Advice on setups to hide income

[romario]

Hello,
I'm new to all of this, and this forum has been of much interest to me, It seems like a great resource for like minded people.

So I've been doing research on how to keep my main income under the radar with the local tax authorities in my country of residence (Iceland). I'm currently spinning in circles and scratching my head thinking about how to go about doing this, if it's even viable at all. Ideally I'm trying to figure out a simple setup, but I'm willing to go to almost any length for an arrangement that works, minus spending the majority of the year somewhere else (because of my kids). I've talked to a tax lawyer in town that advised getting a non domicile status in the UK and bill through a Canadian company to a bank in Cyprus. (this means staying in the UK for long times and I wish to avoid that if possible). Iv'e also talked to other online law consultancies based in Panama and Belize but I didn't really trust the info from them, seemed "to easy" and yes men we'll take your money to me.

My situation:

1. I currently live in Iceland, I have kids and I need to stay in here as much as I can for they're sake over the next 5ish years (else I would't recite here).
2. I'm a designer and work for a US company that will pay me as a contractor (130k per year)
3. I'm being asked to set up a business/ structure to receive the payments (I was an employee before)
4. I will have other legit income in Iceland that is on paper if that matters at all (maybe helps keep the red flags down?)

My research so far:

1. I've looked for offshore setups that hide these US payments from local tax authorities. Is this possible, can I create a web? are there places with mechanism that make this possible?
2. I've looked into being taxed elsewhere, like get a Panama, Portugal NHR, UK non-dom or Cyprus residency. (I can't be away too much, I could only do 3 ish months per year away)
3. How to make a bank account "anonymous" and if I could still use it to pay for things with a card. And ways to access the money. Fly in withdraw cash fly back?
4. Are there any high quality professionals that can help / do a 0% tax setup for you or create anonymous company and bank structure for you?
5. Are there any trustworthy companies that can front you as an identity and give you a bank account for an annual or monthly fee?

My least favorite option is to have the business legal and on paper here and play the write-off game to just lower my taxes a bit... My most ideal option is to have this income hidden completely from my name.
I would really appreciate the input here on what can be done in my situation. And if people here know any good and trustworthy legal/tax consultancies that do good work for people when it comes to this.

Thank you so much!

 

[Sols]

Sorry, you're about a few years too late (although it was iffy even back then). With FATCA, CRS/AEOI, EU/EEA information sharing, data leaks (including governments buying data from corrupt bank employees/corrupt CSPs), and other efforts to ensure transparency, tax evasion for your income level isn't feasible anymore. The risks of getting caught are much, much higher now. And the costs of setting up and maintaining will eat up a significant part of your income (probably close to what taxes will be) and delay the speed at which you can pay yourself. You can forget about instant access to the funds.

You have kids. Are you sure you want to risk prison time for tax evasion (from not paying tax) and money laundering (from hiding the money)? What's paying taxes compared to seeing your family whenever you want and not only during prison visit hours?

Do it properly and move to a territory whose tax laws you find more favorable. As an Icelandic citizen, you have Malta, Portugal, Ireland, and Cyprus easily within reach. If that isn't an option right now, wait until your kids are older and then do it. In the meantime, Icelandic law applies to you.

But sure, you can do what you want. It's not impossible. And you might even get away with it for one or two years, maybe three. But for each passing year, the severity of your crimes go up. Accidental tax evasion one year is something you can get a slap on the wrist for and maybe some penalties. Intentional, well-planned, and internationally structured tax evasion becomes money laundering, and that's how we get to talking about prison time.

 

[romario]

Sorry, you're about a few years too late (although it was iffy even back then). With FATCA, CRS/AEOI, EU/EEA information sharing, data leaks (including governments buying data from corrupt bank employees/corrupt CSPs), and other efforts to ensure transparency, tax evasion for your income level isn't feasible anymore. The risks of getting caught are much, much higher now. And the costs of setting up and maintaining will eat up a significant part of your income (probably close to what taxes will be) and delay the speed at which you can pay yourself. You can forget about instant access to the funds.

