These days the Delaware C Corporation (also known as a General Corporation) is the most commonly incorporated Company type in Delaware.

Entrepreneurs are attracted by the Delaware C Corp’s ability to go public and raise capital by selling shares in the company. This type of corporation is also often used by startups looking to attract venture capital.

The Delaware C Corp has a typical Corporate/Legal structure: shareholders own the company via shareholdings, Directors run the company and are responsible for its strategic management, whilst officers (eg Managers, the CEO etc) manage the company’s day-to-day business.

Are You Thinking of Going Public?

So you market, or are about to market, a unique service or product! Your business is up and running and is growing (or is in the incubator stage). If you are in this position, you may find yourself, before too long, weighing up the option of going public.

Offering shares in your company to the general public for the first time is called an Initial Public Offering, or IPO. If you’re considering where or how to launch your IPO, look no further than Delaware. Almost all American IPOs in the last 25 years have been launched under the framework of a Delaware General Corporation (ic C Corp).

Delaware C Corp – General

So what is a Delaware General Corporation/C- Corp?

A Delaware General Corporation has three pillars of influence: shareholders, Directors and Officers. Each of these groups has different rights and responsibilities within the corporation.

Shareholders

The shareholders of a C Corp own the company, but do not manage the company. Typically, holders of common stock receive one vote for each share they own, and they have the right to elect the members of the Board of Directors. (They also have the right to vote on certain other matters of major significance to the company).

Any stockholder who holds a majority of the issued shares in a C Corp can control the company. Majority shareholders typically hold a larger amount of responsibility / power than minority shareholders.

Generally, minority shareholders hold no responsibility for, or re, the company, and are able to assign, via proxy format, their votes to anyone of their choosing. Typically minority shareholders can also sell their shares whenever they want (though this can be modified by reference to a Shareholder’s agreement).

C Corp Shareholders can/will receive 2 potential benefits: first, dividends (ie a share of the company’s profits) paid in proportion to the percentage of stock held (ie when/if the Board of Directors decided to declare a dividend); and second, by the increased value of their shares as the company grows.

Directors

The Directors run the company and are responsible for the company’s overall management/direction/results. They take responsibility for all major business actions, such as the issuance of shares, the hiring of officers, the hiring of key management, commercial decisions, the establishment of corporate policies’ and the setting of salaries and compensation packages.

The Board of Directors decides if a dividend will be paid to the shareholders and, if so, how much. Individual directors may also own shares in a C Corp.

Directors of a Delaware C Corp have certain fiduciary responsibilities to the company (known as Directors duties). They must be loyal to and not in conflict with the company; they must make informed, independent decisions; they must not act in bad faith (eg as self-dealing or fraudulent dealings); and they must act in the best interests of the company and its shareholders.

Directors may make decisions and take action in pre-schedules meetings (ie where a quorum is present, or without a meeting – by unanimous written consent of all Directors. Directors cannot donate or sell their votes to other directors, nor can they vote by proxy.

Ordinarily, Directors may be removed and replaced – with or without cause - by the majority vote of the shareholders. (This is why a majority shareholder can/does control the company).

Officers

The officers of the company work for the Board of Directors and handle the day-to-day business of the company. Officers carry out the Board’s decisions and implement the Board’s policy. Officers are usually the President, Vice President, Secretary and Treasurer. However, the Board may appoint other officers, such as a C.E.O., C.F.O., C.I.O., Sales Manager, Operations Manager or any other title ithe Board may wish to create.

Officers may be compensated with shares, or they may buy shares in the company as the Board of Directors may decide.

Why Delaware?

There are several good reasons why almost all US IPOs are Delaware general corporations/C Corps: Smart Investors don’t invest in good ideas – they prefer to invest where they can see they will receive/own a tangible, measurable proportion of the Company’s profits originating from the ideas. A shareholding offers such certainty.

Many IPO Professional Advisers would say that, through its general corporation provisions, Delaware offers the most versatile and functional toolbox of share structures. Stock choices available to a Delaware C Corp include blank check preferred stock, super-voting powers, stock options and stock warrants. With these features, + the added ability to tailor shareholders entitlements via reference to a shareholders’ agreement, a Delaware C Corp can provide entrepreneurs with a number of ways to attract investors.

Blank check preferred stock is one common example of a left field way to attract or secure an investor. You can structure your Delaware C Corp right from the start with an optional second class of stock that gives you the latitude to offer special deals to certain/significant investors.

Another such option is Preferred stock. Preferred stock lets you negotiate dividend rights, the votes per share, the security interests in the company’s assets and the potential to convert the preferred shares into common shares at a future date. Preferred stock can be very attractive to investors,  yet costs very little to issue.

Below are just two examples of how preferred stock can act in your favor in an IPO.

Using Preferred Stock to Attract an Investor

Let’s say you have an investor or interested party who, for whatever reason, hasn’t demanded shares in exchange for his or her investment, until now. To date the investor has put nominal sums into the business but now, on the verge of your IPO, wants a major percentage of the shares to be issued.

A Delaware C Corp can enable you to approach that investor and offer a very attractive deal: The terms of the deal are negotiable as, under Delaware law, you have the flexibility to reach a deal on terms agreeable to both sides.

You might, for example, offer the investor, 100,000 shares of (preferred) stock at $10 each with preferential terms, such as: 1) a guaranteed annual dividend of $1.00 per share (thus guaranteeing a 10 percent return to the investor); 2) no voting rights until the company goes public (meaning – you’re not diluting your own power); and 3) the preferred stock would be transferable to 1,000,000 shares of common stock one year after the Company goes public. The end result? You’ve delivered to the investor the prospect of a substantial return on his/her investment without diluting your ownership stake!

Keeping Control

If you’ve been unusually successful at raising investor capital before the public offering, it’s possible that your share of ownership has shrunk (or is in danger of shrinking) to close to 51 percent (at which level you only just have control of the company).

To ensure you retain control well into the future, at that point, (ie while you still retain majority control of the company), what you could do is you could issue 100,000 shares of preferred stock to yourself with certain special terms eg: 1) no dividend entitlements (thus eliminating potential investor objections); and 2) voting rights of 100 votes per share on all matters shareholders might vote on (thus maintaning your voting power notwithstanding that you may have divested yourself of more than 50% of the common stock).

