Most clients these days want or need to be able to offer their clients/customers the ability to pay for products or services via Paypal.
We are often asked How can I open a Paypal account for my Offshore Company?
There in effect two ways to go about this, the direct route and the indirect route.
The Direct Approach
The first thing you’ll to do is make sure you choose a jurisdiction that has a Paypal Office; Paypal now has offices or presences in most nil tax (and low tax) Offshore Company jurisdictions including:
The Cook Islands
The Marshall Islands
For the full list check here: https://www.paypal.com/au/webapps/mpp/country-worldwide
Please note to get a Paypal account opened in the name of your tax free (or low tax) Offshore Company you will need to firstly open an account at a bank in the same country as wherein the Company is incorporated.
The Indirect Method
The indirect way to go about setting up a functional Paypal Account for your Offshore Company is to set up a 2nd Company (eg an “onshore” Company) to act as “Undisclosed Agent” for the Offshore Company.
In this scenario the Onshore Company acts as an Undisclosed Agent for the Offshore Principal Company; It collects the payments from customers, banks the payments eventually into its own Corporate Bank Account, keeps a percentage (eg 2.5-5%) and then sends the remainder of the monies to the tax-free Offshore Principal Company.
Jurisdictions which are popularly used to do this include the UK, Ireland and Australia.
The arrangement is facilitated by the English Common Law Doctrine of Principal and Agent. For details on how that aspect of the law weeks check next week’s feature article.
Would you like to know more? Then please Contact Us: