Puerto Rico?

[thirtyniner]

Dear All,

I joined the "Dark Area" of the forum last week, and I was quite disappointed with the lack of feedback I got on this thread! I have been trying to participate and give my contribution on the subjects I have some expertise, and would expect the same from forum members regarding my questions.

Anyway, and considering I have some experience with offshore, I would like to know why there are so many negative feedback regarding Puerto Rico. Considering I'm an EU citizen, and that CRS is not applicable in Puerto Rico, what would be the Cons and Pros of opening: A) Company + bank account, B) Company Bank Account and C) Personal Bank Account.

Is it possible on this jurisdiction to to use Nominees and Trusts?

From what I have read across Internet, as well as some literature, this jurisdiction is not advised for US citizen. But what would be the issue with an EU citizen?

Thank you!

 

[Martin Everson]

thirtyniner said:
Considering I'm an EU citizen, and that CRS is not applicable in Puerto Rico, what would be the Cons and Pros of opening: A) Company + bank account
Click to expand...

Pros you would avoid CRS for now and can open corporate and personal accounts remotely. See my thread on 2 Puerto Rico banks that do this.

Cons are that there have been rumours of countries fishing for client accounts in Puerto Rico as its an obvious tax avoidence destination with 50% of the offshore banks formed in last 4 years following CRS. Governments around the world are not stupid. However banks like EPB deny this fishing claim which would be a game changer for Puerto Rico offshore banking and EU citizens use of them ca#"!.

https://europacbank.com/support/warning-against-claims-20200817/
Cons are also is that Puerto Rico is bankrupt banana republic. It is no place to park money and it has a bad reputation in financial terms.

thirtyniner said:
B) Company Bank Account
Click to expand...

See my first response

thirtyniner said:
C) Personal Bank Account.
Click to expand...

See my first response.

thirtyniner said:
Is it possible on this jurisdiction to to use Nominees and Trusts?
Click to expand...

What you mean to setup a company in Puerto Rico and use Nominees and Trusts or open an account with one of the banks for Trusts or companies with Nominees. You would need to ask one of the banks directly. Compliance literally changes on a weekly basis. So what is allowed now may not be allowed next week.

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

 

[thirtyniner]

@Martin Everson, thanks for your feedback!

I would prefer to go into a non-CRS country because I don't intend to use darks. I just want to spread a little bit the cash, as I have mentioned in my other thread.

I also came up with Dominican Republic as another potential alternative. What is your opinion on this? The good thing is that going there personally would not be a burden 😎

Martin Everson said:
What you mean to setup a company in Puerto Rico and use Nominees and Trusts or open an account with one of the banks for Trusts or companies with Nominees. You would need to ask one of the banks directly. Compliance literally changes on a weekly basis. So what is allowed now may not be allowed next week.
Click to expand...

I mean setting up a company under a trust, and/or using nominee director and shareholder. And off course, if this would be accepted for a banker to open a bank account.

I'm open to discuss other jurisdictions that are good for an EU citizen.

Last edited: Sep 13, 2020

 

[Sols]

Out of all jurisdictions in the Caribbean, Dominican Republic is probably the last one I would consider placing money in. Maybe third, after Cuba and Haiti. Fraud and corruption are taken to whole new levels there, unfortunately. I could be misinformed but that is my understanding and, albeit limited but still, experience.

One problem with Puerto Rican banks is that those licensed under the international banking law (which is how they get around both FATCA and CRS) is that they don't accept US companies. I believe it's because they can't under the law, but it could also just be the banks' policy.

So chances are you will have to go look elsewhere to form the company. While CRS/AEOI doesn't apply to companies, the old-fashioned TIEAs still exist and most jurisdictions now respond to requests for information from EU countries.

At the risk of sounding like a broken record, consider setting up a structure that's low (but maybe not zero) tax and compliant with modern AML and KYC laws. IMO, paying for example 5% tax in Malta and sleeping at night beats paying 0% and having to worry about whether this is the tax year that everything finally falls apart.

Toggle signature
This is the probably the answer to your question.

 

[thirtyniner]

Sols said:
Out of all jurisdictions in the Caribbean, Dominican Republic is probably the last one I would consider placing money in. Maybe third, after Cuba and Haiti. Fraud and corruption are taken to whole new levels there, unfortunately. I could be misinformed but that is my understanding and, albeit limited but still, experience.

One problem with Puerto Rican banks is that those licensed under the international banking law (which is how they get around both FATCA and CRS) is that they don't accept US companies. I believe it's because they can't under the law, but it could also just be the banks' policy.

So chances are you will have to go look elsewhere to form the company. While CRS/AEOI doesn't apply to companies, the old-fashioned TIEAs still exist and most jurisdictions now respond to requests for information from EU countries.

At the risk of sounding like a broken record, consider setting up a structure that's low (but maybe not zero) tax and compliant with modern AML and KYC laws. IMO, paying for example 5% tax in Malta and sleeping at night beats paying 0% and having to worry about whether this is the tax year that everything finally falls apart.
Click to expand...

thanks for your feedback. You mention US company regarding Puerto Rico, but I have mentioned that I'm EU citizen.

I can approach Puerto Rico in different ways. A) Or as a place for a personal bank account, B) a corporate bank account for a company created in Hong Kong, C) a new company incorporated in Puerto Rico and a bank account for the same.

i don't mind going for a jurisdiction that charges me 5% corporate tax. But is there any benefit? Which jurisdiction?

 

[Sols]

Just brought up US company because you mentioned incorporation in Puerto Rico. The international banks in Puerto Rico don't accept PR companies, either, from what I've seen.

thirtyniner said:
i don't mind going for a jurisdiction that charges me 5% corporate tax. But is there any benefit? Which jurisdiction?
Click to expand...

If your structure is legally sound and compliant, CRS is a non-issue.

It depends on where you live but unless you live in a tax haven, chances are you are hoping to use lack of CRS as a way to illegally avoid taxes. Secrecy from aggressive tax authorities is dead (or at least taking its final breaths), but sustainable and compliant structures are still alive and kicking. ”” This can be accomplished with local trustees, but even better is if you relocate to for example Malta or Cyprus, which as an EU citizen is easy.

Malta is an example with 5% tax (you pay 35% but get 6/7 back). The advantage is you don't have to worry about when/if the US and Puerto Rico start reporting under CRS or reciprocal FATCA agreements.

Toggle signature
This is the probably the answer to your question.

 

[thirtyniner]

Sols said:
Just brought up US company because you mentioned incorporation in Puerto Rico. The international banks in Puerto Rico don't accept PR companies, either, from what I've seen.


If your structure is legally sound and compliant, CRS is a non-issue.

It depends on where you live but unless you live in a tax haven, chances are you are hoping to use lack of CRS as a way to illegally avoid taxes. Secrecy from aggressive tax authorities is dead (or at least taking its final breaths), but sustainable and compliant structures are still alive and kicking. ”” This can be accomplished with local trustees, but even better is if you relocate to for example Malta or Cyprus, which as an EU citizen is easy.

Malta is an example with 5% tax (you pay 35% but get 6/7 back). The advantage is you don't have to worry about when/if the US and Puerto Rico start reporting under CRS or reciprocal FATCA agreements.
Click to expand...

The problem of relocating to Malta is under which excuse to do it, if I don't actually live there or intend to live in the future.

If you can suggest me a way to do it, it would be great.