Offshore Pyramid Legal

[MostRerum]

Hello Offshore Community,

We operate an HLS-based video streaming service where we monetize content by placing advertisements on user-uploaded videos. Currently, our monthly revenue is around $10,000, which we receive in cryptocurrency.

We are considering the following structure and would appreciate your insights:

Setting up an offshore company (e.g., in a jurisdiction like Nevis or BVI) to receive the advertising revenue.

At the same time, we would open a local company (in our country of residence) that provides technical or infrastructure services to the offshore entity.

Through a valid contract, we would show that we are working for the offshore company (as service providers or consultants).

The local company would invoice the offshore company, pay local taxes, and pay us a salary or dividends, making everything legally compliant.

Is such a setup legal and viable in practice, assuming the offshore jurisdiction is non-CRS and the local entity fulfills all tax obligations?
Are there any common pitfalls or compliance issues we should be aware of?

Thanks in advance for your advice. ( What we can do )

 

[daniels27]

Why pyramid? It is the business model legal? If it is not, it is just money laundering, I would say.

Of course, you can claim that you are not affiliated with the ad company. But knowing that this is wrong, they may as well catch you. If you are more than one, it just takes one guy to get angry at you or not very security concerned and the whole thing blows up.

Also, if you are actually running an ad service from your home, the whole offshore company would be taxable at your home too.

I think the main question is how legal the whole business is. Do you know what?

 

[MostRerum]

Why pyramid? It is the business model legal? If it is not, it is just money laundering, I would say.

Of course, you can claim that you are not affiliated with the ad company. But knowing that this is wrong, they may as well catch you. If you are more than one, it just takes one guy to get angry at you or not very security concerned and the whole thing blows up.

Also, if you are actually running an ad service from your home, the whole offshore company would be taxable at your home too.

I think the main question is how legal the whole business is. Do you know what?

Thanks for the reply.

Let me explain better. We run a basic video hosting/embed site users upload whatever they want. Some upload series, movies, even adult content. We don’t manage the content, just provide the player and basic streaming backend.

That’s exactly why we’re looking into setting up an offshore company. Not to run from taxes or anything shady, but to keep personal info away from the front-facing part of the business. Obviously, some uploads could be sensitive or copyrighted, and we don’t want our real names involved if anything happens.

Right now, to be honest, we’re not reporting the income yet the structure isn’t fully ready. That’s why I’m researching all this. We want to do it properly and legally once everything is set up. The goal is to invoice through a local company, pay taxes, and keep the offshore side as the buffer between us and the high risk surface.

Appreciate any thoughts from people who’ve done something similar.

 

[daniels27]

Let me explain better. We run a basic video hosting/embed site users upload whatever they want. Some upload series, movies, even adult content. We don’t manage the content, just provide the player and basic streaming backend.

You mean you are hosting pirated movies? Do you know how illegal this is? You can check kinox.to story. I think even the developer eventually went to jail and all his bitcoins were seized.
https://www.pcwelt.de/article/1166700/kinox-to-hauptbetreiber-im-kosovo-festgenommen.html

Just try flying under the radar. Maybe open some side business that brings home the money you need to live and keep the coins.

 

[MostRerum]

We do not upload, select, or manage any content ourselves. We provide a neutral technical infrastructure (just like many cloud providers or CDNs filemoon / vidmoly ) that allows users to embed and stream videos.


We comply with takedown requests (DMCA or similar)
The system is user-generated and clearly separates infrastructure from content curation.


Our focus here is how to structure revenue in a compliant way (offshore/local split) for the service itself – not to defend or promote any illegal use.
If users violate copyright, we're open to enforcement measures.

 

[daniels27]

We comply with takedown requests (DMCA or similar)

The service is legal in your country of residence?

Our focus here is how to structure revenue in a compliant way (offshore/local split) for the service itself – not to defend or promote any illegal use.
If users violate copyright, we're open to enforcement measures.

If you are running the service from your home, you need to pay taxes on all your profits. Technically, the company you are running is tax resident in your home. This is from the place of effective management and permanent establishment rules. You can check the laws in your country or PWC tax summaries. If those terms do not sound familiar to you, please check my thread here:

D

Thread 'Tax Residency for Companies and Individuals: Permanent Establishments, Place of Effective Management, CFC and Certificates'

Saturday at 15:12

There already have been many discussions about how to stop paying taxes. We then often discuss that avoiding CFC rules and getting some mighty certificates won't do the job. But that's not how the magic works.

