How To Use an Offshore Company to Broker Commodities


Commodity Brokering is an activity which lends itself well to Offshore Corporate Structuring.


A Commodity broker is a person or firm who endeavours to connect commodity suppliers or manufacturers with would be purchasers (and/or vice versa).


When such a transaction is successfully completed (ie when the purchaser receives delivery of the commodity) the Broker (ie the middle man) charges a fee which is usually a percentage of the contract price.


If you are a Commodity Broker looking to move Offshore here’s how it would work for you: 


  • You set up a zero tax International Business Company (“IBC”)
  • The IBC enters into a procurement contract with the supplier (or purchaser as the case may be)
  • You are appointed as the IBC’s authorised representative (ie you are authorised on behalf of the IBC to source suppliers and or purchasers and negotiate commission rates etc. )
  • The source of the IBC’s income is/would be the procurement contract which would be signed Offshore + the situs of the Contract would be expressed in the agreement as being “Offshore” (ie the nil, tax jurisdiction where your IBC is incorporated).
  • Thus from an International Taxation Perspective the IBCs trading profits are generated in a nil tax environment tax free/offshore (ie provided the IBC is structured properly)
  • When you need some living/spending money the IBC pays you a wage, or consulting fees or a commission (eg a percentage of profits generated)
  • That living/spending money can be paid to your local bank account (which means it would be assessable income wherever you are ordinarily resident for tax purposes though you should also be able to claim a sizeable amount of allowable deductions eg for home office, car, equipment, insurances, travel, stationary etc etc to reduce the amount of your “taxable” income at home)
  • If you don’t want the authorities to know how much money you are earning by way of wages you could use an anonymous ATM or Debit/VISA card to withdraw your wages from an Auto Tele Machine
  • The majority of trading profits could be reinvested Offshore potentially tax free.



As always local laws can have an impact, so be sure to seek local legal/tax/financial advice before committing to set up an Offshore Company for such purposes.


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