Even if you continue to attract investment money that further dilutes your ownership percentage, in this scenario you have delivered yourself 10,000,000 extra votes, which is more than enough to offset the voting rights of the other outstanding shares.

Stock Offerings

The issuing of Common stock in the case of a Delaware C Corp is governed by law; each share of common stock in a Delaware C Corp is entitled to one vote, and common shareholders are entitled to a proportionate share of common stock dividends (if a dividend is declared) ie in proportion to the percentage of shares they hold.

Contrast that with Preferred stock which has no set prescription or formula under Delaware law. Preferred stock in a Delaware C Corp can be issued with or without voting rights and the Stocks’ terms are open and limited only by what the Board of Directors and Investors negotiate. In short Preferred stock in a Delaware C Corp can be structured in such a way as to offer the investors preferential financial assurances without the investors receiving voting rights.

A Delaware C Corp does not have to issue Preferred stock or Common stock – they can be deployed in tandem. In fact, one common method of preserving insider voting control when raising investment capital is to use preferred stock in addition to common stock.

In some preferred stock designs, certain stockholders may be entitled to superior dividends and/or liquidation rights (ie in the event that the company files for bankruptcy protection) and/or afforded other considerations. Additionally, a Delaware C Cop can retain the right to buy out preferred stockholders at a given price, or at a certain date in the future for a price based upon a particular formula. The flexibility and adaptability of the preferred stock model truly represents one of the prime advantages of the Delaware C Corp legislation.

Preferred Stock – Other Key Elements

Some corporate lawyers refer to Delaware C Corp stock as “blank check preferred stock” because the scenarios described above are both possible with the same class of preferred stock. So, too, are other scenarios if you have issued enough preferred stock – you simply classify the stock into different series and make arrangements with investors as circumstances dictate.

If the preferred stock has already been authorized, you can issue it to the investor on a same-day basis and complete the deal without a lengthy escrow period (ie/eg if doing so is to your advantage). The “blank check” reference arises from the fact that in effect you are issuing pieces of paper as you proceed, as many as required (providing investors accept them) in order to generate capital.

Another important thing for IPOs to be aware of is a basic principle of Delaware company law, ie in a Delaware general corporation/C- Corp, the Directors set the price of the stock. What this means is that the price of your stock is set by what the Directors say it is worth and/or by what investors believe it is worth (ie regardless of what the actual value of capital or assets held by the Company may be). The investors are in effect gambling on the future viability of your company – their judgment as to the future value of your company is what determines the share price, both when you sell it initially and when it sells on the open market.

How Much Stock?

A key matter you will need to resolve before you form your Delaware general corporation/C-Corp is what is the quantum of shares of stock to issue?

In arriving at the conclusion of that conundrum you will firstly need to ask yourself these two questions:

1. How much capital do I/we need to raise? &

2. What percentage of the company am I willing to forsake for that amount of money?

Let’s assume you plan to raise, via private offering, (a) $100,000 in year 1, then (b) a further $1,000,000 via a second private offering in year 2, then (c) an additional $25 million via an IPO after three or four years.

Say for the first offering ($100,000), you’ve decided you’ll give up 10% of the company, and then another 25% for the second offering of $1 million (which means you will have parted with 35% of the Company all up before you go public).

In this scenario, you would own 65% of the Company at the time of your IPO. However, going public is rarely that straight forward. Let’s assume (a) you’ll need to set aside some stock, or stock options, to attract gun staff and (b) you’ll probably need to assume that other needs will also eat into your ownership stake.

This is when blank check preferred stock can come into play: As your ownership percentage of common stock shrinks, you can retain majority voting rights (and control of the Company) via issuance of preferred stock as you may specify. This will enable you to achieve a balance between attracting investors (along with productive coworkers) while avoiding the prospect of being voted out and losing control of your company.

Once you’ve decided the quantum of capital you want/need to raise, you’ll then need to decide the number of shares and the value of each in order to reach that figure.

In many situations, a general corporation (often referred to as a stock corporation, open corporation or C corporation), is recommended, especially when a Company goes public or plans a private Offering of Stock.

General corporations are also typically used when a company wants to attract Venture Capital Funding.

A cautionary note: Anyone can own part of a Delaware C-Corp, but there are a limited number of owners you can take in before the SEC potentially gets involved. Moreover you can’t advertise the sale without the SEC getting involved ie you can’t offer the investment online (hey, want to invest in my company? ads are not allowed). That said, if you know someone that wants to invest in your company it’s fine to sell them stock (ie private equity rounds are fine).

Before you incorporate a Delaware C Corp you should look up the SEC minimums and regulations to make sure you are following them.

Local laws can have an impact. Hence you should also seek appropriate legal financial and tax advice before committing to commit a Delaware C Corp.

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

Given the decline of the Brazilian Economy (and the resulting political uncertainty), if you are based in Brazil and have a few dollars/assets no doubt you’d be looking at ways to protect those assets. For maximum certainty, ideally, you will be looking for ways to safely move those assets out of Brazil.

The solution is to set up an Offshore Corporate or Fiduciary entity and then transfer ownership of the assets to that entity.

As a minimum what you should do is set up a Company in a Privacy Haven (that is somewhere that doesn’t have a public register of Directors Shareholders or Beneficial Owners) to take ownership of the asset/s in the first instance.

For maximum security, what you could/should then do is set up a Private Foundation to hold the shares of your Offshore Company (and for ultimate protection transfer ownership of the asset/s from the Company to the Foundation).

Ideally, to minimize the chances of the Brazilian Authorities finding out who’s behind the Offshore Company, you will want to incorporate your Company (and your Foundation) in a country which has not signed a Tax Information Exchange Agreement (“TIEA”) with Brazil.

