Rethinking corporate structure
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I still think there's more to the extra provincial corporation thing.
Ok the article i linked contained some errors mentioning one time that EPC is a branch and a second time that's a subsidiary but it clearly said that EPC was tax free.
OP lawyer confirmed that the setup is tax free but not worth the hassle.
Ok "maybe" it's not worth the hassle for him but why he confirmed that it can be tax free?
Are both the author of the article and the lawyer full of it?
Ok the article i linked contained some errors mentioning one time that EPC is a branch and a second time that's a subsidiary but it clearly said that EPC was tax free.
OP lawyer confirmed that the setup is tax free but not worth the hassle.
Ok "maybe" it's not worth the hassle for him but why he confirmed that it can be tax free?
Are both the author of the article and the lawyer full of it?
It's tax free like a US LLC is "tax free". Once you live in the US or have employees there, it's no longer tax free.
And if you don't it's just taxed as if it didn't exist - doesn't mean it's tax free, just the branch part is only taxed on local income.
That's how branches work. Same thing with e.g. a Swiss branch of a foreign company.
And if you don't it's just taxed as if it didn't exist - doesn't mean it's tax free, just the branch part is only taxed on local income.
That's how branches work. Same thing with e.g. a Swiss branch of a foreign company.
The point is that in the article the author explicitly states that you can overcome the problem of having invoices accepted since those are coming from the Canada EPC.
Branches are taxed on local income because we all suppose that are used to serve the local market and if you invoice an international customer through the branch it should be taxed as local soured income.
I know that.
The fact that the author wrote an article stating that in Canada doesn't work that way piqued my interest.
There are some peculiar setups like the resident non domiciled companies in Malta that aren't talked about that︀ much and you can only discover by going deep into the rabbit hole.
I thought︁ EPC could be something like that because after reading some articles about it i still︂ don't understand WTF is it. It's not a branch, it is something that a company︃ that wants to operate in a Canada provice must do BEFORE registering a branch or︄ a subsidiary.
It is more like a license to operate in the province of your︅ choice.
It's someting peculiar to Canada as i never heard this requirement in any other︆ part of the world so maybe there's an advantage hiding there.
Branches are taxed on local income because we all suppose that are used to serve the local market and if you invoice an international customer through the branch it should be taxed as local soured income.
I know that.
The fact that the author wrote an article stating that in Canada doesn't work that way piqued my interest.
There are some peculiar setups like the resident non domiciled companies in Malta that aren't talked about that︀ much and you can only discover by going deep into the rabbit hole.
I thought︁ EPC could be something like that because after reading some articles about it i still︂ don't understand WTF is it. It's not a branch, it is something that a company︃ that wants to operate in a Canada provice must do BEFORE registering a branch or︄ a subsidiary.
It is more like a license to operate in the province of your︅ choice.
It's someting peculiar to Canada as i never heard this requirement in any other︆ part of the world so maybe there's an advantage hiding there.
After discussion and much debate, I think I’m going to go simply a WY LLC for operating, and either a DE LLC for holding assets or Seychelles/KY LLC under a nominee for holding assets , unsure the best approach currently. The holding company would never have a bank account (it would just hold crypto, assets).
Smart, make all your assets subject to US estate tax.
I mean, yes, there is an estate tax treaty with Canada, so I guess as an alternative, your relatives could then pay the Canadian tax bill + fines instead...
I mean, yes, there is an estate tax treaty with Canada, so I guess as an alternative, your relatives could then pay the Canadian tax bill + fines instead...
If what is viable?
It's clearly illegal if you run it from Canada (no substance in the other country) and the company doesn't pay Canadian tax.
You need to speak to a Canadian tax lawyer about this if you don't believe me.
If you understand it's illegal and you want to take the risk, maybe a US LLC will work, maybe it won't. I could imagine that there︀ is more information sharing going on between the US and Canada than between the US︁ and, say, France, but I don't know. Maybe not.
In any case, any assets held︂ by a US LLC at the time of your death will be subject to US︃ estate tax, unless a treaty says otherwise.
There is an estate tax treaty with Canada,︄ which means inheritance tax would be paid in Canada and that there would be no︅ or less estate tax in the US.
But then how do your relatives get the︆ paperwork from Canada that tax has been paid after inheriting a company that should have︇ paid taxes in Canada, but didn't?
Maybe they won't ask questions since you'll be dead︈ at that point, but maybe they will? That's a lot of ifs...
But maybe that︉ risk is acceptable to you, then that's fair. I'm just a fan of people making︊ informed decisions.
It's clearly illegal if you run it from Canada (no substance in the other country) and the company doesn't pay Canadian tax.
You need to speak to a Canadian tax lawyer about this if you don't believe me.
If you understand it's illegal and you want to take the risk, maybe a US LLC will work, maybe it won't. I could imagine that there︀ is more information sharing going on between the US and Canada than between the US︁ and, say, France, but I don't know. Maybe not.
In any case, any assets held︂ by a US LLC at the time of your death will be subject to US︃ estate tax, unless a treaty says otherwise.
There is an estate tax treaty with Canada,︄ which means inheritance tax would be paid in Canada and that there would be no︅ or less estate tax in the US.
But then how do your relatives get the︆ paperwork from Canada that tax has been paid after inheriting a company that should have︇ paid taxes in Canada, but didn't?
Maybe they won't ask questions since you'll be dead︈ at that point, but maybe they will? That's a lot of ifs...
But maybe that︉ risk is acceptable to you, then that's fair. I'm just a fan of people making︊ informed decisions.
But why a US LLC? Why not Hong Kong or something then?
And if US LLC why not at least add a UK trust?
And if US LLC why not at least add a UK trust?
@sebastian yes, but he did not want to spend that money for it and his wish list is simply too long.
Got it, thanks!
FYI: Other's are annoyed when people comment without even reading the first post, that's why I am summarising it for those while trying to stay nice to them:
FYI: Other's are annoyed when people comment without even reading the first post, that's why I am summarising it for those while trying to stay nice to them:
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