Company- Management | Offshore Companies International

Mauritius Tax Free Authorised Companies

Mauritius is a group of lush tropical islands in the south western Indian Ocean and is located northeast of Madagascar approximately 1,000 miles southwest of Seychelles. A former French and British colony, Mauritius offers:

A British system of law and parliament
Political/economic stability
A well-developed Financial Services Sector; and
A well-educated productive bi-lingual French/English speaking workforce

Since gaining independence from Britain in 1968 the Mauritian economy has grown steadily from one based in agriculture to a more diversified economy with Tourism, Financial Services and Agriculture (primarily sugar cane) as its 3 economic pillars. This has seen a resulting rise in standard of living from low to middle income delivering levels of economic and political stability which are the envy of the region.

Whilst better known as a Banking Centre (Mauritius boasts at least 3 world standard “Offshore” Banks) Mauritius offers two forms of nil tax Offshore Company ie the GBC1 ( a domestic designed to do business or hold shares in companies based in DTA Treaty partner countries) and the AC (Authorised Company).

Mauritius ACs ie Authorised Companies – General

An Authorised Company is governed by the Companies Act 2001 and The Financial Services Act 2007.

Permissible activities for an Authorised Company

This flexible business entity can carry out any lawful business activity except the following activities which are set out in the Fourth Schedule to the Financial Services Act 2007:

Banking
Financial services;
Carrying out the business of holding or managing or otherwise dealing with a collective investment fund or scheme as a professional functionary;
Providing of registered office facilities, nominee services, directorship services, secretarial services or other services for corporations;
Providing trusteeship services by way of business; and
Any other activities that the FSC may determine as being detrimental to the good repute of Mauritius as a centre for financial services or contrary to public interest.

Eligibility criteria to apply for Authorised Company status

An applicant for Authorised Company should meet the following conditions:

The majority of shares or voting rights or the legal or beneficial interest in the company, are held or controlled, as the case may be, by a person(s) who is/are not a citizen(s) of Mauritius;
The activity(ies) of the Company is/are being conducted principally outside Mauritius or with a category of persons as may be specified in FSC Rules; and
The company has its place of effective management outside Mauritius.

Authorised Company (Non-resident entity – Tax Exempted) – Key Features

General

Type of Entity: AC

Governed by: Companies Act 2001, Financial Services Act, 2007

Regulated Body: Registrar of Companies, Financial Services Commission

Type of Law: Hybrid

Shelf Company availability: No

Corporate Income tax: Non Resident for tax purposes

Double Taxation Treaty Access: No

Incorporation Time: One week

Share Capital or Equivalent

Standard Currency: USD

Permitted Currencies: Any except Mauritian Rupees

Minimum Paid Up Capital: 1 share

Bearer Shares allowed: No

No par value shares allowed: Yes

Directors

Minimum number: 1 (one)

Local required: No

Publicly accessible records: No

Location of meetings: Outside of Mauritius

Corporate directors Allowed: Yes

Shareholders

Minimum number: 1 (one)

Local required: No

Publicly accessible records: No

Location of meetings: Outside of Mauritius

Corporate Shares Allowed: Yes

Accounts & Taxation

Requirement to prepare & file Financial Summary with FSC: Yes

Audit requirements: No

Requirement to prepare/file Annual Tax Return with the Mauritius Revenue Authority: Yes

Publicly accessible accounts No

Other

Re-domiciliation permitted: Yes

Company secretary required: Optional

OCI Mauritius AC Company Packages

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 Mauritius AC 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 2,100

With tax effective offshore company management (ie including Professional Corporate “Nominee” Director, Shareholder & Company Secretary): $ 2,500

From 2^nd year $1,990 (+ Nominees as/if needed).

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

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

How To Use a Tax Free Offshore Company To Invest in Alternative Investments

The advent of the global village has broadened the scope of potential investment activities considerably.

These days it’s not uncommon for an investment portfolio to include exposure to left of field “alternative” investments.

Investments that come under this category include long hold capital focused assets such as venture capital, private equity, hedge funds, real estate investment trusts, commodities, precious metals, rare coins, fine wine/whisky, artworks, antique furniture, aged/quality name brand musical instruments (eg guitars, violins etc), vintage cars and etc. (Prime/unique real estate could also form part of such a portfolio)

Investing in alternative investments is an activity that lends itself well to an Offshore Corporate Structuring plan.

