What offshore company and bank structure do I need?

[electric]

Hello,


Perhaps some of the knowledgeable people here could help me. I am trying to determine what is the best "offshore" structure for my business.


Here is a bit about me and what I want:


- I have a passport for both France and Canada.


- My business is providing a traditional low-risk internet service. (Nothing illegal or risky.)


- I have about 1 thousand customers, located around the world. Customers are both personal and corporate.


- Total gross revenue is about $150k (USD) per year. (Not much, but I am expecting to grow, and I am tired of paying corporate taxes in my home country...)


My goal is to create an offshore company that the business runs under. So all revenue from customers would then go into the offshore company's bank account(s) where it will collect (hopefully) free from corporate taxes. My "job" would be as a manager for the company or something. When someone asks me where I work, I will tell them I work for an oversea company as a manager of their services department. I do not want to be described or tied to the company as an owner or linked to the operation of the company's finances in any way.


I understand that tax avoidance is bad, so I am committed to always pay my personal income tax wherever I am living. When I need money, the offshore company will send me a wire transfer, which I will then declare as my personal income in my home country.


I am not sure how to set this up. Should I get an IBC in Panama? Seychelles? Where should I get the bank account? Should I get a merchant account? (They seem very expensive, and designed for high-risk business, which I am definately not.) Do I need two bank accounts? (One to accept payments from customers, then send money to another "holding" bank?) Do I need two IBC? A foundation that owns the IBC?


I am very confused with regard to what I really need. Ultimately, my goal is that I wish my company's revenue to collect tax-free in an offshore location, and then I will pay myself when I need money, and I will declare that payment to my home country. I do not want to be directly "tied" to the company as the owner. Which passport would I use to signup?


So in addition to a company and bank strucutre, I will also need a method for the business to collect payment from the customers. (paypal, 2checkout, instabill,moneybookers, cc merchant account... I'm open to anything that is reasonably priced.) My customers currently pay with credit cards using a merchant account that I have in Canada.


Thanks for any suggestions and help!

Last edited by a moderator: Feb 16, 2013

 

[coromandel]

Your biggest challenge is repatriating the money back onshore. You may be better off leaving the money offshore.


As for company structure, I'm sure experts will advise here.

 

[hugger]

electric said:
Hello,
Perhaps some of the knowledgeable people here could help me. I am trying to determine what is the best "offshore" structure for my business.


!
Click to expand...

To make the Offshore company bulletproof, you need a Hong Kong company owned by a Seychelles company. (The Seychelles company gives privacy and the Hong Kong Company gives respectability).


The Hong Kong company has a Hong Kong bank account (with one of the major banks, HSBC, Standard Chartered, Citibank. Lloyds, Barclays etc).


Any merchant account for CC payments will hang off the Hong Kong bank account.


The Hong Kong company is a completely separate legal entity to yourself.


AND a Hong Kong based company does NOT pay tax on any revenue sourced from outside Hong Kong. (If you have no Hong Kong customers then you pay NO tax. If you have Hong Kong customers, then you only pay tax on any revenue received from them).


IF you pay Directors fees or dividends to yourself in your home country, then you are liable for tax on those payments.


I personally would advise you NOT to bring the money into your home country, but if you are absolutely determined to bring big slabs of money home then the Hong Kong company should "lend" you money for the purpose of investment (eg property or a stock portfolio) and you only pay tax on the revenue from those property/stock investments.

 

[hugger]

hugger said:
To make the Offshore company bulletproof, you need a Hong Kong company owned by a Seychelles company. (The Seychelles company gives privacy and the Hong Kong Company gives respectability).
The Hong Kong company has a Hong Kong bank account (with one of the major banks, HSBC, Standard Chartered, Citibank. Lloyds, Barclays etc).


Any merchant account for CC payments will hang off the Hong Kong bank account.


The Hong Kong company is a completely separate legal entity to yourself.