Jurisdiction etc Options

If that plan makes sense to you, you might want to take a close look at the following jurisdictions – as all offer ownership privacy, none of them have signed a TIEA (ie Tax Information Exchange Agreement) with Brazil and all charge no tax on profits realized outside the country of incorporation/registration:

• Seychelles: http://offshoreincorporate.com/seychelles-offshore-companies/
• Belize: http://offshoreincorporate.com/belize-offshore-companies/
• Anguilla: http://offshoreincorporate.com/anguillan-ibcs/
• Nevis: http://offshoreincorporate.com/st-kitts-and-nevis-offshore-companies/
• RAK – For detailed information (including pricing info) check this link: https://www.dropbox.com/s/rey4ml7nkgq19eu/RAK%20Offshore%20Companies.docx?dl=0
• US LLC/IBC Combo – For detailed information (including pricing info) check this link: https://www.dropbox.com/s/zunxtlubpm6bs8k/How%20An%20LLC%20%26%20IBC%20Combo%20Option%20Works.docx?dl=0

By far the most popular place to incorporate an Offshore Company is Hong Kong. Check the following link which explains why: https://www.dropbox.com/s/4g1xroin3c8vkoa/Why%20Incorporate%20in%20Hong%20Kong.docx?dl=0

If you want to have the option of only having to declare in Brazil income actually paid to you by the Offshore Company:

(a)  As Brazil has CFC ie Controlled Foreign Corporation Laws, it would be wise to include a Foundation as part of the Corporate structure. Check the following link which explains why, in detail: https://www.dropbox.com/s/fgv089hjpv5d7e6/Why%20set%20up%20a%20Foundation.pdf?dl=0

(b)  For maximum privacy and to minimize the chances of your Offshore Company being taxed onshore (as a Company which is seen to be managed and controlled from onshore can be taxed onshore) you would be wise to include a Nominee Director/Shareholder as part of the Corporate Structure. For information on how/why that will work for you (and for guidance on whether to select Nominee Services or not) please read these pages:

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/

New/local laws can have an impact. Hence you should seek local legal financial and tax advice before committing to establish an Offshore Corporate or Fiduciary Structure.

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

The Isle of Man is becoming a popular choice of jurisdiction for Cryptosphere Entrepreneurs looking for a middle ground solution between excessive regulation and zero regulation.

In short you can incorporate an ICO in the Isle of Man (“IOM”) and have the business officially registered as an ICO without needing to go through a formal license application such as exists in other Financial Centres.

Below is a series of Commonly Asked Questions (and Answers thereto) recently published by the IOM Authorities which should provide a neat summary of everything you will want/need to know when beginning your assessment as to the viability of choosing the Isle of Man as your preferred ICO Launch site:

Where does the business of issuing Convertible Virtual Currency (“CVC”) (such as via an Initial Coin Offering “ICO”) fit in Isle of Man legislation?

In April 2015 the Proceeds of Crime (Business in the Regulated Sector) Order 2015 amended Schedule 4 to the Proceeds of Crime Act 2008 which lists all of those businesses considered by that Act to be “Business in the Regulated Sector”. One type of such business is convertible virtual currency business which Schedule 4(1) (mm) to that Act describes as:

the business of issuing, transmitting, transferring, providing safe custody or storage of, administering, managing, lending, buying, selling, exchanging or otherwise trading or intermediating convertible virtual currencies, including crypto-currencies or similar concepts where the concept is accepted by persons as a means of payment for goods or services, a unit of account, a store of value or a commodity (emphasis added)

Therefore issuing CVC (which could be via an ICO or other concept), in or from the Island falls under the above definition and so is classed as “Business in the Regulated Sector”.

So does this mean that all business areas listed as “Business in the Regulated Sector” under Schedule 4 to the Proceeds of Crime Act 2008 are regulated by the Isle of Man Financial Services Authority (“IOMFSA”)?

No. “Business in the Regulated Sector” does not necessarily mean that the business is regulated in the contemporary sense of the word.

“Business in the Regulated Sector” for the purposes of the Proceeds of Crime Act 2008 means that additional legislation applies to those businesses (namely the Anti-Money Laundering and Countering the Financing of Terrorism Code 2015 or “the Code”).

Many of the business sectors in Schedule 4 are fully regulated by the IOMFSA, for example, under the Financial Services Act 2008 or the Insurance Act 2008. These businesses are subject to a wide array of regulatory controls and are subject to detailed scrutiny as required by the terms of the legislation they are regulated under.

Some businesses listed under Schedule 4 are only overseen for compliance with the Code. These businesses are called Designated Businesses. Their oversight does not extend to conduct of business, prudential and solvency regulation or protection of client assets. For the avoidance of doubt, businesses operating as CVC businesses (including ICOs) fall under this category.

If I am registered, what are my legal obligations?

The Designated Businesses (Registration and Oversight) Act 2015 imposes a number of obligations on the business. Some of those requirements include that it must keep all of the information submitted as part of its application for registration accurate and up to date, file an annual return and provide information or documentation to the IOMFSA upon request.

The AML/CFT obligations imposed on the business are detailed in the Code. In summary it requires that the business must identify and take reasonable steps to verify the identity of their customers including the beneficial owners of the customers and any persons who are empowered to act on their customers’ behalf. The Code also requires that the business must assess the risks facing it as well as the risks posed by its customers and monitor the transactions and activity of the customers on an ongoing basis.

Can I start the pre-sale of a token or coin before being registered or while the registration is being processed?

No. The business of selling or issuing a convertible virtual currency is undertaking a designated business. No distinction is made as to whether the sale or issuance of a CVC is undertaken as a pre-sale or after a public launch. Care should also be taken to ensure that the business is not holding out as undertaking a designated business prior to its registration.

So, if an ICO business is “overseen” by the IOMFSA for AML/CFT compliance, is it therefore “licensed”, “authorised” or otherwise regulated by the IOMFSA or hold a “cryptocurrency licence”?

No. The business of issuing, transmitting, transferring, providing safe custody or storage of, administering, managing, lending, buying, selling, exchanging or otherwise trading or intermediating convertible virtual currencies is a Designated Business as defined by Schedule 1 to the Designated Businesses (Registration and Oversight) Act 2015. This means it is subject to registration under that Act – not financial services regulation.

A Designated Business is not a regulated entity and must not hold out that it is anything but a registered Designated Business.

Are there any types of CVC business (including ICOs) which the IOMFSA would refuse to register?