You have kids. Are you sure you want to risk prison time for tax evasion (from not paying tax) and money laundering (from hiding the money)? What's paying taxes compared to seeing your family whenever you want and not only during prison visit hours?

Do it properly and move to a territory whose tax laws you find more favorable. As an Icelandic citizen, you have Malta, Portugal, Ireland, and Cyprus easily within reach. If that isn't an option right now, wait until your kids are older and then do it. In the meantime, Icelandic law applies to you.

But sure, you can do what you want. It's not impossible. And you might even get away with it for one or two years, maybe three. But for each passing year, the severity of your crimes go up. Accidental tax evasion one year is something you can get a slap on the wrist for and maybe some penalties. Intentional, well-planned, and internationally structured tax evasion becomes money laundering, and that's how we get to talking about prison time.

Thank you for writing me back. It's not good news but I appreciate your honest feedback!

Question: So let's say I want to go for it for one year. What ways would be best and fairly cost effective for me? I'm talking to a law firm in Panama regarding getting in on the friendly nations deal before the 18th. Could I somehow create a "confusion" with that and not pay tax for a year or two without it looking like a malicious tax fraud scheme artist? maybe stay there 3 months out of the year, have my business and banking there (so if I where to get caught it will just be a little silly mistake slap)

Question: I go legit and take my income in here and play the standard write-off game. Could I still create a consultancy or a creative services company offshore and do semi infrequent business with my own anonymous company somewhere else? Is something like that possible?

Thank you so much for your time and patience

 

[Sols]

Question: So let's say I want to go for it for one year. What ways would be best and fairly cost effective for me? I'm talking to a law firm in Panama regarding getting in on the friendly nations deal before the 18th. Could I somehow create a "confusion" with that and not pay tax for a year or two without it looking like a malicious tax fraud scheme artist? maybe stay there 3 months out of the year, have my business and banking there (so if I where to get caught it will just be a little silly mistake slap)

You can firm anonymous companies all day. That part is still quite easy. And governments know that so they started going after banks instead and get them to release information. Read up on CRS (Common Reporting Standard) and AEOI (Automatic Exchange of Information).

You can use this tool to see which countries report to Iceland under CRS: Exchange relationships - Organisation for Economic Co-operation and Development Any bank account you hold in a country listed there becomes automatically known to Icelandic authorities — whether they act on it right away or simply keep it on file and come back to it in a few years when they have more resources.

You can try to get around CRS by claiming tax residence somewhere else, but if your ties to Iceland are strong enough, multijurisdictional reporting is a risk you'll have to be wary of, whereby the information about your bank goes both to your claimed home country and to Iceland.

Another risk you might want to keep in mind is how your business counterparts will feel about getting an invoice from a company incorporated in a dodgy jurisdiction with payment going to a bank in another dodgy jurisdiction. Depending on how and with whom you work, that can be a showstopper. I see it more and more, especially with large businesses, simply refusing to work with offshore companies because it creates a risk for them.

Question: I go legit and take my income in here and play the standard write-off game. Could I still create a consultancy or a creative services company offshore and do semi infrequent business with my own anonymous company somewhere else? Is something like that possible?

As mentioned, you can set up all the anonymous companies you want.

They just have to be 100% compliant with Icelandic law, which means paying Icelandic corporate tax. As an Icelandic resident, any company that you control from Iceland becomes an Icelandic tax resident.

 

[newNomad]

Why overcomplicate and don't just suggest the guy an EMI which does not do CRS?

Perhaps CRS for business entities has some advanatges over CRS for natural persons?

 

[Sols]

Why overcomplicate and don't just suggest the guy an EMI which does not do CRS?

EMIs are primarily an EU/EEA concept, although there are EMI-like legislations elsewhere.

EMIs are subject to CRS, whether they are complying today or will begin to in the future.

