Best spot for formation as Canadian resident

[ihagatcan]

I'm looking to register a business outside of Canada for a lower corporate tax rate than what it is currently. I'm fully aware I'll need to pay tax at a personal level when I bring it back into the country which I'm fine with but I'm definitely tired of the double-taxation. I deeply enjoy privacy of the corporate registry (in Canada, all your information including address is public) so I'm looking for somewhere that offers a bit more director/shareholder privacy.

Ultimately, the company is a custom software development company and right now I also do forex investment of spare funds via the existing (Canadian) company. In the next 6 months I'm not looking to move outside of Canada but in 2024 I do intend to look for a new country.

My "baseline" requirements would be:

* Low corporate tax rate
* Ease of banking -- within reason, I understand offshore entities (excl US LLC's) are more difficult to obtain banking for but not impossible
* Access to PayPal (at least) and preferably Stripe or another card-merchant is preferred
* No insane wire transfer holds from merchants
* I'm not opposed to directors information being known to the government or banking institutions, I'm opposed to it being known to the general public

All this said, what would be the best route for me to take? I've looked at the Cayman Enterprise City stuff but it's rather costly ($15K/yr + $6K registration) right off the bat and sure it does grant 5yr renewable visa but it's not a place I ever see myself wanting to live for a few different reasons.

 

[Sols]

For starters, any foreign company you form is Canadian tax purposes, unless it's genuinely a foreign company with office, operations, and management outside of Canada and your role is that of just a passive shareholder. So be careful setting something up until you have actually found a place you want to relocate to. It sounds like you're too early in your planning phase to incorporate, unless you're ready to handle the hassle of declaring a foreign company as tax resident in Canada.

Pick an attractive place to go live and form a company there. Much easier than bothering with non-resident/offshore companies. PayPal and processors like Stripe rarely go hand in hand with secretive offshore companies. If you are a genuine resident of the Caymans, you have options. If you are a non-resident, it's much harder.

Unfortunately, if Cayman Islands isn't a good fit, I'm not sure you have a lot of options that meet the privacy expectations. You can always appoint nominee directors (and shareholders) and live in a place without public UBO register (Switzerland, Luxembourg, Cyprus, Malta, Singapore, Hong Kong, Costa Rica, Panama).

 

[ihagatcan]

Thanks for your response, I'm not opposed to using a nominee if required -- if I went with a nominee what would you recommend?

 

[Onassis]

Thanks for your response, I'm not opposed to using a nominee if required -- if I went with a nominee what would you recommend?

Using a nominee won't change a thing, the CRA will look right through it.

Cyprus would be the perfect solution for you considering you are into forex trading and software development. I'm not familiar with the companies law in Cyprus but you could incorporate the software business in Guernsey or Jersey instead as this would allow you to freely take out profits, all while potentially benefiting from the IP Box regime.

 

[Sols]

Thanks for your response, I'm not opposed to using a nominee if required -- if I went with a nominee what would you recommend?

To be clear, nominee would only help to remove your name from public registry of directors and shareholders. It likely would not be of any tax benefit. So it would be a relatively late decision, when you've already decided to move. If you for example decide that Malta or Cyprus is where you want to go, you would set up a structure there and appoint nominee directors/shareholders if you don't want your own name appearing in public record.