The IOMFSA has published a registration policy which outlines what it expects of an applicant in terms of fitness and propriety.

In addition to this general registration policy, it is the IOMFSA’s policy to refuse to register an applicant which engages in the CVC business of issuing a CVC (of whatever type) where the CVC issued provides no benefit to the purchaser other than the CVC itself.

Examples of this include, but are not restricted to:

• · ICOs which convey:

- limited or no rights to the income generated from a project;

- limited or no rights to use the assets developed, purchased or acquired from the funds raised by the ICO;

• · ICOs where there is no reasonable basis for any expected capital growth of the value of the CVC.

Such characteristics are generally considered by the IOMFSA to pose an unacceptably high risk that the money raised from the CVC issuance could be used for unanticipated and illegal purposes, as well as posing a risk to consumers. It is because of these risks that it is the policy of the IOMFSA to refuse to register this type of business.

If a Designated Business is registered with the IOMFSA, is it required to state this on its website and other correspondence?

There is no requirement on a registered Designated Business to state that it is registered under the Designated Businesses (Registration and Oversight) Act 2015 to persons with whom it has communications in the course of its business. However where a business chooses to make such a reference, it should be made very clear that the business is registered under the Designated Businesses (Registration and Oversight) Act 2015 and the business must not ‘hold out’ that it is regulated.

Where a business is “registered” with the IOMFSA as a Designated Business, what requirements are imposed on the registered business?

As noted above, all businesses listed in Schedule 4 to the Proceeds of Crime Act 2008 are required to comply with the Anti-Money Laundering and Countering the Financing of Terrorism Code 2015 (‘the Code’). The IOMFSA has powers under the Designated Businesses (Registration and Oversight) Act 2015 to oversee compliance with the Anti-Money Laundering and Countering the Financing of Terrorism legislation (which includes the Code, including powers to inspect the accounts, books and records of the business and take copies of those records).

Further details about potential legal or regulatory obligations and how they impact your business should be sought from an independent legal practitioner prior to making an application for registration. No designated business must be undertaken without a registration.

How do I apply for registration to issue CVC (including via an ICO) on the island?

First you need to ensure your business is of a type the IOMFSA will register, and that it has the necessary number of Island directors and is managed and controlled from the Island (see the Designated Businesses Registration Policy page: https://www.iomfsa.im/designated-business/registration-policy/ ).

Then, to begin the process you need to create an account on the application system, to do this you can go through the link below: https://www.iomfsa.im/designated-business/registration-forms/

This page provides a high level outline of how to go about registering. At the bottom of the page is a link to the registration system itself, once you create an account you will be able to complete the application forms.

There is a detailed user guide which takes you through step-by-step how to use the system and how to complete the forms: https://www.iomfsa.im/media/1423/dnfbpuserguide.pdf

Does being registered under the Designated Business (Registration and Oversight) Act 2015 mean I can get a bank account and banking services in the Isle of Man?

No. Whether a bank will offer services to your business is a commercial decision for the bank to make and is a matter between your business and the bank.

CAUTIONARY NOTE: It would be highly advisable to engage an experienced International Corporate Service Provider to assist with formation of the Operating Company and with the ICO Registration Process. There are a number of unseen reefs you will need to successfully navigate your way around (ie legal boxes you will need to tick) in order to succeed with your registration application. Your chances of succeeding without specialist help would be greatly reduced. (The OCI Legal Team can provide such assistance).

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

Commodity Trading is an activity which lends itself well to an Offshore Corporate Structuring Plan.

To summarise how it would work is:

• You set up a zero tax International Business Company (“IBC”) with a nil jurisdiction based “Nominee” Director
• The IBC opens an account with a Broker
• You are appointed by the Company 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 wherever you are ordinarily resident for tax purposes though you should also be able to claim a sizeable amount of allowable deductions eg for home office, car, equipment, insurances, travel, stationary etc etc to reduce the amount of your “taxable” income at home)
• If you don’t want the authorities to know how much money you are earning by way of wages you could use an anonymous ATM or Debit/VISA card to withdraw your wages from an Auto Tele Machine
• The majority of trading profits could be reinvested Offshore potentially tax free.

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

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

If you are UK resident and own assets abroad (eg non-UK real estate), or if you receive (or are entitled to receive), outside the UK, income from a foreign source (eg dividends from non-UK companies), you may be affected by the new UK Requirement to Correct (RTC) rules.

The RTC rules oblige UK taxpayers to correct past non-compliance with their UK tax obligations by 30 September 2018. After this deadline, a new, higher penalty regime will apply.

It’s possible to get around these rules but you’ll need to move fast in order to avoid the 30 September deadline.

Essentially there are 2 things you could do to avoid having to make such a declaration:

(a)  Set up nil tax Offshore Company to own (ie take over ownership of) your foreign assets + set up a nil tax Private Foundation to own (ie hold the shares of) this Company; or

(b)  Set up a nil tax Private Foundation to own (ie take over ownership of) your foreign assets

Whether to set up (a) or (b) depends on what kind of assets you hold. If you simply own an asset that produces a passive income stream then a Foundation alone should suffice.

The key plank underlying the strategy is how you manage/reconstruct the issue of ownership.

The Private Foundation (which is essentially Europe’s version of a Trust) started life in Liechtenstein and then began to slowly make its way across Europe (eg in Holland a Private Foundation its called a Schtichting) before being embraced by sundry Offshore Jurisdictions (including Panama, Belize, Nevis. Mauritius, Seychelles etc).

Under European Common Law a Foundation (which, unlike a Trust, is a separate legal entity) is presumed to be both the legal and beneficial owner of any asset it holds. What this means, in event of a law suit or tax investigation or regulatory inquiry, is you can swear under oath “I am not the legal or beneficial owner of this Company/Asset”.

Moreover under European Common Law the beneficiaries of a Private Foundation are not entitled to a distribution from a/the Foundation unless or until such time as the Foundation Council actually resolves to pay the beneficiaries a Distribution. So you and your family could be nominated as beneficiaries of the Foundation without needing to make any Declaration under the Requirement To Correct Rules.

One jurisdiction has taken this a step further ie the Seychelles by codifying theses aspect of European Common Law and placing them into Legislation: Section 71 of the Seychelles Foundations Act provides that the legal and beneficial owner of any asset held by a Seychelles Foundation is the Foundation itself.

And section 63 provides in effect that the beneficiary of a Seychelles Foundation is not entitled to a distribution from a/the Foundation unless or until such time as the Foundation Council actually resolves to pay the beneficiary a Distribution.

Conclusion

If you have income producing assets outside of the UK that you’re yet to declare to the UK Authorities you can avoid the new UK Requirement To Correct Rules by setting up a Private Foundation and then transferring ownership of the asset/s in question to the Private Foundation (or to an Offshore Company owned by the Foundation).

Additionally, you should be able to avoid having to pay tax on any income generated by the Private Foundation and or Offshore Company ie you should only be liable to pay tax in the UK when you receive income from the Offshore Company or Private Foundation (assuming the Company/Foundation is structured/managed a certain way).

NB Local laws can have an impact. Hence you should seek local legal/tax/financial advice before committing to set up an Offshore Structure.

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

Background

The Federal Territory of Labuan is an island group, 92 sq km in size, with a population of 78,000 situated off the north-west coast of the former British Borneo and Brunei Darussalam. Labuan is part of Malaysia and comprises seven small islands of which Pulau Labuan is the largest. Labuan lies off the north-west coast of Borneo, 8 km from the Malaysian state of Sabah and is strategically located roughly equidistant from Bangkok, Hong Kong, Jakarta, Kuala Lumpur, Manila and Singapore. It is mostly flat with a good harbour and is accessible by air, with daily services from Kuala Lumpur and from most Asian capitals.

Labuan is located on the major shipping and air routes of the Asian Region and is Malaysia’s only deepwater harbour. It has a warm humid tropical climate, with daily temperatures averaging 30°C with two monsoon seasons ie from April to June and from September to December. The main language is Bahasam Melayu but English, Tamil and various Chinese dialects are widely spoken. Many documents and publications are available in English (including the Labuan offshore Legislation).

Political & Economic History

In 1984 the administration of Labuan was taken over by the Federal Government of Malaysia which consists of thirteen states and two federal territories (ie Kuala Lumpur and Labuan). Malaysia has an unusual political system with power held in the hands of nine hereditary sultans, who elect a head of state every five years from among their number. Legislative power is exercised by a bicameral parliament comprising of a House of Representatives (Dewan Rakyat) and a Senate (Dewan Negara), Executive power is held by the Prime Minister who governs with the assistance of a ministerial cabinet. Appointments are for a five year term.

Malaysia is economically strong and considered politically stable. Under the auspice of LOFSA (the Labuan Offshore Financial Services Authority) the Malaysian government has invested heavily in improving the physical infrastructure of Labuan which is now completely modernised and boasts a state of the art telecommunications system including an Internet Gateway which provides an e-commerce platform. More than 50 of the world’s top banks have branches in Labuan.

Advantages of Labuan Companies:

• All offshore business transactions attract no stamp duty and capital gains are not subject to any form of tax
• Not subject to Malaysian exchange controls
• Malaysia enjoys tariff reductions in the ASEAN Free Trade Area (AFTA), and has signed more than 60 Double Taxation Avoidance Treaties (“DTAs”)
• Malaysia boats an English style legal system
• Labuan IBFC offers a wide range of financial products and services (including both conventional and Islamic)
• Corporate documents are written in English
• There is no requirement to disclose to the authority the names of the beneficial owners of the Company
• Company names can be in a foreign language

Features of Labuan Companies:

• Speedy setup: A Labuan Company can be incorporated in as little as 3 days.
• It may use “(L)” as part of its name. An offshore company may also have as part of its name the word “Berhad” or “Bhd” but must then add the word “(L)”.
• There are no minimum share capital requirements. The share capital may be denominated in any currency except Malaysian Ringgit. Separate classes of shares may be created with differing rights to dividends or otherwise. A minimum of one shareholder is required to establish a company. Shareholder can be individuals or corporations. Shareholders need not be resident.
• Companies require a minimum of one director.
• Corporate Directors are permitted
• Directors may be resident in any country
• Only one shareholder minimum is required
• A Local secretary is required (which OCI Provides)
• Directors meetings can be held anywhere
• The standard authorised capital is US$ 10,000; divided in to 10,000 shares of US$ 1. The minimum issued capital is one share, which may be fully or partly paid.
• An annual return in the prescribed form made up to a date not earlier than 14 days before the date of lodgment is required to be lodged each year and not later than 30 days prior to the anniversary of the date of incorporation of the company.
• Classes of Shares Permitted: Registered shares of par value, preference shares, redeemable shares and shares with no voting rights.
• There is no exchange control in Malaysia. The Malaysian currency is the Ringgit (RM). Save for certain exceptions, offshore companies in Labuan are required to carry on business in a foreign currency.

Procedure to Incorporate

To incorporate an Offshore Company in Labuan you must submit to the Registry:

• Memorandum and Articles of Association,
• Consent form to act as a director,
• Statutory Declaration of Compliance with the Companies Act
• Certificate of Identity
• Statutory declaration by persons before appointments as directors
• The incorporation fee.

Company Name Options & Restrictions

Labuan Company names must include one of the following words, or an abbreviation thereof:
Corporation
Incorporated
Limited
Public Limited Company
Societe Anonyme
Sociedad Anonima
Aktiengesellschaft
Naamloze Vennootschap
Perseroan Terbat

Names resembling the name of an existing company or names that in the opinion of the Registrar suggest Royal or government patronage are not permitted. Names, which the Registrar considers undesirable, will be rejected. Certain names/words require consent or a license ie Bank, building society, insurance, assurance, reinsurance, fund management, investment fund, trust, trustees, Chamber of Commerce, university, municipal or their foreign language equivalents. Re Suffixes to Denote Limited Liability any of the following may be used: Limited, Incorporated, Corporation, Sociètè Anonyme, Sociedad Anonima or their relevant abbreviation. If the Malaysian word Berhad is used then it must be preceded by “(L)” to denote that the company is incorporated in Labuan.

Business Restrictions

A Labuan Offshore Company should only carry on business in, from or through Labuan. A Labuan Offshore Company may not:

(a)  Do business with a resident of Malaysia (except as permitted by the Offshore Banking Act 1990);

(b)  Carry on the business of Banking or Insurance or such similar business unless it is licensed so to do under the Offshore Banking Act 1990 or the Offshore Insurance Act 1990;

(c)   Do business in the Malaysian currency save for defraying its administrative and statutory costs;

(d)  Carry on the business of shipping or petroleum operations in Malaysia

(e)  Operate as a trust company.

Exceptions to carrying on business with residents of Malaysia:

A Labuan Offshore Company is not treated as carrying on business with residents of Malaysia if:

(i)                it makes or maintains deposits with a person carrying on business in Malaysia;

(ii)               it makes contact with professional advisers carrying on business in Malaysia;

(iii)            it prepares and maintains books and records in Malaysia;

(iv)            it acquires or holds any lease or property for operational purposes or accommodation of its employees;

(v)              it holds directors’ or members’ meetings within Malaysia;

(vi)            it holds shares, debt obligations, or other securities in a company incorporated under the Offshore Companies Act 1990 or in a domestic company, or holds shares, debts obligations or other securities for the purposes of a transaction entered in to in the ordinary course of a money-lending business.

Taxation

Labuan Offshore Trading Companies pay 3% tax on net audited profits or the sum of RM 20,000 (where no audit is required). Non-Trading companies are tax exempt.

The locality of profits from trading in goods and commodities is generally determined by the place where the contracts for purchase and sale is effected. “Effected” means more than where the contract is signed and includes the location of negotiation, conclusion and execution of the terms of the contracts.

If a Labuan Company earns commission by securing buyers for products or by securing suppliers of products required by customers, the activity which gives rise to the commission is the arrangement of the business to be transacted between the principals. The source of the income is the place where the activities of the commission agent are performed.

Double Taxation Agreements

To date Malaysia has signed 74 double taxation treaty agreements (DTAs), making its DTA network the most extensive in the region. Labuan companies can now make an irrevocable election to be taxed under the Malaysian Income Tax Act 1967 (ITA), thereby affording the Company access to all of Malaysia’s DTAs. A Labuan holding company which has a co-located office in Kuala Lumpur must make the election to be taxed under the ITA.

Malaysia’s DTA partners include: Albania, Argentina, Australia, Austria, Bahrain, Bangladesh, Belgium, Brunei, Canada, Chile, China, Croatia, Czech Republic, Denmark, Egypt, Fiji, Finland, France, Germany, Hungary, India, Indonesia, Iran, Ireland, Italy, Japan, Jordan, Kyrgyzstan, Kuwait, Kyrgyz, Laos, Lebanon, Luxembourg, Malta, Mauritius, Mongolia, Morocco, Myanmar, Namibia, Netherlands, New Zealand, Norway, Pakistan, Papua New Guinea, Philippines, Poland, Romania, Russia, San Marino, Saudi Arabia, Seychelles, Singapore, South Africa, South Korea, Spain, Sri Lanka, Sudan, Sweden, Switzerland, Syria, Taiwan (Income Tax Exemption Order), Thailand, Turkey, UAE, UK, USA, Uzbekistan, Venezuela and Vietnam.

Financial Records

A set of accounting records must be kept in Labuan.

A trading company, which pays 3% of audited net profits, is required to appoint an auditor and file audited financial statements. However trading companies which elect to pay tax of RM 20,000 p.a. are not required to file financial statements. Such companies are exempt from appointing an auditor if they have not carried out licensed activities and the members of the company have resolved that no auditor be appointed.

There is a filing fee for “adoption of accounts” and if the accounts of the Labuan Company have been audited, and for the “lodgement of the said audited accounts”.

A non-trading Labuan Company is not required to appoint an auditor nor file audited financial statements.

OCI Labuan Company Formation Services

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

Services:

• Unlimited name availability inquiries
• Advice from an experienced International Corporate Lawyer on how to structure your company
• Preparation (overseen by a lawyer) of application to incorporate the company
• Preparation (overseen by a lawyer) of the company’s memorandum of association
• Preparation (overseen by a lawyer) of the company’s articles of association
• Attending to filing incorporation request with the company registry
• Attending to payment of government filing fees
• One year’s Registered Agent service in the country of incorporation
• One year’s Registered Office service in the country of incorporation
• Mailing address in the country of incorporation
• Delivery of Incorp pack by international courier (ie DHL/Fedex/TNT etc)
• Unlimited free legal consultations for 12 months

Documents included in your Incorp pack:

• Certificate of incorporation
• 2 sealed/stamped copies of the company’s Memorandum of Association
• 2 sealed/stamped copies of the company’s Articles of Association
• Resolution appointing first director/s
• Resolution appointing first shareholder/s
• Up to 5 share certificates
• Resolution to open a bank account
• Resolution to rent an office
• Resolution/s to engage a Phone, Internet & Website service provider
• Resolution to hire a staff member/s
• Resolution to appoint a company lawyer
• Resolution to appoint a company accountant
• Resolution appointing you as the company’s authorised representative in commercial negotiations
• Resolution issuing a Power of Attorney in your favour
• Agreement authorising you to represent the company in commercial negotiations
• Power of attorney authorising you to sign documents on behalf of the company
• Register of directors
• Register of shareholders
• Expression of wishes (ie an “Offshore” Will)
• Lawyer authored User Guide (“How to Use Your Offshore Company”)

Price (all inclusive): $US 2,750

With tax effective offshore company management (ie including Professional Corporate “Nominee” Director, Shareholder & Company Secretary): $ 3,150

From 2^nd year: $1,850 (+ Nominees as/if required)

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

Centrally located at the Alpine crossroads of Western Europe, and renowned for its International Banking/Fund Management Industry, Switzerland, despite a relatively small population (circa 8 million) stands at or near the top of the peak in terms of Internationally focused Company Formation jurisdictions.

Boasting a stable, progressive economy Switzerland holds the 2nd highest rating in Europe (behind only Ireland) in the Index of Economic Freedom and the World Economic Forum’s Global Competitiveness Report currently ranks Switzerland’s economy as the second most competitive in the world.

