How To Make (Potentially Tax Free) Money from a Trading Bot Using an Offshore Company

If you’re in the business of designing and or deploying Trading Bots you’ll be pleased to know that such a field of endeavour lends itself well to an “Offshore” Corporate Structuring Plan.


Here’s how it typically works:


  1. You set up a tax free Offshore Company (“OC”)
  2. The tax free Company would own or have the License to commercially exploit the Bot
  3. The OC would enter into a contract with each client/investor whereby the OC agrees to allow the investor/client to trade using the Bot or to otherwise utilize the Bot
  4. The contract would provide for a payment/remuneration scheme whereby the tax free Offshore Company would be paid by the client/investor for supplying the Bot
  5. The payment could either be a one off fee or a periodic fee or a percentage of profits generated by the Bot
  6. The OC would be seen to be managed and controlled from Offshore (and ideally would seen to be beneficially owned by an entity offshore) ie from a tax free jurisdiction
  7. The source of the fees would be the contract
  8. The contract would be signed/closed Offshore by the Company ie in a nil tax environment


As such you can create a scenario whereby the income is generated, prima facie, in a nil tax environment.


Provided the Company is (a) seen to be managed and controlled from Offshore and (b) seen to be owned/beneficially owned by an Offshore/non-local resident there should be no tax payable in your home country on the Company’s earnings.


In short you should be able to achieve (a) by deploying a nil tax jurisdiction resident “Nominee” director & achieve (b) by setting up a Private Foundation to own/hold the shares of the Company.


A Bot is in effect a Piece of Intellectual Property (“IP”). Most clients in such a position would deploy a twin Company structure whereby the IP is held by one Company and the commercial rights are held under license by a 2nd Company (but more on that another 60 seconds..).


Local laws can have an impact. Hence you should seek local legal/tax/financial advice prior to setting up an Offshore Company for such purposes.


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


Comments are closed.