How it works is:

(a) You incorporate a tax-free Offshore Company (“OC”)

(b) You structure the Company in such a way as to ensure that the Company is seen to be managed and controlled from Offshore; This can/will be achieved by via deployment of a tax haven based Nominee Director (which is a service that OCI can/will provide).

(d) You advance funds to your OC

(e) The OC then purchases the investment. Any purchase contract is concluded/signed “Offshore” by the Nominee director

(f) The asset is held by your OC for some time, commonly for the long haul. Eventually one day you may decide to sell the investment having (hopefully) made a substantial capital gain. Sale proceeds are paid into your OC’s tax free bank account

(g) Capital Gains tax is typically paid by the/an investor to the taxman of the country wherein the investor is domiciled. If you are smart you will have set up/domiciled your Offshore Company in a jurisdiction that does not levy Capital Gains Tax

(h) Provided (a) your OC is seen to be managed and controlled from offshore (which can be achieved via deployment of a nil tax jurisdiction based “Nominee” director) & provided (b) you are not, at law, the beneficial owner of the Company (which can be achieved by setting up a Private Foundation to own/hold the shares of your OC) returns paid to your OC can be banked and/or reinvested Offshore potentially free from tax (ie without you needing to declare/pay tax on this income at home)

Note if you need to draw on these returns at home there are at least 6 different ways to (discreetly) access money banked abroad by your Offshore Company.

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

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

How To Avoid Being Listed as the Beneficial Owner of an Offshore Company

We are often asked Can you set up an Offshore Company for me without my name being listed in any official record as beneficial owner of the Company?

The short answer is this is possible. And the solution is somewhat left field. Let us explain…

Typically, clients who are privacy focused like to deploy a Nominee Director and Nominee Shareholder. But the downside of that is, even if you have a nominee shareholder in place, you would still be classified at law as the underlying beneficial owner (“UBO”) of the Company. The solution is to set up a Private Foundation to act as the shareholder of your tax free Offshore Company.

Why?

The Private Foundation is basically Europe’s version of a Trust (Foundations began in Liechtenstein around about the 1600s) save for one big difference (see below). A Trust is more like a contract between 2 parties ie the person who set up the Trust, called the Settlor, and the person set up to manage it, ie the Trustee (The Trustee manages Trust property for the benefit of the Trust’s beneficiaries). A Trust is NOT a separate legal entity. For example if a Trust buys a piece of real estate on the Title Deed the name of the proprietor says XYZ Trustees Ltd as Trustee for the ABC Family Trust. In other words the legal owner of the property is the Trustee. But the beneficial owner/s of the property is/are the beneficiary/s of the Trust.

A Foundation is similar to a Trust ie it’s a 3 headed creature – its set up by a person called a Founder (like a Settlor in the case of a Trust), is managed day to by a person called a Councillor (which is more like a Company Director than a Trustee) and, like a Trust, it has beneficiaries ie persons who are ultimately designed to benefit from the existence of the Foundation.

BUT, and here’s the key….

A Foundation (unlike a trust) is a separate legal entity ie it can sue and be sued. AND, at law, a Foundation is presumed to be both the legal AND beneficial owner of any asset it holds!

One jurisdiction has even taken this a step further ie Seychelles which has actually codified this aspect of European Common Law ie written it into legislation – in Section 71 of the Seychelles Foundations Act (refer pages 48 + 49 of the Act which can be downloaded via this link: https://seylii.org/sc/legislation/act/32-2) it actually says that the legal and beneficial owner of any asset held by a Seychelles Foundation IS THE FOUNDATION ITSELF.

The end result?

If you set up a Seychelles Foundation to own the shares of your Offshore Company or IBC if anyone (eg a bank or revenue authority or regulator) ever asks who is the beneficial owner of this Company, you can legally say it’s the shareholder, because the shareholder is a Seychelles Foundation and Section 71 of the Seychelles Foundations Act which you’ll find enclosed (ie DO email them a copy of the legislation) provides that the legal and beneficial owner of any asset held by a Seychelles Foundation IS THE FOUNDATION ITSELF.

If you wanted to be extra careful/private you could utilize the Discretionary nature of a Foundation (ie beneficiaries can be changed at any time) to make the initial beneficiary of the Foundation a tax free International Charity (eg UNICEF, The International red Cross, Oxfam or?) or you could install a (nil tax jurisdiction resident) “nominee” beneficiary to act as the initial beneficiary (which is a service that some Corporate Service Providers, including OCI, can provide).

