business/bank (ownership hidden from public) for subscription product

user9823671

Building Trust
Entrepreneur
Hi, been a while since been on this forum and haven't kept up with latest happenings in offshore / privacy issues, so thought I would create a thread rather than wade through the 100s of other similar threads (sorry about that).

Am starting a new business that is legal, but does involve breaking website TOS.
I want to keep my name out of the public record (so no each public look up) but am not trying to hide from governments

I am a non resident EU citizen been living abroad (non-eu / non US) for 10 years where I have citizenship of a 3rd world country (south american). So anything could be signed up with either valid documents.

Obviously would like to pay as low as tax (if any) as possible, but am not interested in illegally doing so (darks / not declaring / hoping I don't get found out)

The new business is going to be subscription based, so paypal would be useful (but from what I can tell for privacy business that is now tricky / not possible). Am open to any payment options that allow subscriptions. processors such as 2cho / paypal / similar / highrisk cc processors.

Another thing, ideally would like to keep things out of the US, as the US has shown a tendency in recent times to consider website TOS legally binding with prosecutions under hacking laws, whereas other areas (EU) do not
 

darkster

Trusted Member
Business Angel
Mentor Group
Commercial Service
There are only a limited option if you speak tax free business operation. Either Cyprus or Hong Kong, both can be setup to be tax neutral and you can setup a bank account in Cyprus for the business or an EMI as you like and can be approved.

Don't forget to appoint nominees to the setup for max privacy.
 

blizz

Trusted Member
Business Angel
Mentor Group
Seychelles and Belize both hide your identity everywhere public. If you appoint nominees you get the same in Cyprus and Hong Kong for instant!

Alternative is the very discussed Georgia which I so far have no experience with!
 

hungryit

Building Trust
Entrepreneur
As mentioned here Seychelles, Belize and St. Kitts will hide your identity by default. Hong Kong, Cyprus and similar places will require nominee director and shareholder to hide your identity.
 

OffCap

Building Trust
Entrepreneur
Generally, Seychelles, Belize, etc. are no longer great options because they pose lots of banking problems. Even if you can get an account today you run the risk of it getting flagged in the future so why would you want to deal with that?

Nominees are similarly causing more and more issues with banks so where possible it's nice not to have them involved.

You could look at Georgia, one of the company types there doesn't disclose the shareholders, which makes it more interesting and costs of having a real company there (adding one or two staff) is extremely low.

If you're looking at nominees then sure HK, Gibraltar, etc. are all options.

One question though is why worry about your name being on the public records if you're in a SA country? It would be extremely difficult to go after you.
 

Admin

Forum Moderator
Staff member
Generally, Seychelles, Belize, etc. are no longer great options because they pose lots of banking problems. Even if you can get an account today you run the risk of it getting flagged in the future so why would you want to deal with that?
This is exactly what you risk with almost any offshore company. The world is shutting down for offshore corps and banking it requires a lot more today to keep your setups.

It's not different with Georgia, what works today there will not work tomorrow or in the near future, if someone believe governments to be stupid then you make a big mistake.
 

OffCap

Building Trust
Entrepreneur
This is exactly what you risk with almost any offshore company. The world is shutting down for offshore corps and banking it requires a lot more today to keep your setups.

It's not different with Georgia, what works today there will not work tomorrow or in the near future, if someone believe governments to be stupid then you make a big mistake.
Very true, they are trying to make it as expensive to operate offshore as paying your taxes onshore so you'll just stick to onshore.

You need to anticipate these changes and build something that's sustainable so your energy is focused on building your business not trying to maintain and rebuild a dying offshore set up, which is why I highly advocate choosing strategic places to build substance these days.
 

user9823671

Building Trust
Entrepreneur
Generally, Seychelles, Belize, etc. are no longer great options because they pose lots of banking problems. Even if you can get an account today you run the risk of it getting flagged in the future so why would you want to deal with that?
From what I can tell, they are just not options. I would not be able to accept paypal payments, join up with a payment processor such as 2cho / paddle with a true seychelles / belize type company. Even going with a belize merchant bank is going to be difficult for subscription charges, as US / EU banks will refuse the payment and is hassle after hassle like you say.


One question though is why worry about your name being on the public records if you're in a SA country? It would be extremely difficult to go after you.
Because the product does allow users to break the TOS of some websites and these websites have large legal departments. As you say, being in SA is not a problem, but I do visit my EU home country, where it could be more problematic.
 

darkster

Trusted Member
Business Angel
Mentor Group
Commercial Service
What's your conclusion or intention in matters of setting up a company with payment processing?
 

blueweb

Corporate Services
Business Angel
Mentor Group
Because the product does allow users to break the TOS of some websites and these websites have large legal departments. As you say, being in SA is not a problem, but I do visit my EU home country, where it could be more problematic.
you are still resident of your home country? have you informed your home country that you are not living there any longer?
 

user9823671

Building Trust
Entrepreneur
What's your conclusion or intention in matters of setting up a company with payment processing?
Still looking into it. Had some things come up and the project was delayed. Cyprus looked a promising option as did Curacao, although information is limited on that with what is required to setup a presence in the country



you are still resident of your home country? have you informed your home country that you are not living there any longer?
Yes, I am officially a non-resident citizen.
 

xzars

Trusted Member
Business Angel
A random 0 tax jurisdiction will not work. What is your country of residence? Then we can check DTA's and CFC rules to see if any (legal) 0 or low tax solutions even exist.
 

netmillions

New Member
What's the problem with Hong Kong under nominees? If your goal is asset protection, it can also be owned by an offshore trust. There are strategies to setup a trust in a way where the assets within are protected even if you or the corporation is sued.
 

user9823671

Building Trust
Entrepreneur
Thought I'd replied to this post already :-s


A random 0 tax jurisdiction will not work. What is your country of residence? Then we can check DTA's and CFC rules to see if any (legal) 0 or low tax solutions even exist.
Resident of Ecuador, originally from UK. No CFC laws.

