Cyprus Residency + US LLC

[ecommerceoffshore]

Hi all, I am a Canadian citizen living in Cyprus under non dom status. Wondering if I do Ecommerce in USA with an LLC, where the LLC is 100% owned by a 0 tax offshore corp, if the structure could work such that the LLC distributes $$ to the offshore corp which isnt taxed, then I collect dividends from the offshore corp at 0% tax with the 2.65% up to the cap.

If so, I understand that certain countries can be tricky to deal with for banking and compliance concerns. If this structure can work, any suggestions on offshore countries to form the corp where they're 0 tax on this income, and also will allow for proper banking / wire transfers and be legal with regard to black lists etc?

 

[Marzio]

ecommerceoffshore said:
LLC distributes $$ to the offshore corp which isnt taxed
Click to expand...

LLC doesn'd distributes anything as it's a transparent entity so everything is taxed at 12.5% in CY

 

[ecommerceoffshore]

@Marzio I understand this fact, although even this is unclear about how each country interprets the US LLC. You're saying Cyprus tax law specifically acknowledges the transparency of an LLC? Some countries dont know what to do with the transparent structure apparently and therefore still treat their distributions as dividends.

In any case, why not just have the US LLC owned by a 0 tax offshore company in, say, Panama, (they do territorial tax) and then I own the Panama company, which pays me dividends?

 

[CyprusLawyer101]

There are a few jurisdictions that treat it as opaque and what you suggest seems to work. Of course the mamagement and control risk , although mostly in theory, still remains.

 

[ecommerceoffshore]

@CyprusLawyer101 you mean CFC rules? As relevant to Cyprus, or the offshore company like Panama or another? As I udnerstand it, Cyprus CFC rules only apply to Cypriot businesses and not natural persons.

 

[CyprusLawyer101]

ecommerceoffshore said:
@CyprusLawyer101 you mean CFC rules? As relevant to Cyprus, or the offshore company like Panama or another? As I udnerstand it, Cyprus CFC rules only apply to Cypriot businesses and not natural persons.
Click to expand...

Hey, no, I mean the test determining tax residency. If the management of the LLC or the offshore entity, or both are deemed to be managed from Cyprus( by your good-self for example) then such companies could be rendered as Cyprus tax residents by virtue of the aforementioned test. In practice I believe such structures have never been challenged hence the reference to the risk being theoritical. You could though, by structuring properly and diverting certain parts of the operation and building proportionate substance to the entities involved in the structure cover also for this theoritical risk, in case it becomes real.

 

[ecommerceoffshore]

@CyprusLawyer101 I thought this could only apply to CY tax resident companies controlling foreign companies, and CY has no governing law regarding tax resident natural persons controlling foreign companies

 

[CyprusLawyer101]

ecommerceoffshore said:
@CyprusLawyer101 I thought this could only apply to CY tax resident companies controlling foreign companies, and CY has no governing law regarding tax resident natural persons controlling foreign companies
Click to expand...

You are confusing management and control test with cfc rules.

 

[ecommerceoffshore]

@CyprusLawyer101 perhaps I am. I thought management and control is a test of whether a foreign corporation is controlled and managed within a given country.

 

[Hydrox]

do you guys know where to get Cyprus Limited + Offshore Corp on nominee the cheapest and safest possible way?

 

[CyprusLawyer101]

ecommerceoffshore said:
@CyprusLawyer101 perhaps I am. I thought management and control is a test of whether a foreign corporation is controlled and managed within a given country.
Click to expand...

Yes, it is. But that usually means an individual managing the company

 

[CyprusLawyer101]

Hydrox said:
do you guys know where to get Cyprus Limited + Offshore Corp on nominee the cheapest and safest possible way?
Click to expand...

I surely do know a good place. But I am not sure it fillfills your definition of cheapest.

 

[Hydrox]

CyprusLawyer101 said:
I surely do know a good place. But I am not sure it fillfills your definition of cheapest.
Click to expand...

Can you contact me via direct message somehow so we can get in contact? I'm not sure how it works on this forum

 

[yngmind]

ecommerceoffshore said:
Hi all, I am a Canadian citizen living in Cyprus under non dom status. Wondering if I do Ecommerce in USA with an LLC, where the LLC is 100% owned by a 0 tax offshore corp, if the structure could work such that the LLC distributes $$ to the offshore corp which isnt taxed, then I collect dividends from the offshore corp at 0% tax with the 2.65% up to the cap.

If so, I understand that certain countries can be tricky to deal with for banking and compliance concerns. If this structure can work, any suggestions on offshore countries to form the corp where they're 0 tax on this income, and also will allow for proper banking / wire transfers and be legal with regard to black lists etc?
Click to expand...

It was discussed many times here before.

You can do it with an HK entity. If you have management outside of CY, it will work.

It will also work if you own your US LLC through an HK LTD and have sufficient management there.

Toggle signature
I'm not a tax advisor, so please don't consider my posts here as tax advice. Always seek a professional opinion.
___
Business Bank Account for your US LLC Remotely