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

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

IBCs – How To Get Around New EU Economic Substance Requirement

Following on from the OECD’s BEPS Action plan, in July 2018 the EU’s Code of Conduct Group (Business Taxation) decided that certain Companies/Legal Entities registered in tax havens would, moving forward, be required to show local substance. In short, the tax havens in question (eg the BVI, Cayman Islands, Bermuda, Guernsey, Jersey, the Isle of Man, Bermuda, Vanuatu etc) were threatened with blacklisting by the EU if they failed to pass laws forcing their International Business Companies etc to show economic substance on the ground in the jurisdiction (eg a local/stand-alone office and local staff).

The jurisdictions affected moved promptly to pass laws requiring such Companies to show substance, in particular with respect to the following business types:

Banking
Insurance
Shipping
Regulated fund management
Finance/leasing
Distribution and service centre
Headquarters
Intellectual property
Holding company activities

The argument for requiring businesses such as banking and insurance etc to have a local presence is hard to counter but of far greater concern is the requirement for Holding Companies to show presence on the ground. Given its passive nature, if a Company is just to set up to hold a parcel of shares for example why would it need to have a stand alone office (or staff for that matter)? It is self evidently an absurd requirement.

The good news is that for Holding Companies at least the requirement is easy to get around.

How so?

Across the board per the model legislation (eg in the BVI) to fit the definition of a Holding Company the Company in question must just hold shares. If it holds any other asset it doesn’t meet the definition of a “Holding” Company.

Any other asset could (would) include a bank account.

So, if you have a Holding Company in any of the effected jurisdictions – and you want to get around this ridiculous new EU requirement – (if you haven’t done so yet) we’d suggest you take steps NOW to open a bank account for your Company!

And if your current Offshore Company Service Provider (“CSP”) doesn’t believe you when you tell him/her that you shouldn’t be required to set up an office or hire staff refer him/her to this article and tell him/her to read the fine print of the legislation! (and or sack your CSP and change to a Provider who actually knows the fine print eg OCI).

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

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

Where To Incorporate a Crypto Business With No License?

We are often asked, Where can I set up a Crypto business (eg a Crypto currency Exchange) without a license?

As at the date of writing (ie 24 November 2019), the following nil tax jurisdictions do not license such activities currently:

Seychelles
Belize
Nevis
Panama
Hong Kong
Cayman Islands
Dominica
Hong Kong

To clarify the position last week we wrote to Lawyers we know in 11 different jurisdictions and asked this question: “We have a Japan based client who wants to incorporate a new business namely a Cryptocurrency Exchange business where they buy Cryptocurrencies and sell Cryptocurrency (ie they will exchange one form of Cryptocurrency for another and charge a commission or margin. What special license/s if any will the client need to apply for in your jurisdiction?”

Here are the answers we received, verbatim:

Estonia

“First, regarding your question: we recommend to order a service for preliminary legal analysis for specific cases for full assurance but from the first view I would say that the company would also need a Crypto license.

The crypto licenses for which we can apply are:

· providers of a service of exchanging a virtual currency against a fiat currency
· providers of a virtual currency wallet service”

Hong Kong

“Cryptocurrency exchange is not yet officially regulated in Hong Kong but presumably they will need to have their own operating office, staff, compliance officer and follow the Anti-Money Laundering rules as a minimum. However, they are not likely to open an account in HK for its operation.

Alternatively, the client can consider setting up a company in Malaysia Labuan where they can apply for a money operator license that include Crypto currency in the license like fiat currency.”

Seychelles

“Agreed that it is not a prohibited business and will thus depend on DD issues.”

Panama

“Presently there are no regulations or licenses in Panama for Crypto business.”

UAE

“In UAE all financial and non financial licenses are regulated in DFIC , FSA and ADGM authorities.

Currently we are working on details clarification with the authorities and we will revert you ASAP. “

Dominica

“Cryptocurrency exchange is not regulated by the IBC Act 1996 of Dominica, and as amended thereafter. It remains a grey area, just as in the majority of jurisdictions. Thus we confirm that this type of activity for an IBC is not restricted. Legal opinion can be available upon request.”

Nevis

“At this time we do not have any cryptocurrency legislation.

I suppose the better option is number 1. The entity can be formed and the Articles allows the company to do any legal business. To ensure nil tax in Nevis, it would be better not to operate the business activities in Nevis, in addition to the fact that cryptocurrency activities are not regulated in Nevis (it would be hard to make a claim if monies are lost).”

