Offshore IBC company for tax management

[CWI]

There seems to be some confusion here and its getting me confused 🙂


In short, my plan is to setup a Seychelles IBC with nominees + Cyprus bank account to serve as intermediary between my employer and my company in my home country. This way I invoice my employer from my Seychelles IBC and then have my home country's company invoice the Seychelles IBC just enough to keep profits to a minimum in my home country and minimize taxes in this way.


Each year I would pay dividends from the money accumulated in my Seychelles IBC bank account in Cyprus to a personal bank account either in Cyprus or Switzerland (inclined to Switzerland).


I see no problems because a Seychelles IBC does not need accountancy records and pays 0% tax on dividends.


If I am wrong in some way please advise. Thanks.


PS - I have been reading about some Cyprus banks needing a bailout due to the high level of exposure to Greek debt. Any reason to be alarmed or does CCLogic CSP have this into account when choosing the bank for a newly incorporated IBC?

Last edited by a moderator: Jun 17, 2012

 

[myoffshoreliving]

PS - I have been reading about some Cyprus banks needing a bailout due to the high level of exposure to Greek debt. Any reason to be alarmed or does CCLogic CSP have this into account when choosing the bank for a newly incorporated IBC?
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I hope they do, because I will soon be dependent on them to find me a place to register my offshore company and open a offshore bank account.

 

[JohnLocke]

PS - I have been reading about some Cyprus banks needing a bailout due to the high level of exposure to Greek debt. Any reason to be alarmed or does CCLogic CSP have this into account when choosing the bank for a newly incorporated IBC?
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Well we can't be responsible for the banks, however, we look at the most stable banks in Cyprus of course! But in these days no one can be sure about anything when it comes to banks also not in Cyprus.

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[JohnLocke]

Each year I would pay dividends from the money accumulated in my Seychelles IBC bank account in Cyprus to a personal bank account either in Cyprus or Switzerland (inclined to Switzerland).
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Well depending on how you are doing this you will get taxed from the tax office in Switzerland. You may consult a local tax adviser to get clarification.

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[JohnLocke]

In short, my plan is to setup a Seychelles IBC with nominees + Cyprus bank account to serve as intermediary between my employer and my company in my home country. This way I invoice my employer from my Seychelles IBC and then have my home country's company invoice the Seychelles IBC just enough to keep profits to a minimum in my home country and minimize taxes in this way.
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I really don't see any issues doing so, actually we know of clients who are doing exactly same thing. You will need to have certain agreements and contracts in place in order to make this bullet proof.

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[CWI]

Admin said:
Well depending on how you are doing this you will get taxed from the tax office in Switzerland. You may consult a local tax adviser to get clarification.
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How so? In the offshore company's jurisdiction I have already paid the tax on dividends (0% for the Seychelles case) and I am transferring that amount to a personal account in Switzerland.


What about if I opened my personal bank account in Cyprus? Would I have the same problem on dividends taxing?

 

[JohnLocke]

What about if I opened my personal bank account in Cyprus? Would I have the same problem on dividends taxing?
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Well, if you have nominees appointed than it can work both in the Seychelles and Cyprus, but then you will need to make use of the DTA (double Tax agreement) your country may have with one or both of these countries, and you will need to convince the Tax office in Switzerland that the company is managed and controlled in either Cyprus or the Seychelles. Typically this is done by appointing a nominee director and shareholder, and, with some sort of agreement between you and the company..

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[CWI]

Seems like more complication than I was asking for. Seems simpler to keep the money in the company's bank account.


Thanks.

 

[JohnLocke]

It depends on what the company's activity is. For instant lets say the offshore company will hold royalty's or patents and each month, quarter or year invoice another company for the fees, then this activity will be easy to proof that it is conducted from the offshore company (with nominees) and not from any local company.

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[moneymaker]

So possibly we could speak software patents and charging a royalty fee for some onshore company using the software?

 

[CWI]

In my case I will be providing specialized services for companies from other countries. The services will be provided in countries other than my home country, my employer's country or the offshore jurisdiction. I do not see any issue in proving that my activity is coordinated from the offshore company by the nominee director for example. Still, the issue is to transfer the dividends to a personal account in another country other than the Seychelles where I plan to incorporate my IBC without having any issues in that country.

 

[undercover]

I agree... no issues at all.. you are good to go CWI.

 

[Mimi Xunzi]

CWI said:
In my case I will be providing specialized services for companies from other countries. The services will be provided in countries other than my home country, my employer's country or the offshore jurisdiction. I do not see any issue in proving that my activity is coordinated from the offshore company by the nominee director for example. Still, the issue is to transfer the dividends to a personal account in another country other than the Seychelles where I plan to incorporate my IBC without having any issues in that country.
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I'm looking at the same setup. My questions, does 'no keeping of accounting records' mean that you can just spend your money from your Cyprus accounts as 'dividends', hence transfer it anywhere without keeping track but see it as divideds paid to yourself? Thanks,

 

[Mimi Xunzi]

Mimi Xunzi said:
I'm looking at the same setup. My questions, does 'no keeping of accounting records' mean that you can just spend your money from your Cyprus accounts as 'dividends', hence transfer it anywhere without keeping track but see it as divideds paid to yourself? Thanks,
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I see there is taxation on dividends, 15%, but not on income tax - it would be paying your loan, correct? Thanks!

 

[lostguy]

CWI said:
Would it be wise to create another bank account for savings and use the IBC bank account for the common expenses paid through the debit card?
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you always want to split your money in several accounts! You never know what is going to happen tomorrow!

 

[Spinat]

CWI said:
As I understand, if I want to "save tax money" in a legit way I need to get the non-resident status, otherwise I would only be hiding my money from tax authorities, correct?
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you may want to consut a tax lawyer in your country! Mot often this will help you to setup something that legally reduce your tax burden! To be non-resident isn't always the best solution and most people struggle to do so.

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