Holding company for domain names

[andrew28fl]

Hello,

I have never used a holding company, so I have some questions about if/how can I use them in my case.

I have a Single Member USLLC, which I conduct my remote business out of. I personally own about 400 domain names which I have acquired over 15 years, some of which are leased out to various other businesses at a fixed amount per month. Currently, I have the lessee pay to my US LLC. This is passive income to the tune of about $20k/month. This is adding $250k/year to my USLLC's revenue and since it's passive income, I am trying to see if I should use a better structure for this part of my business.

My question is about using a holding company for these domain names. If I form a Panama Holding company (or am open to recommendations), and that company gets paid from the lessee(s) for leasing the domains, would any substance be required for the entity? Since it only owns the domains which doesn't require any real work, what type of substance would be needed anyway?

 

[Sols]

Depends on where you live and what the tax laws there say.

There is no requirement under Panamanian law to have substance in Panama. But you should clear it with a local tax adviser as well, to understand the implication of inserting a Panamanian holding company into your arrangement.

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This is the probably the answer to your question.

 

[bibing]

A little OT but you got any tips on how to find lessees? I do have a small domain names portfolio but no luck in leases. Just once in a blue moon sale. Thanks

 

[andrew28fl]

Sols said:
Depends on where you live and what the tax laws there say.

There is no requirement under Panamanian law to have substance in Panama. But you should clear it with a local tax adviser as well, to understand the implication of inserting a Panamanian holding company into your arrangement.
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I currently live in Tbilisi Georgia, but I want to move to Malaysia once the new mm2h details are settled. It looks like Malaysia doesn't tax passive, non-remitted foreign income. Any insight will be helpful.

bibing said:
A little OT but you got any tips on how to find lessees? I do have a small domain names portfolio but no luck in leases. Just once in a blue moon sale. Thanks
Click to expand...

Most of my domains are in a specific niche, where I am well connected with other providers. Linkedin is a good resource to network with people who might be interested in your brands, it has served me well.

Sols said:
Depends on where you live and what the tax laws there say.

There is no requirement under Panamanian law to have substance in Panama. But you should clear it with a local tax adviser as well, to understand the implication of inserting a Panamanian holding company into your arrangement.
Click to expand...

Also, is it okay for the holding company to have a bank account, and accept payments? Does a holding company file taxes in Panama, if all its income is foreign-sourced?

 

[JohnLocke]

Usually income that is sourced from outside of Panama is not taxed!

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[andrew28fl]

JohnLocke said:
Usually income that is sourced from outside of Panama is not taxed!
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Right. I am more concerned about my country of residency, Malaysia to be specific. Any active enterprise managed from Malaysia will be considered locally sourced income (technically), even though there is no current enforcement of this. Does a Panama holding company owned by me need to be declared to Malaysia, and is there a way to avoid it?

 

[lory]

What went out to be the solution for your domains, where are you going to find a new home for them ?