Paraplanners are Financial Services Professionals who take care of accounting, administrative and sometimes client-facing tasks for Financial Advisors & Financial Planners.
Paraplanners typically do much of the background “grunt” analytical work for Financial Advisers/Planners allowing the FAs/FPs to focus on client liaison.
Paraplanner’s duties will vary depending on their level of experience and the firm they work for. Experienced Paraplanners with good qualifications and training are likely to be completing the tasks of a Financial Planner. These tasks require a higher level of competence and responsibility and can range from taking notes in client meetings and updating client records to analysing financial statements and performing projections.
Instead of only doing back-office tasks and duties like junior Paraplanners, experienced Paraplanners will sometimes complete client facing tasks as well. This may include reviewing investment portfolios, building relationships with clients and organising planning meetings with clients.
It is becoming increasingly common in the Financial Services world to outsource Paraplanning work to contractors. If you are a Paraplanner working under contract (or looking to work under an outsourced contract basis) you’ll be pleased to hear that such a business lends itself well to an “Offshore” Corporate Structuring Plan.
No matter whether you a Civil Engineer, Software Developer, Accounting/Finance Professional or some other kind of skilled worker if you are able to work online or on the ground outside of your home country (or even if you are simply employed locally on a contract basis) the opportunity exists for you to potentially minimise your tax via “Offshore” Incorporation.
Contractors capable of receiving “orders” (ie work instructions) online and delivering services online would include:
- IT professionals
- Design professionals (eg Engineers, Architects, Draftsmen etc)
- Finance Professionals (including Paraplanners)
- Marketing Professionals
- Day Traders (eg when working as a contracted/authorised Trader for a Fund)
- Etc.
If you fit into one of the above categories here’s how an Offshore Corporate Structure could work for you:
- A nil tax Offshore Company (commonly an International Business Company “IBC”) is incorporated
- An Offshore account is set up for/in the name of the IBC in a nil tax banking centre
- Customers/clients (ie your Employer) contracts with and pays the IBC. The IBC is seen to invoice its clients from Offshore. Payment for invoices rendered are banked free of tax in the first instance.
- In the case of an online based business (ie where orders are received/fulfilled and or work is done Online) typically tax liability lies only in the country from which the Company is seen to be managed and controlled. Ideally your IBC would be seen to be managed & controlled from Offshore ie from a nil tax jurisdiction.
- To ensure that your IBC is seen to be managed and controlled from Offshore the Company would be structured with a (nil tax jurisdiction based) Nominee Director/Shareholder; Ideally (and especially if you live in a country which has CFC laws) the owner/beneficial owner of the Company would also be seen to be based Offshore (which may be achieved by deploying a Private Foundation to act as shareholder of your IBC)
- The IBC would invoice the Employer for the work that you do (this could be at an agreed hourly rate or daily rate or on a per job basis)
- The source of the income is the contract. Each work contract ideally would be signed Offshore by the Nominee Director. Hence, at law, the argument goes that all/any profits earned would have been generated (and banked) Offshore ie in a nil tax environment
- You or your local company would be sub-contracted by the IBC to actually perform the services for the IBC
- You would invoice the IBC periodically (eg monthly) for this work which income would be assessable income in your home country – though a smart Tax Accountant (given your tax status as a Contractor) should be able to assist you to claim/setoff a significant quantity of tax deductible expense against this income (eg home office costs, equipment costs, travel costs, educational costs,, out of home meal expenses, phone/internet/utilities etc) to significantly reduce the amount of tax that would otherwise be payable on this income. (assessable income less allowable deductions = taxable income)
- The rest of the income earned by the IBC would be banked (and potentially invested) offshore tax free. There are also strategies that could be deployed that may enable you to redirect substantial portions of these funds onshore tax free as capital (eg for investment purposes)
You could also potentially characterize your Paraplanning business a Recruitment Agency. Check the following Link which explains how that might work: https://offshoreincorporate.com/common-offshore-corporate-strategies/#9
Would you like to know more? Then please Contact Us:
info@offshorecompaniesinternational.com
DISCLAIMER: OCI is a Company/Trust/LLC/LP/Foundation Formation Agency. We are not tax advisers or legal advisers. You are advised to seek local legal/tax/financial advice in regards to your local reporting/tax requirements before committing to set up or use an Offshore Company or other entity.
