offshore company + bank account to invoice another offshore company

[Freeman111]

Hi Everyone,

I am thinking of setting up an offshore company with a bank account, transfer money to this company account from my personal account and then invoice another offshore company, we are talking way below 100k usd a year.

What would be the best way to achieve this ? any downside you can think of I should be careful about ? the goal is to invoice an offshore company to show some profit and to pay myself a salary on a local bank account.

 

[Martin Everson]

I think your only mentioning 50% of the story needed to assess what you want‌ to achieve.

1. Why do you need to use offshore company?
2. Are you related‍ to the second offshore company in any way?
3. Why not just invoice the company⁠ as a self employed person instead of setting up an offshore entity.

 

[Freeman111]

Thank you for the reply!

Yes I am the owner of the⁤ existing offshore company where I need to get a monthly salary from, not sure if⁣ I can invoice myself.

i was thinking offshore because I would prefer to avoid the⁢ paperwork and fees associated with audit and taxes ... perhaps Seychelles or US LLC ?︀

Basically i need to move money around from a personal account to my offshore company︁ account and on to another personal account and make it look like profit for the︂ audit of the company, I was thinking through some "consulting" invoices.

i am not knowledgeable︃ about accounting at all and have a hard time putting my attention to it to︄ be honest, if there is any simple way to achieve this I am interested.

I looked at renting a company but they seems to take >5% on transfer of funds,︅ that's on top of the loss from currency conversion which I find a bit high︆ in the end ... but perhaps this is the best way.

 

[Gediminas]

Hey,
So why not receive a salary from the first company directly? As I understand,︀ for some reason you wish to create an additional layer between you and the original︁ company?

I would suggest the most cost-effective zero-tax countries, like Seychelles, etc. if it does︂ not create for you negative tax implications in your tax residency country. I suppose you︃ will pay all the income from this offshore company as your salary so that no︄ additional funds will be left. Hopefully, tax authorities will not be interested in applying CFC,︅ PE, or other anti-tax avoidance rules.

 

[Freeman111]

No worry about CFC PE and all this, doesn't‍ apply here so that makes it a bit more simple.
Perhaps transfer pricing might be⁠ a concern though ...

I need to have my existing⁢ offshore company (let's say corp1) to be in profit and then move most of this︀ profit as salary to a local personal bank account.

Yes you got it right, I will just︃ leave a tiny bit of profit to pay taxes on it and make the company︄ looks profitable to the audit.

My idea was to create another company elsewhere (corp2), fund︅ that company with my own money and invoice corp1 with it.
I am not sure︆ if this is realistic and if the banks will let this happen, its not a︇ big amount so hopefully it won't trigger anything ...

Is it doable to get a︈ bank account for a Seychelles company these days and that won't cost an arm and︉ a leg ?

What about a US LLC ? They seems very cheap and easy︊ to setup and to get a wise account for it which would fit well here︋ I think.

if anyone has a creative way to invoice your own company with your︌ own fund that would be awesome !

 

[MiltonStone]

Why would you do that if it is already taxed money? and why pay it‍ to a company to make payments to your self again? That would be paying taxes⁠ twice?

the bank is not your problem here. The taxes involved are⁢ the problem.

 

[Freeman111]

No the taxes are not part of the problem here.

In my example above the new company corp2 would not be in profit ever so no⁤ tax involved.
Corp1 will pay some taxes and i will pay taxes on the salary,⁣ this is intended.

There are many benefits to paying taxes and being a tax resident⁢ of certain countries, notably countries with territorial taxation system, as long as you control the︀ taxable amount that is.

Here I am just looking for a clever way to invoice︁ my company corp1 with my own fund.

 

[MiltonStone]

but the money you put in there‍ has already been taxed or do you live in a country where you don't pay⁠ taxes? Maybe it is black money?

What is the problem doing so, sorry, but you may over complicate the entire thing a⁣ little.

You can setup a UK LTD (unless you live there) pay in your taxed⁢ money and invoice this LTD or let it be invoiced. Once done, liquidate it or︀ leave it alone. File dormant accounts (or file the annual report with your agent) each︁ year and no one will ever notice it.

 

[Freeman111]

Everything is in good standing, the money is absolutely clean and need⁠ to stay that way, this is why I am trying to be careful and would⁤ rathe avoid a third party getting involved.
I believe doing this money moving around is⁣ not against any laws ... please correct me if I am wrong there.

ok interesting, I︄ will look into it thx.

Ultimately the problem is the banks, i have no idea︅ how the bank will react if they see me funding the company and then sending︆ the money to another company, and then there is the receiving bank ...