BVI substance sofware development
- Thread starter JohnDoe1122
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My clients will be Web3 companies. They︁ are mostly incorporated in places similar to BVI. I would mostly get payments using cryptocurrencies.︂ I can pay myself cryptocurrency dividends but what about cashing them out as a natural︃ person. Where do I have to get a bank account so I do not become︄ a tax resident somewhere? My home country may say that I am still a tax︅ resident there just because I have a bank account there no?
Generally bank account to not create any nexus, especially as you are entitled bank accounts in all EU countries as EU resident,︀ regardless of nationality.
Yes, in this case the places there are good. Check with your︁ mates, there are jurisdictions more open to crypto than others.
You can open any bank︂ account anywhere, just make sure the bank is open to crypto. There are quite some︃ discussions in this forum here, check out those.
Yes, in this case the places there are good. Check with your︁ mates, there are jurisdictions more open to crypto than others.
You can open any bank︂ account anywhere, just make sure the bank is open to crypto. There are quite some︃ discussions in this forum here, check out those.
What if the company hires a contractor to do part of the software development. For example. My company gets hired to do a website. And then I outsource that work to a contractor. How do things work with intellectual property? Will that be qualified as an IP business. From my point of view in the contract for hiring the contractor IP will be︀ transferred to my company and then my company will transfer it to the client.
What is the question about here? The rules for Economic Substance are like this:
1. You cannot use a BVI company to shift profits from another company to the BVI.
2. If you still want to do this, you need to prove that the relevant work is actually done in the BVI.
The question should be how to ensure it does NOT qualify as IP. For any IP transaction there are MORE rules to follow.
Long story short, if you do not transact with companies belonging to the same︀ person or their brother, father, wife, kids or close friends, you just invoice a service︁ and you are fine and do NOT need to follow any economic substance rule.
Short story long, you cannot claim IP on your source code and then licence the source︂ code to some company elsewhere to lower their corporate taxes. You also cannot sell services︃ to your own company elsewhere to lower their corporate taxes. You also cannot buy products︄ from your company elsewhere at ridiculously low costs to lower corporate taxes there. And transaction︅ that could be used to lower taxes elsewhere is not allowed.
1. You cannot use a BVI company to shift profits from another company to the BVI.
2. If you still want to do this, you need to prove that the relevant work is actually done in the BVI.
The question should be how to ensure it does NOT qualify as IP. For any IP transaction there are MORE rules to follow.
Long story short, if you do not transact with companies belonging to the same︀ person or their brother, father, wife, kids or close friends, you just invoice a service︁ and you are fine and do NOT need to follow any economic substance rule.
Short story long, you cannot claim IP on your source code and then licence the source︂ code to some company elsewhere to lower their corporate taxes. You also cannot sell services︃ to your own company elsewhere to lower their corporate taxes. You also cannot buy products︄ from your company elsewhere at ridiculously low costs to lower corporate taxes there. And transaction︅ that could be used to lower taxes elsewhere is not allowed.
So creating my own software and then asking for a subscription to use it should be permitted or that is in scope of ES. I won’t sell it to affiliated companies
It is risky. Just use a US LLC with a director in an offshore jurisdiction. It is cheaper and less risky.
Recommendations about cost-effective directorship services? Which jurisdiction should I look into? Do you think Philippines is a good one?
Yes, definitely cheap. I think you can easily find somebody who can do it for very little. Maybe philipino domestic helpers in Singapore could work too.
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