OVZA
New Horizons Paraguay
Ticker tape by TradingView

Ensuring tax residency

Status
Not open for further replies.
D

dotpedal

New Member
Nov 22, 2016
60
0
161
Hi,

What can I do to ensure my company's tax residency is indeed in an offshore jurisdiction and not Canada in the eyes of the CRA? Canada has a tax treaty with Bahamas (the jurisdiction I'm looking at). I have a online web business. So far, here's what I have listed:
  • 1-2 yearly meetings with the company shareholders in the Bahamas where we make the plans for the business
  • Bahamas support representative (all emails etc. will be answered by someone who lives in the Bahamas)
  • Bahamas hosting (the website will be hosted in the Bahamas)
  • Business accounting and bookkeeping will be done by an offshore company service provider from the Bahamas
  • Registered office in the Bahamas a Bahamas law firm
Is there anything else I should do? What do you guys do to make sure your offshore companies actually serve a purpose?
 
It seems you have it all pretty much covered. Still I believe you will need‌ to have a CPA or Tax Lawyer locally available to help you fight with the‍ CRA once you file your annual financial tax report in Canada!

For 10 years or⁠ so it would have been the perfect tax plan, but today after all the changes⁤ and fight against tax evasion, money laundering etc. you need to do your homework carefully⁣ and have professionals on your side.
 
How much do you think a tax lawyer will charge for assistance for situations like‌ this?
 
I would rather be prepared and contact this person before they contact you. pay him‌ for one or two hours and ask him how to do it the best way!‍ If the CRA gets you with the pants down it will properly be too late.⁠
 
In Canada? I mean you need someone close to you. Not some "Internet agent" just‌ so you don't get me wrong.
 
Get some advice from a tax lawyer.
I don't know Canada's laws, but in some‌ EU countries what you wrote in the first post would be NOT enough to warrant‍ the company's tax residence in a foreign country.

This is what happens in some european⁠ countries:
  • you declare 1/2 meetings there, you even have the proof (flight tickets). but there's⁤ only one employee(yourself).

  • tax man see there's only one employee, yourself. But you're not fiscal⁣ resident in the foreign country where you have the company located...
  • you say: hey, I⁢ have customer support there
  • tax man says: who care about customer support, where is management︀ located? you are the management, you are here, so you'll running your foreign company from︁ this place = you have to pay us taxes.
  • then Double Taxation Agreements come into︂ place

But but but: if you're company is offshore, your name is not in some︃ public register or better there is not a public register, your offshore bank will not︄ report your name etc, you wouldn't care about all of this.
 
I second that what you say @challenge it is challenging to get this setup to‌ be approved by the tax office!
 
You might look in to having your company owned by a Foundation in Seychelles, Panama‌ etc, all with nominee directors / councillors. You sign a consultancy agreement so that you‍ can still act on behalf of the company for certain tasks, get paid etc. The⁠ nominees probably won't cover you alone but it is an extra barrier. The foundation however⁤ lets you legally state that you do not own or manage the company. The law⁣ in Seychelles even goes as far as stating the UBO of the foundation is the⁢ foundation itself so you are not even the UBO when banks ask. It's also advisable︀ to have the nominees as a co-signee on the bank accounts (but don't give them︁ full or sole access).
 
Great idea.. do you setup a︂ foundation? can you briefly explain the steps I have to go through to achieve it?︃
 
This sounds︃ really good. Bahamas I read have lots of huge corporation incorporated there for tax reasons?︄
 
@bountymounty I just updated my other thread having finally set up a Seychelles foundation. The‌ process itself was a lot simpler than I expected. I had a few phone calls‍ mainly for my own benefit to understand, clarify things I wasn't sure of etc. Then⁠ I filled out a questionnaire. It was about 9 pages but the company I used⁤ made it really simple with suggested answers or a 'delete the option you don't want'⁣ kinda thing. I provided scanned bank statement and passport, both notarized, and that was it.⁢ Just had to make payment and the foundation was registered in a few days. The︀ initial assets for my foundation will be my company shares but you can also do︁ it with as little as $1 i believe.
 
thank you for your update. How much have you paid for the foundation and what‌ is the company that you have used to setup the foundation? Can I trust this‍ to be 100% true to be the procedure no bullshitting here because you are selling⁠ services similar?
 
@bountymounty I don't sell anything and I have⁤ no connection with that company other than I am also a client. I can also⁣ only tell you about the opening process which I was happy enough with. I've gone⁢ through this quite recently though so I can't speak for ongoing support etc yet. As︀ for the prices, best to look on their website. they list them all there and︁ it will differ depending on what you want done.
 
Is this protecting you from your local tax⁢ auth. you think? I'm curious and that's why I ask 🙂
 
@auric All I can is, in theory yes hah. I hope I never have to‌ try prove it though and I would love to hear from anyone who has had‍ to. But I legally own and control nothing. If an investigation ever came it would⁠ probably come down to good records I imagine. That is to show the entities as⁤ separate from myself. ie; I have a contract and invoice the IBC for work done,⁣ money in I do up a loan contract etc.
 
Cross the fingers for you that this works. Would be awesome to hear from someone that⁢ has been through an audit!
 
Status
Not open for further replies.

JohnnyDoe.is is an uncensored discussion forum
focused on free speech,
independent thinking, and controversial ideas.
Everyone is responsible for their own words.

Quick Navigation

Forums

User Menu

Login
Community platform by JohnnyDoe © 2025 JohnnyDoe
Top Bottom