If you're relying on EMI for secrecy, you probably have some very uncomfortable conversations with your local tax authority coming in the future.

Perhaps CRS for business entities has some advanatges over CRS for natural persons?

No, reporting is based on the directors, shareholders, and UBO.

 

[newNomad]

If you're relying on EMI for secrecy, you probably have some very uncomfortable conversations with your local tax authority coming in the future.

I like this part But why are EMIs seen nowadays so "anti-secrecy", it seems to an extent even bigger than traditional banks? Weren't they supposed to be out of scope of definition of traditional "FIs"?
Judging by the number of EMIs popping, hundreds, what's the use for all of them then..? Why would anyone open an EMI?

 

[Sols]

But why are EMIs seen nowadays so "anti-secrecy", it seems to an extent even bigger than traditional banks? Weren't they supposed to be out of scope of definition of traditional "FIs"?

They are/were briefly out of scope because they were small and insignificant, but now they attract a lot of money, especially from high-risk companies and offshore jurisdictions.

You can still quite easily open an EMI account for an small offshore company, while there are nearly no banks left in EU/EEA that do it.

Judging by the number of EMIs popping, hundreds, what's the use for all of them then..? Why would anyone open an EMI?

For a lot of people, opening an account with a regular bank is impossible or very difficult. That's when an EMI can be useful. Some EMIs are also able to offer better services and fees than local banks.

But in a few years, most EMIs today will no longer be around. Some will survive because they found certain niches and solve specific problems but EMIs that only try to replace retail banks by offering an IBAN and a prepaid card will face a difficult future. The model is not financially viable in the long run.

 

[romario]

Thank you all for the input here I'm soaking it in. So this might be a dumb question as I dont really realize how FATCA and US taxes work, but what if... I set up anonymous company in Panama that owns a Wyoming or an Idaho LLC and then bill the US client from the Panama co but use the US LLC bank account to receive funds.... Will I then a. get reported somehow? b. need to pay tax in the US, as this is business within the US?

 

[Marzio]

Maybe the setup offered by @neweraoffshore could help you minimize your taxes without moving. I never used his services so i can’t say say if what he offers works.

 

[Sols]

Thank you all for the input here I'm soaking it in. So this might be a dumb question as I dont really realize how FATCA and US taxes work, but what if... I set up anonymous company in Panama that owns a Wyoming or an Idaho LLC and then bill the US client from the Panama co but use the US LLC bank account to receive funds.... Will I then a. get reported somehow? b. need to pay tax in the US, as this is business within the US?

The company in Panama is not anonymous. There is no such thing, other than a poor translation of "Sociedad Anónima" to "anonymous company" when in reality it's more akin to "private company". The UBO of the Panamanian company is known or knowable, and information can be obtained. It's not as easy as elsewhere but it is doable, so the company isn't anonymous.

The bank account in the US is reportable under FATCA, whereby US would notify Iceland about the company. The US has a history of being bad at reciprocating such reporting but have improved lately. We've even had a few examples from users on this forum having US accounts reported back home.

So it's far from ironclad, but might work for a while, until Icelandic authorities catch up on data received or received data in the future.

In terms of taxes, you might be create a taxable event in the US. The Panama—US invoice itself would normally not be taxable in the US but by having the funds received in the US by a subsidiary US company it might. There is a lot of vagueness in US tax code here and you'd be wise to speak with an attorney.

 

[Meta]

Hello!

My most ideal option is to have this income hidden completely from my name.

Maybe you can ask the company you work for to pay you in Bitcoin? Directly or via some cryptomerchant (that would invoice them and send coins to you). Then you would easily change Bitcoin to cash anonymously. I don't know why you would want all your income in cash hidden from your name, but cryptocurrency seems as the obvious way to go. Cheers.

 

[uplana]

OMG - sorry to say so the entire thread belongs inside mentor group gold. Rest assured, you will not find any valid solution here!

 

[romario]

Hello!


