Best places for formation/banking for consulting

Why not incorporate a local company and use a local bank? Or relocate to a tax haven?

Maybe an obvious question but one I think not enough people ask themselves when they start researching tax havens. In this day and age of automatic information sharing and increased transparency, I'm struggling to understand what benefits people see with offshore companies (without an offshore substance as well) and proper tax planning.

@Robroy1 I always suggest an onshore and offshore company construction. So you make your regular business with your UK company and drag out profits with your offshore company then. This gives you the highest interoperability with your customers and possibility to build trust and a brand, because I guess you don't want to have your name appear in your offshore company, right? And you have the chance to sell your business one day. No investor would buy an offshore company.
The biggest problems are the bank accounts. Because normally offshore companies would have bank accounts in banks like the Euro Pacific Bank etc. which means that your customers may get problems and tax audits because transaction to the common offshore banks are flagged. You also have to think about the offshore invoices, because if you get an offshore company in a black/grey/watch listed country your customers may not be able to deduct the invoices from their Tax!
I always suggest the USA, but the bank accounts there would normally be in USD only. However Stripe and Paypal would be able to store multi currencies.
But of course there are also other possibilities then the USA. Just check that your desired offshore jurisdiction is not on this list :

maybe you also want to read this list to see which problems most EU people encounter:

Onshore is the new offshore ... best first step is probably in any case to get a new personal residence in a low/no-tax place ... the business end of it has become less important

The " international introductions business" got my attention ... always on the lookout for good door-openers. Maybe send me a PM with additional details?

Put yourself in the position of a banker which must decide whether to accept you as a client.

Red flag number 1: Offshore company based in a grey/black list country
Red flag number 2: Consulting business

If you filter out the 99% of legitimate bankers that don't want your business because of the red flags, you're left with 1% of the legitimate and 100% of the scams to choose from.

neweraoffshore said:

I always suggest the USA, but the bank accounts there would normally be in USD only.

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Some banks in the US offer EUR accounts as well. Look out for European banks with US branches.

Robroy1 said:

Send me a PM please, as I am new, I cannot yet work out how to initiate a PM!

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Ditto

@Outlander, yes of course there are multi currency banks, however they require more documents and harder verification. The bank I use is one of the US biggest banks and they don't have such strict regulations as the ones which offer other currencies. Because USD is regulated by the FED and therefore has less regulations and EUR is regulated by the ECB and therefore has more regulations which need to be satisfied by the bank.

@Artemis Eleutheria it is not so easy to get a new residency if you still want to live in your regular country. For example me. I have to hand in bills for groceries or hotel stays from the different countries I have been to have my PT status. Most EU countries tax their citizen on their "center of life". If you have a tax free residence but still have your center of life in your regular country then you will encounter serious problems.
@Robroy1 are you willing to move your center of life or do you want to stay in UK? If you don't want to move, then forget the tax free residency. All the people who do this are just pokering that their governments won't notice them still living in their main country...
Quote from Wikipedia: Tax residence - Wikipedia :
"An individual who spends more than 183 days in the UK in a tax year is UK resident.[9] Apart from that, there are no clear statutory guidelines. The question of whether someone is UK resident is a question of fact and degree, to be determined "on all the circumstances of the case. "
You live in the UK, you pay taxes in the UK. It will be very hard, if not even impossible, to have enough prove that your center of life is in Paraguay for example.
All the people who are doing this "Paraguay Thing" right now will have problems in the future...

neweraoffshore said:

You live in the UK, you pay taxes in the UK. It will be very hard, if not even impossible, to have enough prove that your center of life is in Paraguay for example.
All the people who are doing this "Paraguay Thing" right now will have problems in the future...

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The people that are doing this Paraguay thing are not living in their home countries while claiming to have their center of life in Paraguay. That would be really dumb.

However, doing this Paraguay thing while being a permanent traveler, or switching between 2 or 3 locations during the year, is a sound strategy:
1. You can tell your offshore bank that you live in Paraguay and provide official proof
2. You can tell your home country that wants to tax the hell out of you that you live in Paraguay, not in some kind of nomadic limbo which doesn't provide a credible claim for tax residency

And if you want to make it perfect, buy some cheap real estate in Paraguay and rent it out. It's likely to go up in value and you can pay some taxes (10%) in Paraguay for your local income, further strengthening your residency claim.

@Outlander , Paraguy and a PT lifestyle is indeed a very good strategy. But @Robroy1 has to be prepared to not live in the UK for the full year anymore. I don't know if this way of live is convenient for him or most people. We PTs are a special kind of people, you know that Outlander

neweraoffshore said:

@Outlander , Paraguy and a PT lifestyle is indeed a very good strategy. But @Robroy1 has to be prepared to not live in the UK for the full year anymore. I don't know if this way of live is convenient for him or most people. We PTs are a special kind of people, you know that Outlander

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I know, I have been traveling through space and time using ancient stone circles, it doesn't get more special than that.