Belize vs Seychelles for US Citizen

[mandom74]

Hi Everyone. I'm a new user and I've been reading frantically but hopefully I'm not breaking any rules. I wanted to get opinions on which country would be best for my situation in your significantly more educated opinions.

Overview:

I'm a US citizen who qualifies for the FEIE. I do not have residency anywhere and don't intend to for the foreseeable future. I work as a freelance consultant for US based companies and get paid in USD to my personal US bank account. I clear @ $80k/year, which I pay self employment taxes on. I want to create an offshore company which will start receiving my freelance payments and which will then pay them to my personal US bank account as a salary. This will allow me to avoid paying SE taxes. Everything will be declared to the IRS as legit earnings (because it is) so I'm not overly worried about being anon.

My Plan:

At this point I've researched a bunch and it seems like either the Seychelles or Belize is my best option. Ideally I'd be able to get a USD bank account as well, but I realize that that's becoming more difficult as countries lock down their banking, and FACTA doesn't help. As an alternative, I could set up a Transferwise Business account and have my invoices paid to that, and then deposit that money into my personal account. My hope is to have this all set up and running by end of year so 2019 will be a tax free year for me.

My Question:

For the above, which do you think is better, Belize or Seychelles? I want setup and ongoing maintenance to be as easy as possible. If necessary, I could get to Seychelles in the next couple weeks and do the setup in person (business travel expense?). Does anyone have any reputable companies that don't just work with people who are trying to hide potentially questionable activities? Everything I'm doing is legit so I've no need or desire to hide.

Thanks in advance for any help!

 

[happyjohn]

Does anyone have any reputable companies that don't just work with people who are trying to hide potentially questionable activities? Everything I'm doing is legit so I've no need or desire to hide.

why you are here. Ask PwC or Deloitte in your region to help you if you want a legit, clean and professional agent and if you don't have anything to hide!

 

[mandom74]

why you are here. Ask PwC or Deloitte in your region to help you if you want a legit, clean and professional agent and if you don't have anything to hide!

So people are only allowed to ask questions here if they have something to hide? That's pretty dumb. If someone knows how to do it black hat, they know how to do it white hat. I don't need someone like PwC or Deloitte for this. Even if most people here aren't 100% legit, they likely know of services that are.

 

[happyjohn]

Noooo, everyone is allowed to post here.. I just wonder why you want to spend time here if you can go to a local tax advisor or attorney and ask him to help you setup a Seychelles or Belize company. You trust him, you pay him, everything is fine and he has no shady business activity nor is he doing business with people that hide something

 

[fshore]

Did you consider forming a US corporation ? Would be easy to get a US bank account and can still use feie.

 

[mandom74]

Noooo, everyone is allowed to post here.. I just wonder why you want to spend time here if you can go to a local tax advisor or attorney and ask him to help you setup a Seychelles or Belize company. You trust him, you pay him, everything is fine and he has no shady business activity nor is he doing business with people that hide something

My tax guy doesn't do this kind of thing and no one I know has one who does. Trying to weed through the scammers online is a challenge so I thought someone here might have a recommendation.

What about if you save enough money for buying a second passport? With another nacionality things could be easier....or living enough time in a country for getting their nacionality

I will be getting a 2nd passport next year. But that won't solve my problem as I'll have to pay SE taxes to the US regardless unless I'm paying them elsewhere. I'm trying to avoid paying them at all so becoming a tax resident of another country wont' help. Thanks though.

Did you consider forming a US corporation ? Would be easy to get a US bank account and can still use feie.

A US corporation won't help me avoid paying US self employment taxes.

 

[fshore]

A US corporation won't help me avoid paying US self employment taxes.

If you're an employee of a US C corporation you are not self employed.
However maybe the company has to pay other social security taxes? I would look further into that., how it works when hiring a non resident

 

[JohnLocke]

You could try turnerlittle they are advertising here too or you can check my signature!

 

[happyjohn]

I mean that you can use your 2nd passport for opening the offshore company for example in Belize....Because if you do it with you american one a lot of banks will reject you....

But if they find out that he has dual citizenship it will go wrong. My question is, would a bank be able to find out that one has dual citizenship?

 

[LimaDelta]

@happyjohn But if they find out that he has dual citizenship it will go wrong. My question is, would a bank be able to find out that one has dual citizenship?

