

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

What Happens if I Don’t Renew My Offshore Company?

Do you own or have you formed a tax-free Offshore Company or IBC or LLC?

Do you/the Company need to (or wish to):

1. Retain ownership of existing investments/assets; or

2. Purchase further assets in the next 12 months; or

3. Continue doing business or trading; or

4. Receive any investment returns owed to the entity; or

5. Avoid having the entity’s account closed and funds frozen; or

6. Avoid incurring any personal liability for debts incurred by the Company

then the Company’s annual operating license will need to be renewed.

If the annual operating license isn’t renewed by the due date (ie usually the anniversary of the Company’s Incorporation Date) the Registry will levy additional fees that increase with time.

Typically, if the Company’s annual operating license is not renewed within 12 months of the due date, the Company will be struck off the registrar.

Depending on where it is incorporated, the Company can be reinstated to the register (ie “brought back into Good Standing”) but usually only within 3 years of being struck off. Sometimes longer.

The main risks of not renewing your Company’s annual operating license are:

(a) Funds can be frozen by the Company’s Bankers

(b) You can be made personally liable for any debts incurred by the Company

(c) You may risk an asset sale contract falling through eg if you’re selling the Company, or some asset owned by the Company, and the seller finds out close to the settlement date/time that the Company is not in Good Standing the contract could fall over (especially if time is “of the essence” in the contract)

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

www.offshoreincorporate.com

info@offshorecompaniesinternational.com