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Who Here Banks Offshore?

Discussion in 'Business & Tax Advice' started by cupid_stunt, Jun 22, 2009.

  1. cupid_stunt

    cupid_stunt Junior Member

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    I'm looking to bank offshore to pay less tax, and wanted some advice.

    I plan on opening an Non-Resident LLC in Gibraltar, but wanted to bank elsewhere.

    There is no tax for non-resident companies there:
    "Non-resident Flat rate of £200 per annum" "companies incorporated in Gibraltar which do not trade, earn or remit income to Gibraltar are not liable to corporation tax."
    However I have read this may be phased out in the next few years.

    I was then going to open an account in Switzerland of Luxembourg and bank there. This would be legal, tax avoidance (not tax evasion).

    Who banks offshore here? And what do you recommend? And how did you open your accounts?

    I need:
    - Residency or papers showing that I don't need to pay tax in that particular country/region
    - A secure offshore bank account
    - USD Currency
    - A Debit pr Credit Card

    I am not from USA btw.

    So what do my fellow BH'ters do to legally avoid / pay less tax?

    Thanks in advanced
     
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  2. teabag

    teabag Newbie

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    Hi, I'm a business strategy consultant and before the big crash I handled quite a few expatriate entity structures. There are different reasons beyond just taxation avoidance that dictate which jurisdictions you may want to incorporate in. Also extra-territoriality of incorporation alone does not guarantee avoidance of US Taxation, both State and Federal. There are specific techniques to doing this right which explains why so many people waste their money of half-assed Isle of Mann shells only to get a letter from the IRS.

    I usually charge a lot of money for this service, but since I'm learning so much in this forum I'll give you some info that's very valuable, but please excuse me if I don't give away the keys to the whole farm.

    You mentioned that you are not from the US, if that country's taxes are appreciabley lower than US you may want to just set-up an entity in your home country that owns 100% of you operations here and call it a day You UScorp could be a Delaware s-crp or LLC depending on certain other factors. To keep your personal income tax obligation to the US low, the overseas entity directs the UScorp to hire you for a reasonably low salary, say $50K and to pay for you car, travel, living expense, expense account, Health insurance and medical reimbursement and gym membership through a health flex savings account, everything you can think of so that your lifestyle costs are covered by the business.

    The idea is you're living say a $300K lifestyle, but only obligated to pay uncle Sam for the $50K on your W-2. And do not get stupid and push it all the way down to a net salary is Zero, that's a total red flag. Make it something reasonable and small like $50K and pay Uncle Sam every dime he's due on $50 K. I even recommend that if my clients aren't itemizing they just go with the 1040ez. Likewise you want to push down that AGI for your US Corp, and if it's an LLC you that one you do need to push down to zero or it just flows through to your personal return. All big money left over must be paid out to the offshore owner.

    Remember, the U.S. issuper vigilant in watching all outbound funds espcially if their heading toward known tax haven. If they deem the money was earned by commerce conducted in the US by your US Corp, and that it's only being ex-patriated for the evasion of taxation you're perp-walked right into federal court.

    However given that we're in the internet world, there are several easy things you can do to 100% justify and legitimize the outbound transfers. For example, the servers that run your business should be located in the off-shore jurisdiction, and the American Corp pays a hefty monthly fee for their lease and maintenance. Also any proprietary IP, the content on the site, any e books, whetever. All off these are the intellectual property of the offshore, and the U.S. corp is contractually bound to pay a huge royalty for thier usage. Just to be discrete try to keep you outbound transfers small l( like under 9K) to avoid having to fill out the patrioit act paperwork, and if you need to transfer more money than that spread if between a couple banks and branches. if you do everything I said, you're going to be fine anyway.

    Last critical step is that the incorporation laws in your offshore jurisdiction must allow for a registered agent in proxy to be shown as the owner of the offshore shell, so that his name appears on all contracts between offshoreco and USco, and that your name is true owner remains underseal in the corporate documents. This is especailly handy if you're doing any gamin sites, questionable adult sites or in the event of a divorce. The Proxy guy is allowed by you to open a bank account for offshoreco, but is prohibited by law from making any withdrawals. Depending on the jursidiction the proxy hands the bank a sealed envelope contaning your articles of in corporation and a series of PIN numbers that are all they have that idenitifies the accounts owners. At that point your money is safely off-shore in an account only you control but which the US goverment cannot even pierce to find you because if the did, there's nothing there just some PIN numbers. You can withdraw your money by any of the normal ways, cash check charge or transfer.

    I hope this helps. If so gimme some thanks. If you want my opinion on other structures or jurisdictions just post here and PM me and I'll give you my 2-bits. If you are interested in a professional consult or in me arranging this service on your behalf I'll have to charge you but I promise I'll give a sweetheart of a rate for BHW.:cool:

    ---TBag
     
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  3. Freddie

    Freddie Registered Member

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    Teabag,

    Wow a lot to read there. Why would any of this Uncle Sam stuff have any relevance to the OP as he states he is not from the US?