AND a Hong Kong based company does NOT pay tax on any revenue sourced from outside Hong Kong. (If you have no Hong Kong customers then you pay NO tax. If you have Hong Kong customers, then you only pay tax on any revenue received from them).


IF you pay Directors fees or dividends to yourself in your home country, then you are liable for tax on those payments.


I personally would advise you NOT to bring the money into your home country, but if you are absolutely determined to bring big slabs of money home then the Hong Kong company should "lend" you money for the purpose of investment (eg property or a stock portfolio) and you only pay tax on the revenue from those property/stock investments.
Click to expand...

Some people here will recommend places like Cyprus etc as an alternative to Hong Kong. But be aware that Cyprus is suffering from the huge financial problems in Europe and is asking for major bail-outs which may (or may not ) be given by Germany. Greece got the bail-out but I am not 100% sure that Cyprus will. Therefore, I am not feeling positive about the ability of all (or any) of Cyprus banks to weather such a storm.


For me personally, it is not worth the risk. I want my money in a STRONG bank in a STRONG country.

 

[JohnLocke]

hugger said:
Some people here will recommend places like Cyprus etc as an alternative to Hong Kong. But be aware that Cyprus is suffering from the huge financial problems in Europe and is asking for major bail-outs which may (or may not ) be given by Germany. Greece got the bail-out but I am not 100% sure that Cyprus will. Therefore, I am not feeling positive about the ability of all (or any) of Cyprus banks to weather such a storm.
For me personally, it is not worth the risk. I want my money in a STRONG bank in a STRONG country.
Click to expand...

Well if you can predict the future you should do a business from it. It is your personal position. People should study carefully the situation in Cyprus and Europe in general, if they still think above is true they shall take a decision on their own or consult a professional.

Last edited by a moderator: Feb 19, 2013
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[electric]

Thanks hugger, this is very helpful.

hugger said:
To make the Offshore company bulletproof, you need a Hong Kong company owned by a Seychelles company. (The Seychelles company gives privacy and the Hong Kong Company gives respectability).
The Hong Kong company has a Hong Kong bank account (with one of the major banks, HSBC, Standard Chartered, Citibank. Lloyds, Barclays etc).


Any merchant account for CC payments will hang off the Hong Kong bank account.
Click to expand...

Would you recommend that I use nominee shareholder/director for the Seychelles company? Or do you think it is better to have a Panama Foundation that owns the Seychelles company, which then owns the Hong Kong company?

hugger said:
IF you pay Directors fees or dividends to yourself in your home country, then you are liable for tax on those payments.
I personally would advise you NOT to bring the money into your home country...
Click to expand...

I understand. What I was thinking is that my official job would be something like "Operations Manager" for the Hong Kong company. So the Hong Kong company would pay me a regular amount of a few thousand dollars per month, which I would then use to live. I do not need to buy a fancy house or car or live like a king. I prefer to keep the revenue from the business located in the Hong Kong bank. I will declare and pay personal taxes in my home country for all the money I receive from my job as Operations Manager for the Hong Kong company.


What do you think of that?


Also, since I have both a Canada and France passport, which country do you think is best to use when creating the Seychelles company and Hong Kong bank account? (ie: I must send a certified copy of my passport and utility bills, etc... which country would be best to use?) I am living in France right now, but I intend to move to Canada in a few years and will probably live mostly in Canada.


Thanks!

 

[coromandel]

Electric,


Can't comment on your specifics but you may be interested in a post relevant to your last comment about taking a living wage + retaining earnings in the company


Not able to post links but it's here on the same forum

 

[eclipse]

Sorry to open this thread, but OP how did you solve your problem? I have a friend similar in your situation!

 

[eclipse]

Electric,
Can't comment on your specifics but you may be interested in a post relevant to your last comment about taking a living wage + retaining earnings in the company


Not able to post links but it's here on the same forum
Click to expand...

Do you mind to elaborate what it is you suggest here, it's very interesting to read your comments?