There are in essence 2 categories of client that we typically assist to Incorporate Offshore:
- Clients who buy and or sell outside their country of residence
- Enterprises where goods and or services are sold online (eg an Ecommerce store) or income is otherwise generated online (ie Online Trading, eg Cryptocurrency Trading, Online Forex/Shares/Futures/Commodities/Metals/Options etc Trading)
If you don’t fall into these categories an option for you might be to set up a tax-free Offshore Service Company.
There are 2 possibilities here:
(a) If your business can justify why the business would want to outsource the provision of products or services to an overseas supplier; and/or
(b) If your business is heavily dependent on deployment of Intellectual Property which might include Trademarks, IT/software or Operating systems (eg a Franchise model). In this case you could set up a nil tax Offshore Company to own the IP/business operating systems.
In either case how it could/would work is:
- You set up a tax-free Offshore company (“IBC”)
- You have the IBC (i) enter in to an agreement/contract with your local Company/Business to supply services in return for payment or (ii) have the IBC enter into a Licensing agreement whereby the IBC agrees to supply certain IP in return for regular fees (ie licensing fees or royalty payments)
- Once the contract is signed the local Company/business sends money to the IBC regularly (these payments should be tax deductible to the local Company/business)
- These payments are banked by the IBC potentially tax free
Of course, ideally – where a service contract is signed – you’ll want to be able to show that the Offshore Company has actually delivered some services. Particularly where such services are capable of being delivered online, this shouldn’t be hard to do.
To maximize the chances of this working and surviving the blow torch if applied:
(a) The tax-free Offshore Company should be seen to be managed and controlled from Offshore; and
(b) You can’t afford to be classified at law as the owner, or beneficial owner, of the tax-free Offshore Company.
You should be able to adequately deal with (a) by deploying a (nil tax resident) “Nominee” Director as part of the Corporate structure; &
To cater for (b) you’ll want/need to set up a Private Foundation to hold the shares of the Offshore Company.
Would you like to know more? Then please Contact Us: