Starting up a business in Canada...... Small B or offshore? need opinion

[EightyTwenty]

Hello,

Ill keep this short.

I'm from Ontario, Canada
I have a product that I patented this year.
I have registered a company name under sole-proprietor

(Orig plan) My business is Import/Export
1. Ill be using E-commerce i.e. shopify store, to sell it.
2. Have manufacturing done in china.
3. Customers are all local.

My question is that when looking at Small Business deductions for Canada I think the rate goes to 10.5% anything under 500k.

I would like to set up a Belieze E-comm package from these guys located near me 🙂 Called them, seem ok enough.
Offshore Company Formation, Online Offshore Banking, US and Canada Incorporation.

The offshore company would be responsible for the ecomm transactions, trading between china. I would simply be a sales representative for the offshore company.

Would love some input on how to legally structure this.. if it's even worth it.

Thanks for the honest feedback.

 

[JohnLocke]

Welcome aboard, I just wonder what your agent has suggested you in regards to structuring‌ the business as you describe it?

And what is the purpose of the offshore company‍ in this case?

 

[EightyTwenty]

Thanks for replying.

I called that apintertrust⁠ place.. said I need to contact a tax accountant.. so i am waiting for those⁤ connections.

I am presuming that my 'configuration model' or 'purpose' would be configured similar to⁣ this,
How can I use an Offshore Company for international trade eg import and export?⁢ | Offshore Companies International

Purpose; It's super low risk..... it's Outdoor Sporting Equipment.

Re-invoicing
Offshore Re-invoicing Services

I am guessing something that involves these mechanisms.

First thing and only is︀ to be 'legal' if it's not worth it.. then whatever.. but Id appreciate abit of︁ help on my specific thread.. I am looking at others too.

Then theres merchant account︂ and the fees being higher...

so far it looks like Belize is top pick..

 

[EightyTwenty]

I also failed to mention

I have a EU Citizenship (dual) but I reside in‌ Canada...... maybe there's a (proper) legal way to utilise that... but I thought u had‍ to be a 'resident' not just a 'citizen'

Since Canada is so bent on 'declaring'⁠ worldwide income and beneficiaries... a 2013 topic i searched kinda scared me

There is no⁤ way to avoid tax evasion if you live in France, Canada, or USA. Period.

thoughts... in 2016...

I'm trying here guys.. so would having an EU citizenship while living in⁣ Canada... help this situation?

 

[EightyTwenty]

Apparently Canada and Cook Islands has a tax sharing agreement as per June 15, 2015‌

h ttps://w ww. fin.gc.ca/treaties-conventions/cook_1-eng.asp

thought cook islands was one of the good ones.

Belize is still 'under negotiation' with Canada since starting up in 2010

Basically, the way it‍ seems, is soon as there's an agreement.. probably not a good situation.

• Canada = Anguilla,⁠ The Bahamas, Bermuda, Cayman Islands, Dominica, Isle of Man, Netherlands Antilles, San Marino, St. Kitts⁤ and Nevis, St. Vincent and the Grenadines, Turks and Caicos Island,
  

Looks like it's Belize⁣ still.

some links
ht tp://w ww. oecd.org/ctp/harmful/43775845.pdf
ht tp://w ww. oecd.org/tax/exchange-of-tax-information/taxinformationexchangeagreementstieas.htm

Even BVI⁢ has an a Canadian agreement
ht tp://ww w .fin.gc.ca/treaties-conventions/notices/bvp-ivb-eng.asp

 

[negon]

Wow you are doing lot's of research OP. I don't have a clue about Canada‌ but from what I read the only way for US and Canadian citizens to open‍ an offshore company and bank account is to registere it with the local tax authorities⁠ in the respective countries and make use of double tax treaties as you already mentioned⁤ above.

You will need to consult a localt tax lawyer doing so. I needed one⁣ where I live to convience them about my structure to be legit.

 

[EightyTwenty]

Thanks for the reply auric.

Canada seems to be quite 'savvy' or so it appears.....‌ it looks like Belize will be participating in 2018.

There seems to be a difference‍ between 'active and passive' business income.. anyhow... I have contacted a couple tax offices to⁠ figure this out..

It seems the active business is (manufacturing, service i.e. selling a product)⁤ Passive (investments etc)

world-offshore.com (anyone have experience) had a convo with em recent.
Apparently Gibraltar⁣ was popular until authorities started asking for tax id numbers...for the beneficiaries

 

[EightyTwenty]

Well legit.. there's 5-6 places left that dont have TIEA agreements with Canada. and it‌ looks like global winds are pointing to 2018 as the significant year for those places‍ to have tax 'information' sharing. *at least officially* the 'practicality' of implementation seems a bit⁠ unsure.. but at that point.
why would u want to be in the game.

After watching videos taking notes about different levels of protection... higher order involving PIF and Co-Owned⁤ Trusts..... for max protections.... = most expensive.... which is fine by me.. never cheap on⁣ your assets i.e. 'antivirus/firewalls' for my computer for example..

anyone else care to chime in⁢

 

[JohnLocke]

This seems indeed to be the year where the major changes⁣ take place. I second your point in regards to the implemenation and how effective it⁢ will be in certain countries. I believe one thing is the overall regulations they agree︀ to apply to but the other thing is how they in real deal with it.︁ I believe that as soon as focus has been moved away from Tax havens and︂ tax evasion and all that because of other major events in this world then these︃ same countries will find workarounds to "forget" about the reporting or slow the process that︄ much that it gets useless.

At the end of the say regardless how hard they︅ publicly try to fight tax fraud and tax heavens then there are so strong interests︆ to keep something like that from the world's elite that there will be alternatives. This︇ is my personal opinion, nothing else.

 

[EightyTwenty]

thank you 'admin'

might i get your thoughts on

Offshore Cayman Special Economic Zone

They make a 'hard' pitch to Canadians specifically... and mention their TIEA 'openly'

This is about‌ establishing a 'physical presence' and generating and 'active business income', 'residency permit'

would i have‍ to 'uproot' and move there?

What are your guys thoughts on this........ help me understand.⁠ Thanks

 

[negon]

Did this lady explain it very well




but you will need to move there is‌ seems. So it is like any other country. If you move out of your resident‍ country and to a new one while you at the same time give up your⁠ current citizenship then you can start from scratch under the new tax laws in the⁤ new country you are not a citizens of.

 

[EightyTwenty]

🙂 oh yeah..... 'every question' answered in 2 minutes..........

i dont think u have to move‌ there... it does offer services to relocate... i.e. workers from other places.. would defeat the‍ purpose in a sense.

see what i get back in an email response...

theres a⁠ youtube video... 30-40 minutes long.. something like 18k for a basic office package...

 

[predator]

So as an Canadian you can settle down in the Cayman's and make you a‌ good living on the beach while you don't need to worry about taxes isn't that‍ the point here or what did I missed please?

 

[EightyTwenty]

Basically, yes.. this whole thing is predicated on the following points. After speaking with a‌ gentleman i found the following to be true

1. Your business serves international customers.... Cayman‍ Island City is set up for the 'technology' sector.
2. Residency.. RESIDENCY..... matters... yes you⁠ have to sever 'critical' ties with Canada (can't own house or have family), move and⁤ live in the Cayman's for tax purposes.... Now I was advised to spend the few⁣ hundo and speak with a tax accountant who specialises in offshore.
3. You do NOT⁢ lose Canadian Citizenship.... I wonder if that 180 day out of country makes you qualified..︀ something I have to ask the tax accountant.
4. If you get bought out then︁ move back to canada... the money is tax free. (again, provided the residency rules all︂ apply)

So basically yes they have a 50 year agreement... are under TIEA sharing....require you︃ to have an active business income, be technology based (preferred) but so far as I︄ can see..... long as you fulfill the residency and 'active business status' requirements.. it's fully︅ legal.

Well, Ima keep this on the back burner.. If i can start up something︆ first, get the funds.. and if the laws are favourable.

I am hoping that the︇ 6 month split thing is legit... just keep a place in Canada 'rented'...

(after looking︈ at the links.. it seems the 6 month thing is legit) will be an interesting︉ talk with the tax accountant/lawyer whatever. 🙂

It's an interesting set up.....

Non-residents of Canada

A good starting place

Deemed residents

 

[allan]

This is︁ how it Works in Europe too. You can freely move around in Europe and not︂ stay any longer than exact 6 months in every country, so you won't be liable︃ for any tax anywhere. IF you give up your house, familt etc. in the country︄ of citizenship. Or in otherwords you can't have a permanent address with an house etc.︅ for longer than exact 6 months anywhere.

 

[Emirates]

So what was the outcome of all of this.. OP where are you going with‌ this?

 

[MisterFree]

Isn't Canada a strict country like United States? Because I've been reading alot about US‌ being strict with outsiders and their own people as well. I would love to have‍ a business in Canada as well but I'm afraid of what my friend is talking⁠ about the costs of living in Canada, I think its better to have an Offshore⁤ company than actually live there and make a business right?