Maybe you can ask the company you work for to pay you in Bitcoin? Directly or via some cryptomerchant (that would invoice them and send coins to you). Then you would easily change Bitcoin to cash anonymously. I don't know why you would want all your income in cash hidden from your name, but cryptocurrency seems as the obvious way to go. Cheers.

Its not my entire income, This is just a foreign client I have that I would prefer to not pay a total of 60% taxes and fees on (yes its almost that high). I do have other income legit taxed on paper where I reside. I'm seeking way's too keep this income all for myself and use it for investments and/or build up some sort of rainy day or retirement capital... end of the day I'm just sick and tired of the brutal tax burden here, to me its not fair towards those of us who work really hard.

 

[James2774]

Have you reflected on if it worth it?
Going an anonymous route and putting g yourself at great risk, to save how much?
Would you be better off spending the time/effort/money on growing your business to offset taxes?
I understand taking some cash on the side to pay for things, or parking money offshore to access when you retire in a tax free jurisdiction, but if we are talking large amounts here what’s the point of the anonymous money when you can’t spend it?

remember after you have avoided govts prying eyes to get the cash, you now need to spend it without them watching you.
It’s one thing for to get the cash and then another to access/use it.

 

[Sols]

end of the day I'm just sick and tired of the brutal tax burden here, to me its not fair towards those of us who work really hard.

If you don't want to comply with Icelandic law, don't live in Iceland. It's really that simple.

Or get politically active and turn Iceland into a tax haven.

 

[romario]

Or get politically active and turn Iceland into a tax haven.

Let's do this!!!

It would take some sort of world war 3 complete culture reset to change this over here. The Icelandic people and the culture here is so proud and happy to be a part of the "Scandinavian social welfare model" where we all pay half our salaries (and more) our whoooole working life to support people on benefits, people who have kids, single moms, unemployed people, program this, program that, etc.

Education, healthcare, makes sense to pay into, although personally I don't think it should be fully carried by the taxpayer. But to each is own. In my opinion 15-25% individual income tax is fair, or at least have a reasonable, fair roof on how much an individual needs to contribute to society before his share is considered covered.

Smart people that work hard are really being punished the way things are today. It sort of kills incentive to know that the more effort you put in and the more hustle you do the more you have to give away. At least I strongly feel like that.

What a rant
I would move if I could... Kids... Life... Shoot me!

 

[newNomad]

Let's do this!!!

It would take some sort of world war 3 complete culture reset to change this over here. The Icelandic people and the culture here is so proud and happy to be a part of the "Scandinavian social welfare model" where we all pay half our salaries (and more) our whoooole working life to support people on benefits, people who have kids, single moms, unemployed people, program this, program that, etc.

Education, healthcare, makes sense to pay into, although personally I don't think it should be fully carried by the taxpayer. But to each is own. In my opinion 15-25% individual income tax is fair, or at least have a reasonable, fair roof on how much an individual needs to contribute to society before his share is considered covered.

Smart people that work hard are really being punished the way things are today. It sort of kills incentive to know that the more effort you put in and the more hustle you do the more you have to give away. At least I strongly feel like that.

What a rant
I would move if I could... Kids... Life... Shoot me!

Another way is just stop wasting time working altogehther and start enjoying life...collect the social welfare check and maybe travel and live in some tropical tax haven while at the same time collecting Icelandic social aid Incentives are all alligned

 

[uplana]

I would move if I could... Kids... Life... Shoot me!

the life story for 90% of people around here!

 

[JustAnotherNomad]

You can create any company you like, but what good is a company without a bank account?
The banks need to know who's behind the account. And if you tell them you live in Iceland, the Icelandic authorities will be notified about the account.
If you lie to the bank and tell them you live somewhere else, they probably won't share the information with Iceland... until they do, for some reason, for example because they suspect you lied to them. Or because the reporting rules have changed.
I guess I don't have to tell you that lying to a bank or providing forged documents is a crime. So don't do it.