    If he doesn't have an office or employees in the US and doesn't own a server or other assets there why should he be bothered with a US LLC, US federal or state taxes etc?
     
  4. MakeLemonade

    MakeLemonade Junior Member

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    For all you folks in the US considering an offshore account, be careful. there's something called FBAR - Foreign Bank Account Reporting act. Yeah, if you're like me , you probably thought FBAR means Fucked-up Beyond All Repair.

    The law now says you HAVE to report foreign bank accounts you own or control or your corporation controls. It sucks - big brother to the max.

    I know about it because my Ex girlfriend is a high priced lawyer specializing in this crap. She's going to be getting a lot of business from people that didn't know it became illegal to have unreported foreign (Swiss, Cayman Islands) banks.
     
  5. N0H4T

    N0H4T Junior Member

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    Didn't Othello Obama get tough on tax havens during the last G20 summit? I heard that only 2 places are exempt from any grey or black lists now, Hong Kong and Macau. There is no FuBAR treaty there apparently!
     
  6. ThePickUpArtist

    ThePickUpArtist BANNED BANNED

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    So for dropshipping what would I do?
     
  7. cupid_stunt

    cupid_stunt Junior Member

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    Not so sure what you're asking, but to me it would be best to have an account in USD offshore, and a debit card so you can pay for things using that accounts (and can get paid into that account).

    Problem is I don't know where I can get a safe & secure bank account in another country.

    Cheers
     
  8. Grandslam

    Grandslam Senior Member

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    They're one in the same. There's quite a difference between REDUCING taxable income and tax EVASION.

    Don't be stupid. Get proper tax advice. Not just free tax advice.

    Find a competent CPA and pay them well. If you don't want to do that, then you probably shouldn't be attempting to go into business anyway.
     
  9. teabag

    teabag Newbie

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    Foreign nationals employed in the US or owning a business or real property in the US are subject to the same State and Fed Taxes as US citizens. So if OP is collecting Paypal fees to a checking account at the local BofA by his house he's got some explaining to do if he's not declaring that income in some way. On kind of a tangent, I actually have had some buddies who make big corporate salaries set-up an llc or s-corp for online business just so they can run a bunch of expenses through there and try to get that AGI down. But that's a different story.
     
  10. teabag

    teabag Newbie

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  11. teabag

    teabag Newbie

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    Definitely!!! Anyone who goes off and tries to do anything like this without the help of an experienced professional is an idiot. And technically speaking, this isn't tax advice, this is corporate structure. The taxation aspect effects corporate structure and vice versa, but as I said originally there are many other reasons for offshoring beyond just tax.
     
  12. teabag

    teabag Newbie

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    I'm not sure what the reference to dropshipping is either. There is a little trick that international exporters do where they reprice their cargo while it's at sea as a way to not have to fully book profits in their country of origin, but dudes that's the way advanced class.

    Regarding the USD account. Honestly if I were earning in Euro or Yen or especially in RNB I'd leave it in the foreign currency. Dollar is going down, so why buy into a stock you know is going to fade?
     
  13. teabag

    teabag Newbie

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    Sorry about the ton of posts all lined up at the end here. I was trying to answer inline in the threads but I guess I don't know how.

    T-Bag
     
  14. Freddie

    Freddie Registered Member

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    Must be missing something. The OP says he is NOT from the US.


    Regarding getting your advice from a CPA: As far as I know under US law they are required to report suspicious activity to the government.

    In other words they are, by law, required to RAT on you.

    Given the entrapment culture in the US they would be stupid if they didn't.

    If you are a US citizen or a US resident this offshore stuff is a MINEFIELD.
    Be VERY, VERY careful what you do or who you listen to because more likely then not it is still going to get you in trouble.
     
  15. cupid_stunt

    cupid_stunt Junior Member

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    Well just to clarify things:
    - I don't piss around with PayPal.
    - I will be getting paid weekly by CPA Networks via Bank Wire straight into a foreign account.
    - Ideally I'd just have a debit card with this foreign account and can fund my Adwords account with that. (My income is from PPC)
    - I am not from USA.
    - So essentially all of my work is offshore. All of my money, my sites hosting etc, so lets say I also registered a company in Gibraltar (for non residents) I legally don't have to pay tax.

    Thanks for your input, but posts telling me I'm only going to get screwed from the IRS aren't exactly productive.

    If I do what I mentioned above, how would the IRS ever even know I do internet marketing? And how is it illegal if I'm essentially based offshore in a tax haven?

    Cheers
     
  16. bluey

    bluey Registered Member Premium Member

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    One thing to remember now is the anonimity from authorities is nearly in possible an offshore LLC in Gibraltar is no more anon than a UK company (they all report to tax and any requesting government agencies). There is currently a cull in the Uk of offshore locations so forget avoiding tax this way.

    Here's an idea why not pay tax in the country where the company is it will be cheaper if you choose wisely Cyprus used to have 6% tax which was what a lot of offshore workers in the Middle East used to use. Not sure what it is now?

    Remember tax avoidance and tax evassion are very fine line.

    One note it is illegal for a US company to have a Offshore Bank Account and the IRS are not good to piss off.
     
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  17. Freddie

    Freddie Registered Member

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    That actually depends on the tax laws of the country where you are a resident. There are quite a few possibilities here in how the tax laws in your country of residence view this kind of activity. Depending on the country you live in it might be deemed that either you or your company is taxable in the country of your residence anyway.

    Gibraltar is part of the EU. Therefore generally speaking not a good idea if you ask me. It MIGHT be usable IF you are NOT an EU resident or passport holder.

    The question is are you REALLY based there. If your desk or wherever you do the work that makes the money is not based offshore or the beneficial owner is not based offshore, then the taxman in the place where the work is done or were the beneficial owner resides might have a different point of view.
    They could e.g. argue that the business is run or controlled from where you actually are. Does the country where you reside require you to declare foreign assets? Etc.

    This is not as easy as you might think it is.

    Either way make sure that you do not own any assets that are US based and that you do not hire US employees as that will definitely bring the US IRS into the picture. I am assuming here that the CPA companies you refer to are US based.
     
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    Last edited: Jun 26, 2009
  18. silicon_ronin

    silicon_ronin Registered Member

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    Hi,

    I use British Virgin Islands (BVI) and Belize companies with a bank account and mailing address in Hong Kong, where income derived offshore is non taxable and the banks welcome foreign companies to open accounts. I'm a Citizen of an EU country that only taxes residents - but I haven't lived there in over 40 years, and I work in an Asian country that only taxes foreigners on locally sourced income, so I don't pay anywhere

    My banking is multicurrency and with ATM card and internet access. I've used the same bank and incorporators for various companies in this way over 19 years and it works well

    If you are a US Citizen, you're screwed by and large, as your money is needed for bailing out Wall Street and the White House - but OP said he was not.

    I would avoid Gibralter or any EU jurisdiction to be honest, the days are numbered

    Regards

    Ronin
     
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  19. volla

    volla BANNED BANNED

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    I use Offshore companies and bank accounts for my business in Cyprus and Mauritius which is 100% legal and very easy if you want to save taxes. I am in the last stages of finalizing deal with the concerned person there so that I could offer that service to fellow BHW Members.

    Cheers...
     
  20. silicon_ronin

    silicon_ronin Registered Member

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    Hi Voila,

    I'm wondering why you chose those two jurisdictions over say the BVI

    Cyprus requires audited accounts and even without the accounting fees is expensive in comparison

    Mauritius is new but does it offer any benefits over BVI?

    BVI is cheap, allows for anonymity, no accounts required. Every time I do a new incorp I check around but haven't yet found a reason to change

    As for banking, Hong Kong is king

    Apart from being one of the most efficient financial centres on earth, look at it from the point of you of "money flow"

    If you send or receive money to or from a place like say Mauritius to your home country - what does this look like. Or Panama, Bermuda, BVI?

    The majority of funds flow with this pattern is offshore structure related as these economies have little other trade.

    You stand out like a sore thumb and get flagged for an audit

    Now, HK is still a major global trading hub and much of the China exports get funds flow via HK. Your country, wherever it is, will have a massive flow of funds to and from HK all related to trade and finance - and you won't get flagged as easily as if you had banking transactions with Cyrpus or Mauritius.

    Keep a low profile, hang out in a large crowd...

    Ouch!!!

    It depends on who you are, where you are, what you are doing...

    If you are a US citizen you may as well drop your pants, bend over a desk and ring the Feds now and get it over with.

    Seriously, Americans trying to dodge taxes this way will get nailed...

    I've been doing this 19 years, have great links to the right professionals and like to think I know what I'm doing - but I would not offer this personally as the rules change quickly and you must absolutely know your clients

    When (not if) you get a rogue client and they get nailed for a crime, you'll be in the hot seat.

    Here's a true story

    I live in a third world Asian country, layback tropical lifestyle. A few years ago I met an American in his late 30's, a former school teacher turned internet guy. He settled in with his local wife and kids and started to scam the US government and broke Federal laws in doing so.

    Emboldened, he started to do this for other Americans who gladly paid him a big chunk of what they illegally saved or accrued.

    He was a long way from the USA and untouchable right?

    Wrong!

    Early one morning two FBI agents and two local police turned up on his doorstep in my island location. He was told to pack a bag and then taken to the local airstrip where a charter flight flew him to Guam - US Federal Territory - and appeared before a US Federal Judge for arraignment.

    He was then flown to mainland USA in chains, and after a plea bargain copped a US$1 million fine, 5 years federal jail time, and had to rat on every participant in the scheme (who were then of course investigated)

    It's not just the CIA that renders people nowadays - be very careful

    Regards

    Ronin
     
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