This summary won't necessarily apply to US citizens as they are subject to taxation no matter where they live. For those concerned, they need to file annually and pay taxes on their world-wide income while accounting for tax credits for taxes paid abroad, the foreign-sourced income exemption (FSIE), foreign bank account reporting (FBAR) and for high-earners also alternative minimum...

• daniels27
• Replies: 7
• Forum: Tax, Accounting, Licensing & Legal

• 

That being said, it may not be that easy to run a completely crypto company from your country. In that case, you can incorporate a company somewher and then pass all profits onwards to your company at home, i.e. you will need two companies. If ever somebody checks, it will be much less of a hassle, if you can justify the offshore company by business need and it does not generate any profits.

I guess, you can chose any offshore jurisdiction of your choice. Maybe form 3 companies and then you invoice those offshore companies on a monthly base for "services performed" or something. Try to avoid any jurisdiction that has withholding taxes on royalties as ad income could be classified as such.

 

[MostRerum]

The service is legal in your country of residence?


If you are running the service from your home, you need to pay taxes on all your profits. Technically, the company you are running is tax resident in your home. This is from the place of effective management and permanent establishment rules. You can check the laws in your country or PWC tax summaries. If those terms do not sound familiar to you, please check my thread here:

D

Thread 'Tax Residency for Companies and Individuals: Permanent Establishments, Place of Effective Management, CFC and Certificates'

Saturday at 15:12

There already have been many discussions about how to stop paying taxes. We then often discuss that avoiding CFC rules and getting some mighty certificates won't do the job. But that's not how the magic works.

This summary won't necessarily apply to US citizens as they are subject to taxation no matter where they live. For those concerned, they need to file annually and pay taxes on their world-wide income while accounting for tax credits for taxes paid abroad, the foreign-sourced income exemption (FSIE), foreign bank account reporting (FBAR) and for high-earners also alternative minimum...

• daniels27
• Replies: 7
• Forum: Tax, Accounting, Licensing & Legal

• 

That being said, it may not be that easy to run a completely crypto company from your country. In that case, you can incorporate a company somewher and then pass all profits onwards to your company at home, i.e. you will need two companies. If ever somebody checks, it will be much less of a hassle, if you can justify the offshore company by business need and it does not generate any profits.

I guess, you can chose any offshore jurisdiction of your choice. Maybe form 3 companies and then you invoice those offshore companies on a monthly base for "services performed" or something. Try to avoid any jurisdiction that has withholding taxes on royalties as ad income could be classified as such.

The work is legal but dmca and other things may block after a long time.
Also I can direct payment methods other than crypto to my offshore company's bank account. I can make an agreement with popads etc and any advertising provider. What do you think about this? I may not stick to crypto is it good way ? My intention is to make it seem like the company I established in my country only provides technical and software cloud etc maintenance to an offshore company. Thank you for this valuable information.

 

[alley]

You're just reframing the reality. Your company setup is perfectly fine and legal, as already mentioned, provided that the business model itself is legal.

However, allowing users to upload copyright-protected movies, series, etc., to a server and profiting from it constitutes an illegal business model. As such, any authority would dismantle your setup and likely have you prosecuted and imprisoned.

 

[MostRerum]

You're just reframing the reality. Your company setup is perfectly fine and legal, as already mentioned, provided that the business model itself is legal.

However, allowing users to upload copyright-protected movies, series, etc., to a server and profiting from it constitutes an illegal business model. As such, any authority would dismantle your setup and likely have you prosecuted and imprisoned.

Due to the distributed proxy structure, the exact server locations are intentionally decentralized. Although the model may raise legal concerns in some jurisdictions, we handle takedown requests (like DMCA) proactively, which helps us operate with minimal risk and more flexibility.

 

[SCHLOSSFINANZ]

its not legal. Period. Nobody cares if you have an Offshore company and trying to hide behind it. Do you really think when massive pressure comes up that Nevis or BVI won't disclose the ownership of your company and everything in a MLAT?

They just throw you before the bus. Also no bank will touch this.

 

[MostRerum]

its not legal. Period. Nobody cares if you have an Offshore company and trying to hide behind it. Do you really think when massive pressure comes up that Nevis or BVI won't disclose the ownership of your company and everything in a MLAT?

They just throw you before the bus. Also no bank will touch this.

Sorry I'm sorry I wrote it wrong. I wanted to say it's not legal if they can find real server. I have been in this sector for 5 years. Do you have any suggestions on how to use it money ?