Houdini said:
In the thread below, the discussion developed around whether it is possible to register a company with a passive owner who, due to their passivity, is not listed in any public register, as I understand it.
@Don claims he can explain how this can be done, for example, with an Estonian company, as I understand it.
However, he preferred not to share the details in any public forum but rather in the Mentor Group Gold section.
I have now created a thread here, and I hope you can elaborate on how this could be possible so that others can contribute with their opinions afterward.
[COLOR=#8c9eff] E [/COLOR]
Dec 20, 2024
Dear all,
I need to get a company in Europe and I need that my name is hidden in both director and shareholder.
So I need an anonymous company or I need a nominee.
I don't need to run a black business or run a weird business, I just need to hide my name with competitor and other players in my business.
The business is completely legit and white (offering marketing services in B2B).
I need a bank account as well with EUR IBAN.
Where can I get this?
I know that Cyprus offers the nominee, but Cyprus is not fine.
I tried with SA company in Switzerland but fiduciaries don't reply to my...
Click to expand...
Ok, here goes:
Intro: The complexity of Silent partnership arrangement is above average, so I recommend getting professional advice before setting up anything like this (feel free to DM).
On the other hand, Silent partnership agreements offer extensive contractual freedom and operate under minimal regulatory oversight, allowing for controls to be customized according to specific needs and enabling silent partners to invest with optimal flexibility and simplicity.
The silent partnership has a "vocal brother" or a regular unincorporated partnership that is a very popular structure with thousands of users across the earth. Check yourself online for Xolo Go. The service takes like 6% for paying out to the partner, while they call it "invoicing as a service". They will disclose who the partner is on the invoice, while you would not have this happen with a silent partnership structure. The underlying regulation is more or less the same, though.
Becoming a silent partner allows one to support the dreams of passionate entrepreneurs while honouring their own need for a quieter, less visible role, ensuring that every success is shared and celebrated together.
1) Estonian Silent Partnerships (or regular unincorporated partnerships) are not registered in the UBO/Corporate register in Estonia. This is a unique feature in the EU, as in most other jurisdictions (if not all), such as Cyprus, partnerships must be registered with the authorities to be considered valid. Attached is a document that explains this topic from a broader perspective, including how Estonia has taken a stance related to implementing EU AML directives that such structures are out of the scope of registration.
2) The regulation is based on the Law of Obligations of Estonia.
https://www.riigiteataja.ee/en/eli/ee/527122023005/consolide/current
3) Such (silent) partnerships can also have (registered) permanent establishments abroad, creating interesting structuring possibilities. Unincorporated structures are generally taxed only based on PEs and not on their worldwide income.
4) From an income tax perspective, they are treated as tax transparent, which enables structuring the partnership in such a way that the silent partner might not be liable to pay any tax in Estonia or file separate tax reports.
5) Imagine an Estonian company as a trader + an individual/other company as a silent partner in a silent partnership. Estonian company distributes profits to silent partners without tax in Estonia. Estonian company itself pays tax only when it distributes profit. The silent partner pays tax according to his own tax exposure.
6) Care must be taken to avoid VAT exposure, and proper documents should be prepared for the partnership to avoid tax risks.
7) Although I've faced claims that they are not easy to bank, I consider them powerful tools for payment processing. Yes, financial institutions have claimed they never came across such a structure, but it has worked well, provided that there is some minimum level of substance.
8) Such a structure requires a high level of trust from a silent partner, which is why I find there's not much point in marketing it. The silent partner has legal rights and can enforce them in court against the trading partner; however, it's important to note that the assets of the silent partnership are not ring-fenced.
Why Estonia?
1) (Silent) partnerships do not have an obligation to be registered with authorities
2) Can get EUR banking for the partnership. Whitelisted jurisdiction.
3) Carte blanche structure available (more below)
4) "Corporate directors" available (a partner in an incorporated limited partnership can be another legal entity)
5) Is it possible to set up a structure where no financial statements need to be disclosed to the authorities (using incorporated LP)
6) Decent possibilities for tax planning
7) It's often interesting to have a front company in a whitelisted jurisdiction such as Estonia. If the silent partner is offshore, e.g., SVG, then it's easier to handle banking, as the payments to SVG will be just profit distributions. This also makes payment processing cheaper, not to mention that clients might have problems with receiving invoice from a less reputable jurisdiction.
How to set up a "carte blanche" structure?
The company appoints a trusted person as director and operates a Silent partnership where most profits are regularly paid to the silent partner.
The (initial) shareholder is a 3rd person/entity who/which signs a carte blanche (without date) sales of shares agreement with the buyer, who might already be the director or authorized representative.
The "original shareholder" remains a shareholder/UBO until the sale of shares agreement is executed.
Whenever the director feels like it, he/she can date and sign the agreement and submit the changes in the business register to get the shares in his/her name.
In the meantime, the original UBO/Shareholder could remain in place.
*It is possible to avoid notarization, making the process highly convenient and relatively quick. Limited companies can also have virtually unlimited shareholders - e.g., 100000 shareholders, each owning 0.01 EUR of the company.
I hope that helps.
Attachments
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SP legal - aml - implementation.pdf
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