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

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

Cayman Islands Fund Options

During the course of the past 20 to 30 years the Cayman Islands, an independent former British Protectorate in the norther Caribbean Sea, has risen to become one of the World’s Premier Fund set up destinations.

Whether you’re looking to set up a Hedge Fund, a non-regulated Closed End Fund or a High End Mutual Fund Caymans provides options.

Fund setups are governed in the Caymans Islands by the Caymans Mutual Funds Law

The said legislation defines a mutual fund as being any company, trust or partnership either incorporated or established in the Cayman Islands, or if outside the Cayman Islands, managed from inside the Cayman Islands, which issues equity interest redeemable or re-purchaseable at the option of the investor, the purpose of which is the pooling of investors’ funds with the aim of spreading investment risk and enabling investors to receive profits or gains from investments.

Regulation of Funds & Fund Administrators

The Caymans Mutual Funds law makes the Cayman Islands Monetary Authority (“CIMA”) responsibility for regulating certain categories of funds operating in and from the Cayman Islands (see Categories of Regulated Mutual Funds below) as well as Fund administrators.

Interestingly not all mutual funds fall within the Regulatory ambit. Certain categories of mutual fund ie Funds that meet the criteria set out in section 4(4) of the MFL are exempt from Licensing/Regulation. All other mutual funds are regulated and must be licensed.

The licensing requirement is coved in section 4 of the act which states as follows:

“4. (1) Unless a mutual fund is complying with subsection (3) or is exempted under subsection (4), it shall not carry on or attempt to carry on business in or from the Islands unless —

(a) it is the holder of a Mutual Fund Licence, and it has —

(i) a registered office in the Islands; or

(ii) if a unit trust, a trust company licensed under the Banks and Trust Companies Law as its trustee; or

(b) a licensed mutual fund administrator is providing its principal office in the Islands, and, unless an exemption from this requirement has been granted by the Authority, there is filed with the Authority, in respect of the mutual fund, a current offering document that complies with subsection (6).”

Categories of Regulated Mutual Funds

The following categories of funds must apply for a License in the Cayman Islands:

A Licensed Mutual Fund

The MFL (Section 4(1)) specifies that a mutual fund operating in and from the Cayman Islands must have a licence unless: a licensed mutual fund administrator is providing its principal office; it meets the criteria set out in Section 4(3), which allows for funds to be registered, or it is exempt from regulation under Section 4(4).

The provisions relating to licensed mutual funds benefit large, well known and reputable institutions, which do not propose to appoint Cayman Islands service providers.

Administered Mutual Fund

To be approved as an administered mutual fund, the fund must have a CIMA-licensed mutual fund administrator providing its principal office. The regulatory responsibility for the administered fund, which has more than 15 investors and which is not a licensed or registered mutual fund, is placed largely in the hands of a licensed Mutual Fund Administrator.

Registered Mutual Fund

A Registered Fund must have either a minimum aggregate equity interest of CI$80,000 (US$100,000) purchasable by a prospective investor or the equity interests must be listed on a stock exchange approved by CIMA.

A Master Fund must have either a minimum aggregate equity interest of CI$80,000 (US$100,000) purchasable by a prospective investor in the master fund or the equity interests of the master fund must be listed on a stock exchange approved by CIMA.

Common Fund Vehicles

The Cayman Islands has company, trust, partnership and related laws that allow a high degree of flexibility for establishing mutual funds. The four vehicles commonly used for operating mutual funds are the exempted company, the segregated portfolio company, the unit trust and the exempted limited partnership.

Exempted Company - The exempted company may redeem or purchase its own shares and may therefore operate as an open-ended corporate fund. Closed-ended corporate funds can also be established using the exempted company and it is a relatively straightforward procedure to convert from one to the other.

Segregated Portfolio Company - An exempted company can also be established as a “Segregated Portfolio Company” (“SPC”) with protected cells or portfolios. The SPC makes it possible to provide a means for different groups to protect their assets when carrying on business through a single legal entity.

Unit Trust - The unit trust is usually established under a trust deed with the investors’ interest held as trust units.

Exempted Limited Partnership - The exempted and limited partnership provides a second unincorporated vehicle and it can be formed as easily as the exempted company or the unit trust.

