Help: Australian wants to grow portfolio using business profits, not be killed by 30% tax.

[curiousKitty]

I am an Australian citizen. I want to grow portfolio by reinvesting business profits, not pay 30% tax. The 30% tax can cause compounding damage long term. I don't plan to take cash for myself personally. I am happy to pay Aussie 42% rates of any cash taken by me. Business is advisory and holding shares in companies.

If there was a secret safe bank account where information is not sent to Australia, that would be good. I am open to ideas.

Question: What is the best structure for me? How will it achieve tax optimisation? How/where/with whom can I get bank account after that? What do I need to be careful with? Any recommended companies that could help me?

Goal:

1. Tax optimisation: I have been researching BVI, HK and Singapore.
   1. BVI has tax exchange information. I am not a student, government employee or business apprentice.
   2. HK has no tax exchange information with Australia. Will this work? If i open a USD bank account in HK and get USD payments, will ATO still figure out? Since all income is foreign would this be taxed at 0%. There is more compliance in HK, I am happy to put up with it.
   3. Singapore 17% sounds better than 30%. How can I guarantee safety regards to nominee becoming rouge?
2. USD/AUD Bank account with online capability. I need to pay staff.

Privacy from general public is nice to have.

Last edited: Mar 30, 2023

 

[Sols]

curiousKitty said:
I wonder if I have a secret bank account where money is safe I will be happy. I am open to ideas. I am not doing anything illegal.
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You might not be doing anything illegal yet, but you are trying to do something illegal. Tax evasion is a crime. You might also find yourself on the receiving end of money laundering charges.

curiousKitty said:
Question: What is the best structure for me? How will it achieve tax optimisation? How/where/with whom can I get bank account after that? What do I need to be careful with? Any recommended companies that could help me?
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Don't like Australian tax? Don't live in Australia.

Anything else carries a risk of repercussions that are far greater than just paying tax. What's saving on tax for a few years (until ATO finds you) compared to paying back taxes plus penalties and potentially spending time in prison? If you're by yourself or have a very mobile partner/family, there are a lot of digital nomad visas around the world now that you can use to move around across the world and pay little to no tax.

If you want a more permanent place to live, there are still a lot of options, especially if you are comfortable investing a few hundred thousand USD/equivalent in real estate.

The ATO is often touted as one of the most efficient tax authorities, on par with its peers (western Europe, US, Canada). I wouldn't recommend crossing them.

curiousKitty said:
HK has no tax exchange information with Australia. Will this work? If i open a USD bank account in HK and get USD payments, will ATO still figure out? Since all income is foreign would this be taxed at 0%. There is more compliance in HK, I am happy to put up with it.
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Hong Kong exchanges information with Australia under CRS.

https://www.ato.gov.au/General/Inte...lian-CRS-reportable-accounts-by-jurisdiction/

curiousKitty said:
Singapore 17% sounds better than 30%. How can I guarantee safety regards to nominee becoming rouge?
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You can't fully guarantee against that. However, you can take precautions such as ensuring you are dealing with a reputable service provider and have paperwork in place to at any moment remove the director. Even better: move to Singapore and be the director yourself. The process is quite clear and easy.

Otherwise, to quote PwC:

A company is a resident of Australia for income tax purposes if it is incorporated in Australia or, if not incorporated in Australia, it carries on business in Australia and either (i) its central management and control are in Australia (CM&C test) or (ii) its voting power is controlled by shareholders who are residents of Australia.
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Your Singapore company is tax resident in Australia and has to pay Australian tax.

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This is the probably the answer to your question.

 

[curiousKitty]

Thank you, cleanest is to leave Australia.