Online Gambling is an activity which lends itself well to an Offshore Corporate Structuring Strategy.
No matter what you bet on, an Offshore Corporate Structure can assist you potentially to defer paying the tax you might otherwise have to pay at home on betting profits (allowing you to grow your capital much faster in the meantime thanks to the power of compounding)
To summarize how it would work is:
- You set up a zero tax Offshore Company or an International Business Company (“IBC”)
- The IBC opens an account with a/the betting house
- You are appointed as the IBC’s authorised trader/better (ie you place the bets on behalf of the company)
- The Company would have an Offshore Management system (ie a nil tax jurisdiction based Nominee Director)
- Ideally the Company would also have an Offshore Ownership system (ie the Company would be owned by a Private Foundation)
- On the face of it the IBCs trading profits are being generated in a nil tax environment tax free/offshore (ie provided the IBC Is structured/administered in a certain way)
- When you need some living/spending money the IBC pays you a wage, or consulting fees or a commission (eg a percentage of betting 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)
- Larger amounts could be structured as part of a loan agreement between you and the Company (ie you would have the right, as you would with a line of credit or overdraft, to borrow money from the Company from time to time. (Generally speaking, such a receipt is a capital receipt not income and hence shouldn’t be caught by “income tax” rules)
- For larger purchases (eg if you want to by a house or an investment) such investment could be made directly by the Company or by an Offshore subsidiary Company
- A sizeable amount of the Company’s trading profits could be banked and or reinvested Offshore potentially tax free.
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DISCLAIMER: OCO Ltd are not Tax advisers or Legal Advisers. You should seek local tax, legal and financial advice before committing to set up an Offshore Corporate or Fiduciary Entity.