Closed End Fund Exemption

Section 4(4) of the Caymans Mutual Funds Law specifically provides that:

“A mutual fund may carry on or attempt to carry on business in or from the Islands without complying with subsection (1) if —

(a) the equity interests are held by not more than fifteen investors, a majority of whom are capable of appointing or removing the operator of the fund; or
(b) it is a fund, not incorporated or established in the Islands, which makes an invitation to the public in the Islands to subscribe for its equity interests by or through a person who is the holder of a licence under the Securities Investment Business Law (2019 Revision), for a regulated activity specified by the Authority for the purposes of this subsection and —
(i) those interests are listed on a stock exchange (including an over the-counter-market) specified by the Authority by notice in the Gazette; or
(ii) the fund is regulated in a category, and by an overseas regulatory authority, approved by the Authority for the purposes of this subsection.
The ongoing supervision of funds and fund administrators falls under the remit of CIMA’s Investments and Securities Division.

Closed-End/Exempted Funds

A Closed End Fund is an investment fund wherein the investor commits to invest his or her money for a set period of time; The investor cannot redeem his /her shares (ie the investor can’t cash out) until the minimum/fixed investment period has expired.

In the case of a Closed End Fund typically a Limited Company is set up (ie a Company Limited by shares); the investor receives shares entitling him/her to take home a percentage of the profits (ie in proportion to the percentage of the company that the investor owns) based on net asset value at the conclusion of the fixed investment period.

A closed-ended fund is most appropriate for investments which typically require a longer period to mature, eg private equity, venture capital, real estate or infrastructure investments.

Exempted funds are mutual funds that are not required to be regulated by CIMA ie where there are no more than 15 investors, the majority of whom are capable of appointing and removing the directors of the fund. (Provided the fund meets the criteria) Closed-ended funds incorporated in the Cayman Islands are not regulated and are not required to obtain a Fund License in the Cayman Islands.

Closed End Fund Companies are often established via a tailored Articles of Association/Constitution which allows the Company to issue 2 different classes of shares ie Class A shares and Class B shares. Class A shares (often called Management Shares) come with both voting rights and the rights to share in profits. Class B shares (often called Equity

Shares or Investor Shares) ony entitle the shareholder to a share in the profits ie they do NOT come with voting rights.

This model of Closed End Fund is most commonly Incorporated in Seychelles or Belize or Nevis because such funds, if incorporated in these jurisdictions, do not fall within the regulatory ambit of the local Mutual Funds Law.

Why Set Up Your Fund In The Cayman Islands?

The Cayman Islands is presently the dominant “Offshore” Fund Jurisdiction. It, reportedly, is home to 75%+ of all new offshore fund formations including nearly half of the World Mutual Funds Industry’s estimated US$1.1 trillion of assets under management.

Why do so many funds choose to call Cayman Islands home? Because the Caymans offers:

Political and economic stability
No exchange control restrictions
Reputable quality professional service providers
A huge amount of expertise in the investment fund space
World class banks
Flexible, modern, quality legislation
Commerciality – Cayman regulators are very approachable, flexible, innovative and efficient
Affordability – Cayman’s investment fund fee structure is globally competitive, which benefits the manager and the investor with respect to the launch and ongoing operation/ maintenance of the fund.
Reputability – The Caymans is on the OECD “White List” and has signed tax information exchange agreements (TIEA) with 19 countries
Tax effective outcomes for both Funds and Fund Managers

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

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

How To Use a Tax Free Offshore Company to Invest in a Forex Trading Venture

Investing in a Forex Trading JV is an activity that lends itself well to an “Offshore” Corporate Structuring Plan.

Usually the deal provides that the investor contributes capital and the Forex Trader provides the knowhow, (ie does all the Trading) and profits are split between the Trader and the Investor (ie you) eg 50/50 or 60/40 or 70/30 ie whatever you manage to negotiate.

How it works is:

(a) You incorporate a tax free Offshore Company (“OC”)

(c) Your OC signs a general investment agreement/contract with the Forex Trading Company. This agreement sets out what each party will do and how profits will be shared (and when)

(d) You advance funds to your OC

(e) The OC then advances funds to the Forex Trading Company

(f) The Forex Trading Company invests/trades your money

(g) The Forex Trading Company pays a return periodically to your OC (eg monthly or quarterly or 6 monthly or yearly).

(h) Returns paid to your OC will be banked and or reinvested Offshore potentially free from tax

(i) To minimize the chances of local Controlled Foreign Company laws being applied to your Offshore Company (and or if your local tax man has the power/wherewithall to tax an Offshore Company if you are the “beneficial owner” thereof), ideally, you would not want to be seen to be the beneficial owner of the Company. This can be achieved by deploying a Private Foundation to act as the shareholder of your nil tax Offshore Company.

Note if you need to draw on or utilize these returns at home there are several ways to discreetly go about this (including options potentially with zero tax implications).

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

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

How To Set up a Staff Recruitment Business Tax Free Offshore

With the rise of the digital/global economy – and the greater job choices now on offer as a result of that rise – many businesses are finding it increasingly difficult to find and retain good staff, particularly in specialist or highly skilled fields. Consequently, more and more savvy business owners (in particular internationally focused enterprises) are turning to Specialist Staff Recruitment Agents to help locate & hire key staff.

Such a business model, particularly in the International field, lends itself well to an Offshore Corporate Structuring Plan. Often you’ll see a specialist Staff Recruitment Agency engaged where you have a business located in Company A which needs high skill, or unusual, work done in Country B by a person whose skills transcend and are recognized in (or transferable across) multiple jurisdictions (eg Engineers, CFOs, Lawyers, Geologists, etc) ie the target staff member could potentially come from any country.

Typically, such businesses operate Online. That is The Staff Recruitment Agent has a website, prospective clients and suppliers find the Agent online and contact/communicate with the Agent via email or via the website.

Usually, the Agent is paid a sign on fee once the employee is hired + a percentage of the employee’s earnings during the lifetime of the contract.

To summarize how such a business usually works from “Offshore” is:

You (ie The Recruitment Agent) set up a zero tax Offshore Company eg an International Business Company (“IBC”) with a nil tax jurisdiction based “Nominee” Director
Ideally your website will be hosted in a nil tax jurisdiction
You are appointed as the IBC’s Authorised Representative/CEO/GM (ie as a senior staff member)
On behalf of the IBC you negotiate terms with each client to pay your IBC a lump sum fee and or a Commission or Commissions if/when the Client/Employer and Employee sign a contract
The Agency agreement/contract is signed Offshore by the Nominee Director (ie the “situs” of the contract is a nil tax jurisdiction)
The source of the income is the contract
Because the contract was signed offshore, ie in a nil tax environment, there should be no tax payable on income generated by the contract (a) where the Company is incorporated and (b) where you live (assuming you structure and administer the Company in a certain way).
When you need some living/spending money the IBC pays you a wage, or consulting fees or a commission (eg a percentage of sales made)
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 potentially 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
To minimize the chances of local Controlled Foreign Company laws being applied to your Offshore Company, ideally, you would not want to be seen to be the beneficial owner of the Company. This can be achieved by deploying a Private Foundation to act as the shareholder of your nil tax Offshore Company.

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

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

IBCs – Why Have a Shareholders Agreement?

A Shareholders Agreement is a contract between some or all of the shareholders of a Company in which they agree to regulate the exercise of some of their rights as shareholders.

A Shareholders’ Agreement is a supplement to a/the Company’s Constitution/Articles of Association and will generally regulate shareholders’ rights and regulate the management/operations policy of the Company.

Potential Problems In The Absence Of A Shareholders Agreement:

1) The rights of minority shareholders are typically limited under a/the Company’s Constitution/Articles of Association. Minority shareholders must rely on the Courts for assistance if they have a complaint about the way in which a company is conducted. The Courts only provide help in limited circumstances (and usually at a sizeable cost).

2) What happens if a shareholder wishes to sell his or her shares upon -

• Retirement?

• Disability?

• Death?

• Or for any other reason?

Company Constitutions/Articles of Association are usually silent on detail with respect to these issues.

Unless these events are adequately covered in a Shareholders’ Agreement, the only potential purchasers are the other shareholders; If they don’t want the shares, (or aren’t prepared to pay full value for them) then the shares remain unsold or are sold at far less than their true value.

Death of a shareholder can result in the shares being worthless to the deceased’s estate because there is no purchaser. On the other hand, the beneficiaries who inherit the shares (eg the deceased’s spouse) may wish to become actively involved in the company against the wishes of the other shareholders.

Benefits of a Shareholders Agreement

Shareholders agreements can bind the shareholders to protect share value and control who becomes a future shareholder, for example:

• Buy sell agreements: An agreement can provide that upon a shareholder wishing to sell out, existing shareholders have an option or first right to buy shares at a re-determined price or formula. If the existing shareholders don’t wish to purchase the shares, the agreement can set minimum requirements for an incoming buyer, for example that the party is acceptable to the remaining shareholders.