With a pro-business regulatory environment, outstanding infrastructure and the ability to deliver one of the lowest Corporate Tax Rates in Europe (as little as 9%, potentially) it’s no surprise that many start-ups (especially since the beginning of the tech boom) have chosen to make Switzerland their Corporate Headquarters.

Swiss Company Features

Company Type: S.A. or S.A.R.L.

Time To form: Min 10 days

Paid up Capital: CHF (ie Swiss Francs) 50,000 for an S.A. and CHF 20,000 for an S.A.R.L.

Privacy: Switzerland offers a high level of confidentiality. For an S.A. the names of shareholders remain anonymous. S.A. Companies can have Bearer shares

Accounting: Swiss Companies must generate a set of accounts annually but there is no Audit requirement.

Taxation: Tax can be as little as 9% if the majority of turnover comes from outside Switzerland

Number of Directors: Minimum of 1 director is required (at least 1 director must be resident in Switzerland). Nominee Directors are permitted

Number of Shareholders: Minimum of 1 shareholder. Can be Corporate or natural person

Differences Between a Swiss S.A. and S.A.R.L. Company

Prices and Inclusions

Set up price for a Swiss company: $US5,500 (From 2^nd year $3,750)

Set up price inclusions:

• The Certificate of Incorporation issued by the local registrar.
• Company secretarial maintenance.
• The Memorandum and Articles of Association.
• Registered Office in Switzerland
• Registered Agent in Switzerland.
• Share certificate(s).
• Board resolution authorizing appointment of director and the issuance of of shares.
• Unlimited free consultations with our In-House Lawyer for 12 months

Renewal fee inclusions: 

• Registered office in Switzerland for one year
• Registered agent in Switzerland for one year
• Annual Governmental charges
• Managing all company compliance requirements.
• Unlimited free consultations with our In-House Lawyer for 12 months

Optional Services:

Swiss resident Nominee Director: $3,990

Power of attorney $165

Metal Company Seal: 165

Rubber Corporate Stamp: $75

Local telephone/fax number in Switzerland with answering service: $1,250

Notarisation and apostille of Corp docs: $165

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

As at the time of writing there are no laws or regulations in Switzerland aimed specifically at ICOs. Moreover, hitherto the Swiss Financial Services Regulator (“FINMA”) has been reluctant to share with service providers etc information about how they deal with inquiries regarding ICOs.

In February this year, however, FINMA published a practical guide in regards to ICOs in which it explains how it deals with such enquiries in this field and provides certain details on how FINMA applies Swiss financial market laws to ICOs.

Legal Classification of the Token to be issued

As outlined in the Practical Guide, FINMA discusses the treatment of three types of digital tokens which boast different functions, whilst at the same time acknowledging that mixed forms of Token are also possible (ie “hybrid” tokens).

Payment tokens (ie “pure” cryptocurrencies)

Payment Tokens (which are akin to pure cryptocurrencies) include Tokens which are accepted as a method of payment in particular for the purchase of goods or services. These tokens are invariably not linked to other functions or projects. “Cryptocurrencies give rise to no claims on their issuer“. These tokens are considered a digital means of payment or exchange.

Utility tokens

The second category of tokens, Utility Tokens, are tokens that provide access to a digital application or service by means of blockchain-based infrastructure. Such Tokens do not include any promise of performance or profit expectations.

Asset tokens

The third and final category of Tokens, Security Tokens, “represent assets such as participations in companies” and provide a right to income, dividends or interest. These Tokens in effect represent a claim against the issuer. “In terms of its economic function, the investment tokens are analogous to equities, bonds or derivatives“.

Anecdotally we have seen, that the delimitation set by FINMA between the different categories of tokens is not so obvious in practice. A Token will often have the characteristics of several kinds of Token (e.g. payment token and asset token or utility token and payment token).

Once the token has been classified, the Founders/Promoters of the ICO must determine which financial laws apply to his/her project and what license (if any) needs to be applied for authorizing the Token Issuing Company to issue and trade these tokens.

Determination of applicable laws

On this topic, the Practical Guide provides some guidance:

Payment tokens (“ie pure” cryptocurrencies)

FINMA is of the view that payment tokens do not represent securities, except in the case of a pre-sale of tokens. If however you intend to issue the Token in Switzerland such issuance must adhere to Swiss anti-money laundering (AML) requirements.

Utility tokens

Utility tokens are not considered to be securities provided (a) they only confer on the acquirer the right to access a digital service and (b) can already be used in this way at the time of issue.

Asset tokens

FINMA regards asset tokens as securities and has indicated that the legal and regulatory consequences of such a classification must be adhered to. (For example, if the token has the characteristics of a derivative, its sale may require a dealer’s authorization). Such a classification also invokes obligations under the Swiss Code of Obligations, eg the Promoter will need to have Lawyers draft a prospectus for the issuance of equities or bonds in the form of digital tokens.

Practical Tips

If you are considering launching your ICO from Switzerland, before you incorporate, it would be wise to send an enquiry to FINMA about the applicability of financial market regulation to your proposed ICO and the potential application of licensing requirements (including with your inquiry a White Paper containing all the required information per the Practical Guide).

Next up you’ll need to consider how to legally structure your ICO/Token issuing entity (e.g. via incorporation of a Company or Foundation, type of company, etc.) and how best to minimize taxes both in Switzeland and at home. For example, different tax rates may apply in Switzerland depending on which Swiss Canton you decide to call home.

Following receipt of FINMA’s response to your preliminary enquiry, you’ll need to prepare/draft:

(i)                the legal documentation necessary for the issuance of the tokens (ie including an application to FINMA for a license should same be required) and/or a prospectus

(ii)              the documents relating to the ICO itself, including the general terms and conditions governing the supply of the Token and the entitlements the Token offers.

In summary, to avoid regulatory challenges, would-be ICO Launchers are strongly advised to carry out a preliminary Swiss legal assessment as regards the token to be issued, and/or to submit an enquiry to FINMA about the applicability (or non-applicability) of Swiss financial market regulations/laws to ICOs and the likely applicability (or not) of licensing requirements.

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

At OCI we incorporate a LOT of ICOs/Token Offering Businesses every month.

