Offshore corp profits

[alaintou]

Hi all, I'm a new member here, I've learned a lot but I have simple question that my accountant (local) can't answer. From your experiences, if we are having a corp registered in Caribbean, any island where no bookkeeping is needed, and shareholders need to declare worldwide earnings in their own countries, how can the corp profit be verified? Are they going to ask for bank account statements?

Thanks

 

[negon]

This will require accounting for the company and audited accounts from some trustworthy accountant i.e.‌ Price Water House, Deliotte, KPMG or other trusted accounting firm.

 

[alaintou]

So you mean that even if the country where the corp is registered is not‌ asking for yearly filling/bookkeeping, we'll have to hire big firm to back us up in‍ case we are asked for profit proof in our countries?

 

[niggashit]

He can't afford PwC as for me. Cost is higher.

 

[negon]

yes correct, that's how it works if you want to avoid trouble with the local⁤ tax office! Sorry but that's todays fact after all the s**t they are regulating around⁣ the world with the USA paramount!

 

[alaintou]

Thanks negon. So if the business is legit (unless using darks or having a huge‌ budget to hide behind a complex structure), there is no point of using Caribbean location‍ to register a company (in 2019) then?

 

[JohnLocke]

You will have to research on the banks, it's them that are going to report‌ you, so if you can find (I doubt) a reliable bank that is not under‍ CRS and other information exchange regulations you may have found the key to total banking⁠ privacy. As I said, I don't believe this exists unless you may have millions available.⁤

 

[alaintou]

Aaah, now I see the picture, thanks! It's the CRS thing that f#^&ed it up.‌ So bank will report an amount, local taxman will ask me what's that money, I'll‍ say it's from a company I own shares from, they'll ask for bookkeeping, that I⁠ won't have since not needed from the registered company location, then I'll need Price Water⁤ House, Deliotte, KPMG

 

[sergeylim88]

I am not sure if that will work that way.
Things that you should worry‌ about are:
- CFC rules (if the residence country have them)
- dividend tax

Local tax authorities will not ask you for the books of the company.
For sure entire‍ amount will be taxed with dividend tax, but if the country has CFC rules they⁠ might FIRST tax entire amount with corporate tax which is the country where you are⁤ resident, and the SECOND tax will be dividend tax on the rest.

Avoiding CFC can⁣ be done by proofing that the management is not done by shareholder, and that it⁢ is in fact managed in country where it is incorporated.

This is what I've found︀ so far, if I am wrong - please someone correct me.

 

[negon]

You got it! thu&¤#