Is Offshoring Viable?

Hi all,

This forum seems great for people able to think outside the box and find grey areas and loopholes which is unfortunately what the world seems to be moving towards with more and more government intrusion.

My goals are:
1/ "Internationalize my assets" so if one government goes a bit crazy and decides to raid bank accounts/devalue the currency/send taxes to astronomical levels I have assets outside their power of control.
2/ Reduce taxes

I am English and live in the UK. Fortunately our government isnt quite as draconian as the US gov (but its getting there) with the government requiring you to pay taxes to the US no matter where you live or earn your money. We only pay taxes in the country we live in.
So registering your business in an international/low tax location seems a great idea... however. They are too smart for that. I have spoken to my accountant who says you can't register a business offshore and not live there.. well you can logistically but the tax inspector will just say "you don't work from that country and have no staff there, therefore as far as we are concerned you live and work in the UK and have to abide by all UK taxes/laws and regs". So essentially there is no advantage.

But then I started thinking.. and this probably isn't legal.. but unlikely to be caught.. could you set up a biz offshore, pay the business/corporation tax in that country (which will be low), then just go to that country, withdraw cash and carry that cash back to your home country and not pay income tax on it. Obviously im not talking about 10's of thousands. But it could be a nice couple of thousand buffer once a month.. fortunately in Europe a cheap couple of hour flight and you can be in different tax locations so it wouldn't be a particularly long/expensive trip to do so .

What about things like Bitcoin. Could you register a biz offshore then buy Bitcoin from that business and buy a high ticket item such as gold/jewelry and have it delivered to your home country as a tax free diversification?

Just thinking out loud here.. any more ideas?

Thanks

I do not know if it helps but some of companies I worked with they were from USA registered in for saving money as India is way too cheaper compared to...I don't think you have to pay taxes for what you made here because they might be paying tax here too...I see many companies do it so there must be some advantage in that

Register an offshore in a low tax country and get yourself moved to another country.
Ex: if you open an offshore in hong kong and you're living in UK you can just go over to another country or live in the country you have your offshore.

my only question to you. are you prepared and able to move your physical body out of the UK permanently? as long as the answer is NO -- keep on daydreaming. nothing will achieve your objective

As above you need to move yourself if you want to save much.

If you're going down the illegal route then just don't pay it. If its a new company then just let companies house knock it off. If its old then take the money out through (illegal) dividends and hide it under your mattress and then send a letter to hmrc and other creditors:
'Hi, got no money can't pay vat or coorp tax, can't afford a liquidator you can pay for 1 if you like'

By "assets" you mean money on your bank account or money constantly generated from your business activities? If they are constantly being generated, I would split my activities into two - half stays in the U.K and half in a suitable European country, which doesn't tax profits (Estonia for example). That way you will be able to direct money to the account that suits you best and if you decide to receive it on your Estonian account, it will not be taxed unless you take it out as dividends. Now - how can you get cash, a couple of thousand per month without any taxes? You just take it from the ATM, but it has to stay on the companies balance. Example - your annual profit is 24000 ? and you'd like to cash it. If you take it out as dividends, you'd have to pay 20% tax on that (20/80 X 24000 = 6000). BUT - take the money, spend it, but declare the money to be on companies balance, just in the form of CASH. Of course, this works better when the amounts are smaller, as you can't continue 10 years in a row like that. There are, of course, ways to eliminate that cash which the company "owns", but that's already another story. The point is - there are legal ways to reduce your tax burden.

Thanks for the replies guys. Seems like actually moving is the only real way. Dam! How come you hear about all these offshore millionaires paying no tax in the papers? I guess theres little truth in that and its the media looking for scapegoats.

LaurusK.... I guess that still involves moving myself. I mean. If i have company A in UK which my money goes into. Could I not set up an Estonian company and invoice my Uk company from there. So Estonia asks UK company for 1k a month for "services". Then send money to Estonia and withdraw it through ATM's? Id pay Corp tax on the money in the UK before I sent it to Estonia, but I wouldnt pay income tax on it pulling it out via ATM's.

I knew a guy that had a fund he was invested in in Turkey and you could withdraw money from that fund via an ATM. So every month he was withdrawing a couple of grand a month via ATM's and never got caught. Impossible to catch unless the people in Turkey volunteered his name and address.

ALSO.. thats talking about tax. What about just generally diversifying my cash so its not just in the UK banking sector or under UK governments control? Just to have a bit of international diversification

Consult with an accountant who specializes in this kind of stuff (I doubt they work cheap) - and do it 100% legit. No matter how clever you are - when you dodge taxes you're gambling against the house - and the house hates cheaters with a passion.

Might not be a bad idea to diversify some of your banking outside of the UK (bail ins). Again, talk to an accountant who specializes in this kind of thing; and do a sh*t ton of research on him first to make sure he knows his stuff.

Oh, yeah. If you can manage to pay the same tax rate that the millionaires calling for austerity are paying - don't forget to give back to the community

Hi again. No, moving is not required. What I meant was that if you have the possibility to choose which one of your companies is going to charge/invoice your customer, then there are no tricks. Let's say you work from your home in the UK, you've got two customers - 1 receives invoices from your UK company, the other one from Estonian company. By the book you would have to pay tax in the UK, as you run your business from he UK, but the thing is - you don't have to declare anything to the brits as long as you don't receive any income from the Estonian company (which you will not receive, as according to the bookkeeping no payouts have been made, just some of the money on the bank account is replaced with the same amount of cash in the companies safety deposit box). And that's it.

The option you described - your Estonian company invoices your U.K company. It is an OK solution, but that structure is weak when it's on your name, since you will not have real trading activities in Estonia (and the U.K tax guys will tell you it's a phony). If you register it on someone else's name it should work.

As for the big guys - they use pretty complicated structures - expensive to set up, expensive to administer. Just google IKEA's owneship structure and you'll get the picture.

AND - you'd need a local accountant who would keep your bookkeeping under control. approximately 200 EUR/month (15-20 receipts)

Best advice;

do shit the legal way.

Tommyg123 said:

Thanks for the replies guys. Seems like actually moving is the only real way. Dam! How come you hear about all these offshore millionaires paying no tax in the papers? ...

Click to expand...

they already have enough money to not need to move it back into their own physical hands. it can stay abroad in offshore banks because they never needed the money in their own physical hands to begin with

keeping money that you do need, in your own physical hands, tax-free, is a whole other story and the main objective behind your question

As many said, you'd have to physically move to make it legal. But as in many european countries, if you don't stay more than 6 months per year in the UK, you can make yourself resident in a low tax country (i.e Panama), and then stop paying taxes. If this is what you want...