• Compulsory buy agreements: An agreement can provide that upon a shareholder retiring, being disabled and/or dying the remaining shareholders must compulsorily buy the shares. Funding such buy outs can be planned and a savings plan or borrowings put into place, whilst in the event of death and disability, the buy outs can usually be funded through the provision of appropriate insurances.

• Compulsory sell agreements: An agreement can provide that upon a shareholder breaching the shareholders agreement, becoming insolvent or on the happening of other specified events, the non-defaulting shareholder/s can elect to compulsorily acquire shares from the defaulting shareholder and eject that shareholder. The agreement can predetermine the price or formula for determination of the sale price. The price payable in the event of breach of the agreement may be less than that payable in other circumstances and generally discounted from the market value.

Matters Not Regulated By The Company Constitution/Articles of Association

A Shareholder’s Agreement can include provisions regulating -

• Shareholder exit strategies

• Shareholder warranties

• Confidentiality agreements

• Restraint of trade for directors and/or shareholders

• Agreement specifying or limiting business activities of the company

• A shareholder’s right to appoint directors and the number of directors

• Director’s meeting procedures

• Minimum budgeting, business plan, accounting and management reporting requirements of directors and management

• Agreement concerning financing policy

• Dividend distribution policy

• Personal rights/obligations of shareholders

• Documentation of shareholders’/directors’ loans and the right to payment of interest

• Policies, management and procedures

• Protection of minority shareholder interests.

A Shareholders Areement should cover all aspects of the relationship and the mechanics by which the company is to be operated. The agreement should also protect the respective interests of the parties to the agreement and outline dispute resolution.

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Forex Traders – How To Set Up a Copy Trade Business Offshore Tax Free

With the rise in the volume of day traders entering the Forex market over the course of the past 10-20 years, it comes as no surprise to see a recent spike in the volume of Entrepreneurial Traders realizing that there is money to be made by allowing others to copy their trades and charging for the provision of such information.

Such an arrangement enables an experienced Forex Trader to allow novice traders/investors to “piggy” back on the frame of the experienced Trader (ie copy the trades of the experienced Trader) without the Trader having to endure the red tape, hassle, cost or legal risk that would likely otherwise come into play were the Trader to trade the Novice’s money directly.

If you are an experienced/successful Forex Trader, chances are you will have had (or will soon have!) friends or family or acquaintances come at you asking you to invest (ie Trade) their money.

Generally speaking, if you take people’s money and invest it (or if you offer financial/investment advice) such endeavours would require one to apply either for a Mutual Fund License or a Broker’s License or a Financial Adviser’s License.

If, however, all you are offering is a Copy Trade Facility/Service it may be possible to incorporate such a business in a low regulation/low tax jurisdiction without needing to apply for any form of Special License. This could potentially be achieved by characterizing your business/offering in a certain way eg:

You could take in investors via the set-up of a Private (non-licensed) Closed End Fund. Click on the following link to read details of how this might be achieved: https://www.dropbox.com/s/vy9xgzj3gtu9dq1/Structuring%20Options%20for%20a%20Non%20Licensed%20Closed%20End%20Fund.doc?dl=0 ;or
You could utilise a tax-free International Business Company (“IBC”) eg a Seychelles or Belize or Nevis or Samoa IBC – which could be contracted to trade an investor’s money in a/the broker’s account under Power of Attorney. Click on the following link to read details of how that can work: https://www.dropbox.com/s/h74029saaaa3mmm/How%20To%20Trade%203rd%20Party%20Funds%20Using%20a%20PoA.docx?dl=0 ;or
Your IBC could enter into a service contract or consultancy contract or an information supply agreement with the “investor” whereby, in consideration of you supplying details of your trades or some other person’s trades as/when placed (or if you supply an introduction to some other service provider who provides the trade data), the investor agrees to pay you a fee (which could potentially be a percentage of the investor’s profits made from such trades). Such an agreement, if drafted very carefully by an appropriately experienced/knowledgeable Lawyer, could get you around the need to apply for a Special License.

Moreover, provided the Company is seen to be managed and controlled from Offshore and, (eg if you live a country that has CFC laws), is seen to be beneficially owned from Offshore, the profits from such a venture could be banked Offshore potentially tax free.

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

www.offshoreincorporate.com

info@offshorecompaniesinternational.com