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.

Toggle signature
Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[Freeman111]

Martin Everson said:
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.
Click to expand...

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 company account and on to another personal account and make it look like profit for the audit of the company, I was thinking through some "consulting" invoices.

i am not knowledgeable about accounting at all and have a hard time putting my attention to it to 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 high in the end ... but perhaps this is the best way.

 

[Gediminas]

Freeman111 said:
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.
Click to expand...

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 original company?

I would suggest the most cost-effective zero-tax countries, like Seychelles, etc. if it does not create for you negative tax implications in your tax residency country. I suppose you will pay all the income from this offshore company as your salary so that no additional funds will be left. Hopefully, tax authorities will not be interested in applying CFC, PE, or other anti-tax avoidance rules.

Toggle signature
https://locked.money - Your Crypto Management Company, Ready in Days ”“ Trade, Invoice, $1,200/Year!

 

[Freeman111]

Gediminas said:
Hopefully, tax authorities will not be interested in applying CFC, PE, or other anti-tax avoidance rules.
Click to expand...

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 ...

Gediminas said:
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 original company?
Click to expand...

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

Gediminas said:
I suppose you will pay all the income from this offshore company as your salary so that no additional funds will be left.
Click to expand...

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

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

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

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

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

 

[MiltonStone]

Freeman111 said:
transfer money to this company account from my personal account
Click to expand...

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?

Freeman111 said:
I am not sure if this is realistic and if the banks will let this happen, its not a big amount so hopefully it won't trigger anything ...
Click to expand...

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

 

[Freeman111]

MiltonStone said:
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.
Click to expand...

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 the taxable amount that is.

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

 

[MiltonStone]

Freeman111 said:
In my example above the new company corp2 would not be in profit ever so no tax involved.
Click to expand...

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?

Freeman111 said:
Here I am just looking for a clever way to invoice my company corp1 with my own fund.
Click to expand...

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 or leave it alone. File dormant accounts (or file the annual report with your agent) each year and no one will ever notice it.

 

[Freeman111]

MiltonStone said:
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?
Click to expand...

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.

MiltonStone said:
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 or leave it alone. File dormant accounts (or file the annual report with your agent) each year and no one will ever notice it.
Click to expand...

ok interesting, I will look into it thx.

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