I heard that when you get a second passport, your place of birth will always show. You will never be able to hide the fact where you where born. The bank will see that and ask to see proof of giving up your US citizenship.....from what I heard.....I would love to hear someone who actually went through this though.

 

[LimaDelta]

@mandom74

You don't need a foreign bank to run that set up. Just get a nromal US bank. But warning, most US banks will still not deal with you because the LLC is owned by a foreign company. Even though you can prove ownership of the foreirn corp. But Bank of America doesn't care, they will take care of you.

Another trick, assuming you got an Wyoming LLC is form the Wyoming LLC FIRST, depending on who your register office is they will send all the documents to you in WORD files. Your personal name will show as owner. File for a bank account at any US bank you want. Easy, any bank and their grandma will accept you. Now form the foreign corp. and all you have to do, according to Wyoming law is edit the WORD file to show your foriegn corp. owns your LLC, no longer you. our US bank will not know the difference.

Depending on your CPA, the cost of doing taxes for you set up will go from $300 per year to over $10,000 for all the legal paperwork. Is it worth it? Second, Trump's tax cut changed the FEIE. Even if you retian earnings over the $100,000 (or whatever the yearly adjustment is) stays in the companies account, you will now be taxed on it. Before Trump's tax cut as long as the money stayed in the account (even if that account was in an American bank on American soil) it was considered foreign earnings and not taxed.

 

[brownham]

You don't need a foreign bank to run that set up. Just get a nromal US bank. But warning, most US banks will still not deal with you because the LLC is owned by a foreign company. Even though you can prove ownership of the foreirn corp. But Bank of America doesn't care, they will take care of you.

how would you go about it?

 

[mandom74]

If you're an employee of a US C corporation you are not self employed.
However maybe the company has to pay other social security taxes? I would look further into that., how it works when hiring a non resident

I'm a freelancer. So I'm not an employee of anyone at this point.

 

[mandom74]

T

You could try turnerlittle they are advertising here too or you can check my signature!

Thanks, will check it out.

 

[mandom74]

I mean that you can use your 2nd passport for opening the offshore company for example in Belize....Because if you do it with you american one a lot of banks will reject you....

Sadly, I won't have my 2nd passport as soon as I want to do this. But, I can use transferwise for everything so no need for a bank account.

 

[mandom74]

@mandom74

Depending on your CPA, the cost of doing taxes for you set up will go from $300 per year to over $10,000 for all the legal paperwork. Is it worth it? Second, Trump's tax cut changed the FEIE. Even if you retian earnings over the $100,000 (or whatever the yearly adjustment is) stays in the companies account, you will now be taxed on it. Before Trump's tax cut as long as the money stayed in the account (even if that account was in an American bank on American soil) it was considered foreign earnings and not taxed.

I've been talking through all of this with my tax guy and he said it would increase a couple hundred for additional forms, but not a huge amount. Sadly, I don't cross the $100k limit so point 2 won't be an issue.

 

[mandom74]

Transferwise sometimes can close your account without any explanation....

So can any bank. I'm already at risk of that because I don't live in the US and just use my mom's address for my mailing address. So my risk factor isn't really increasing IMO.

 

[LimaDelta]

@brownham
What are you referring to? How to set up OP's FEIE plan? Or the bank account specificly? Or, getting an American bank with a foriegn owned Wyoming LLC? Well, the only bank that worked with me was Bank of America. They take everyone.

As far as setting up for FEIE. There are a lot of rules you need to follow and to set it up properly. Too much for me to type out here. There is an American lawyer in Belize who does this for cheap. Although Mandon's CPA said he will do it for a couple hundards bucks extra......be careful. I have a feeling you get what you pay for but I am not an expert.....

For Americans who don't make over $100,000. This still is the best way you can pay 0% tax in America. BUT, you can't step foot in America for more than 30 days out of the year. With a bit of extra rules, you can extend that to 4 months in America.

 

[mandom74]

You don't really have to "set up" the FEIE. You either meet the criteria or you don't. It's not super complicated IMO. I've been doing it for years. But I also have no desire to spend any significant time in the USA so frequently I don't use much/any of my 35 days a year.

 

[brownham]

Transferwise sometimes can close your account without any explanation....

did you tried that? is the money vanished then?