How to Bring Offshore Money Onshore

 

Often I’m asked how can I access money earned by my Tax Free Offshore Company?

 

There’s 3 ways to bring home money from a nil tax Offshore/International Business Company:

 

1. Set yourself up as an arms’ length consultant and have the IBC pay you consulting fees periodically. This means you would only have to pay tax on what you bring into your home country (and even then you should be able to minimise tax payable on that as a lot of what otherwise-might-be personal expenses could be written off as business costs, eg home office, utilities, car, phone, electrical/office equipment, stationery, computers travel etc etc etc). The rest of the IBC’s income can remain offshore and be (re)invested offshore in tax friendly investments. Say your target capital base is 3 million Euro and every year you can leave at least half the IBC’s income offshore. Because you’re not paying tax yearly on all the IBCs income instead of taking 20 years to accumulate 3 million Euro with the power of compounding you could be able to accumulate 3 million within 5 to 7 years. This is what many clients do ie they pay a little bit of tax at home each year on their overseas earnings but most of their income is kept offshore and reinvested offshore.

 

2. Bring back the money as a loan. Yes this can be done but great attention to detail will be required particularly with respect to lending parties, loan terms and documentation. The loan would need to be seen arms length ie seen to be on commercial terms.

 

3. Use an anonymous debit card and withdraw cash from automated teller machines. This can still work in some places though it should that some of the bigger countries now have the ability to trace and connect one to such withdrawals

 

Note unless you live in a country that does not have CFC laws (and/or unless or are structured in a tax effective/compliant manner) you may still be required to declare and pay tax at home on your IBC’s earnings. Local law can impact on such plans and hence you should seek legal/tax advice before committing to travel down such a path.

 

 

 

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