By far the most common question we get asked is “Do I need to apply for a Special License For My ICO?”

In summary it comes down to this.:

(a)  If what you are offering is in effect a Security you will need to apply for a Special License in pretty much any jurisdiction you might be thinking of incorporating in.

(b)  If what you are offering would not be classified at law as a Security does the proposed jurisdiction classify a Utility token issuance as a Licensable Activity? If it does then, to incorporate in that particular country, you will need to also apply for the relevant license

Tokens

In an ICO the Issuing Entity (usually a Company) commonly issues a Token in return for a financial contribution by a third party.

Depending on their function, crypto tokens may be classified as Utility Tokens or Security tokens.

Security Tokens typically require Registration as a Security in the country of the offering entity before same can be offered for sale.

Utility tokens, (also known as user tokens or app coins), entitle future access to a company’s product or service. The defining characteristic of utility tokens is that they are not designed as investments; if properly structured, this feature can exempt utility tokens them from laws governing securities.

By creating utility tokens, a startup can sell “digital coupons” for the service it is developing, much as electronics retailers accept pre-orders for video games that might not be released for several months. (Filecoin, for instance, raised $257 million by selling tokens that will provide users with access to its decentralized cloud storage platform).

Utility tokens however present challengers to Regulators as regards their legal characterization. The nature of a utility token typically is to permit the holder to access a service provided by the issuer’s platform. This is commonly a pre-sale made by a start-up seeking capital to develop the promised service. While token-holder rights bear resemblances to, for example, licensees, franchisees, or club memberships, utility tokens may have other features that lend securities-like properties to them.

What is a Security?

Generally, the term “Security: is used to describe a financial instrument which contains a promise by the issuer, (which is usually a company), to pay the holder of the instrument a defined amount on or by a specified date (this date is when a debt security is said to “mature”), usually with interest.

In the United Kingdom, the term “security” applies only to equities, debentures, alternative debentures, government and public securities, warrants, certificates representing certain securities, units, stakeholder pension schemes, personal pension schemes, rights to or interests in investments, and anything that may be admitted to the Official List.

Some jurisdictions however have given the term Security a very broad definition For example in the USA a Security is defined as “ any note, stock, treasury stock, security future, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a “security,” or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing“

The scope of the term “security” has been more extensively explored in the U.S. The most well known case on this point is a decision of the U.S. Supreme Court in SEC v. W.J. Howey Co. (328 U.S. 293 1946) (‘Howey’s case). Howey’s case established that an “investment contract”, which is one type of security as defined by the Securities Act of 1933, means “a contract, transaction, or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party”

If the Token you are offering clearly operates like equity or debt (via payments, voting rights, etc), then almost certainly your Token would be classified as  Security.

Under Hong Kong Law the concept of what is a Security, is in general consistent with best international practices that prohibit accessing public capital unless registration or authorisation requirements are complied with or a relevant exemption applies. The Securities and Futures Ordinance (‘SFO’) s definition of “security” provides little assistance in relation to tokens that do not clearly fall into pre-established categories, such as shares or debentures. In Hong Kong an  entitlement to participate in a Collective Investment Scheme (“CIS”) ” can also be considered a Security That said the definition of “collective investment scheme” (‘CIS’), is widely drafted and remains open to interpretation in its application.

Summary

In short if a crypto token derives its value from an external, tradable asset, it would be classified as a security token.

Specifically if a Token promises the holder the right to share in the profits of and or management of the issuing Company, or a relative thereof, almost certainly such an offering would be considered a Security and would need to be registered as such in the proposed country of incorporation.

If, however, what you are offering is but a Utility Token then in 90% of tax free or law tax jurisdictions (eg Hong Kong, Seychelles, Belize, Nevis, Panama, Dominica etc) you should not need to apply for any form of Special License.

That said certain jurisdictions have decided to specifically make Utility Token Offering ICOs a licensable activity. These jurisdictions currently include Gibraltar and Malta. Hence if you intend to incorporate in one of these jurisdictions (even if what you are offering is not a Security) you will need to apply for an ICO License.

If you are about to launch an ICO and are in any doubt about your licensing obligations/requirements you should seek legal advice in the proposed country of incorporation, prior to launch.

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

On the 1^st June 2018 the European Securities and Markets Authority (ESMA) announced radical changes to the ability of EU Forex Traders to access leveraged trading. The new changes which came into effect on 30 July 2018 include a cap on the amount of leverage that can be offered to retail traders, negative balance protection and a 50% margin close-out rule.

If you are a European forex trader the net effect of these changes is that you now have a greatly reduced ability to make profit from forex trading.

But there is a solution.

The Solution is to set up an Offshore Company and have that Company open a Brokerage account a/with a non-European Broker. This will afford you access to the best possible trading terms, particularly in terms of leverage (and can potentially deliver a tax planning opportunity, see below)

To summarise how it would work is:

• You set up a zero tax International Business Company (“IBC”)
• The IBC opens an account with a non EU Broker
• You are appointed as the IBC’s authorised trader (ie you place the buy and sell orders on behalf of the company)
• Ideally the IBC should be seen to be managed/controlled/owned from Offshore (which can be achieved via the deployment of an Offshore based Nominee Director and Nominee Shareholder etc)
• For all intents and purposes the IBC’s trading profits are generated in a nil tax environment ie tax free/offshore (ie provided the IBC is structured/administered properly)
• When you need some living/spending money the IBC pays you a wage, or consulting fees or a commission (eg a percentage of trading profits generated)
• That living/spending money can be paid to your local bank account (which means it would be assessable income wherever you are ordinarily resident for tax purposes though you should also be able to claim a sizeable amount of allowable deductions eg for home office, car, equipment, insurances, travel, stationary etc etc to reduce the amount of your “taxable” income at home)
• If you don’t want the authorities to know how much money you are earning by way of wages you could also use an anonymous ATM or Debit/VISA card to withdraw your wages from an Auto Tele Machine (though technically, unless it’s a loan drawdown, such a receipt would be assessable income for tax purposes)
• The majority of trading profits could be reinvested Offshore potentially tax free.  This will enable you to build your Capital base much faster thanks to the power of compounding

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