Currently, just run the business (software) from personal paypal account. Then transfer from paypal to uk personal account then transfer here. Been meaning to sort it out for years, just never get round to it.
 

xzars

Trusted Member
Business Angel
Thought I'd replied to this post already :-s

Resident of Ecuador, originally from UK. No CFC laws.

Currently, just run the business (software) from personal paypal account. Then transfer from paypal to uk personal account then transfer here. Been meaning to sort it out for years, just never get round to it.
Ecuador does let you operate an offshore company but they want proof of tax paid overseas, otherwise they will apply their own rates.

Imho, the best for Ecuador residents in 2019 is Montserrat @ 1.75% corp tax rate (an election to get taxed must be made when incorporating). Get nominees to hide your name from the public.

With classic offshore jurisdictions you can operate at 0% tax but repatriating profits to Ecuador will be significantly more expensive. As far as Ecuador rules go, if you paid even 1% tax overseas, you're off the hook and no local taxes will apply. If you paid no tax, they will apply their own rates which are quite nasty. In that regard, UAE, HK, BVI, Cayman Islands etc. will not be as advantageous for Ecuadorians.
 

user9823671

Building Trust
Entrepreneur
Ecuador does let you operate an offshore company but they want proof of tax paid overseas, otherwise they will apply their own rates.

Imho, the best for Ecuador residents in 2019 is Montserrat @ 1.75% corp tax rate (an election to get taxed must be made when incorporating). Get nominees to hide your name from the public.

With classic offshore jurisdictions you can operate at 0% tax but repatriating profits to Ecuador will be significantly more expensive. As far as Ecuador rules go, if you paid even 1% tax overseas, you're off the hook and no local taxes will apply. If you paid no tax, they will apply their own rates which are quite nasty. In that regard, UAE, HK, BVI, Cayman Islands etc. will not be as advantageous for Ecuadorians.
Interesting.

Do offshore companies report to Ecuador? I wouldn't have thought Ecuador has much clout worldwide.

you can operate at 0% tax but repatriating profits to Ecuador will be significantly more expensive.
Unless move it to UK first as non-resident, then move to ecuador. As from what I understand, any foreign capital can be brought into the country tax free. But I guess this falls into evasion / illegal territory but with next to 0% chance of detection due to lack of agreements with UK, I guess they don't know it is not from savings?

But for the sake of 1.75% and peace of mind, it is a very small price to pay and worth looking into. What is the banking situation like with a Montserrat company? Same issues as with 0% tax havens? Or slightly better?
 

xzars

Trusted Member
Business Angel
I guess they don't know it is not from savings?
Nope, they cannot distinguish between your pre-residency savings and offshore business income. But are you sure you did not have an obligation to declare your offshore assets, bank checking and savings accounts in prior tax years? You might get ambushed for non-disclosure of offshore assets if you claim your business income as per-residency savings they never assumed you had.

Slowly draining those offshore funds via debit cards should not be an issue, but I'd be very careful about bringing in 6-figure sums to Ecuador as pre-residency savings if I were you.

What is the banking situation like with a Montserrat company? Same issues as with 0% tax havens? Or slightly better?
Slightly better, because there's tax.

BGL in Luxembourg (Owned by BNP Paribas) is one of the best banking options. Montserrat is gaining traction in EU because it qualifies for most EU participation exemption regimes, most notably, The Netherlands'.

If you contact BGL via E-mail or phone, expect typical crap replies - "we don't work with offshore/non-resident/non-luxembourgish"; "we don't share this kind of information due to internal policy, bla bla bla...". You have to go in person to hear anything useful in regards to account opening. Having an EU VAT number should do the trick, even if EU sales are a tiny percentage of your turnover.

More popular options are CIM in Switzerland, or Wirecardbank in Germany. Both will give you an account opening answer via E-mail. Once you have the EU VAT number and a bit of turnover, as well as the ability to demonstrate your business transactions in a greater detail, "upgrade" to BGL and keep CIM or Wirecard as your secondary account. If you have let's say 3M annual turnover, it's better to push the flows through 2 different banks, 1.5M each. I can't emphasize how important it is to mitigate bank-initiated AML bullshit and account freeze risk. Even if one bank is not as good as the other, it pays to not throw away the inferior option. You never know when your account manager is feeling a little communist.
 

user9823671

Building Trust
Entrepreneur
But are you sure you did not have an obligation to declare your offshore assets, bank checking and savings accounts in prior tax years? You might get ambushed for non-disclosure of offshore assets if you claim your business income as per-residency savings they never assumed you had.
No idea if there was an obligation too, but I didn't. But I don't think there is. There has been a big push to get retirees to move here in the last 10 years. Get them to bring over their lifesavings and then have them spend it in the local economy. Never heard anyone mention an obligation to show proof of savings.

but I'd be very careful about bringing in 6-figure sums to Ecuador as pre-residency savings if I were you.
Already have. £20k at a time (maximum can send from UK bank without having to send a fax (lol) to confirm it. Would have sent more but getting access to a fax proved impossible. Just transfer it to the wife's bank account (I don't have one here).

If you have let's say 3M annual turnover
Might need to scale those expectations down. Turn over / profit (business is basically 0 cost so is all profit) is about $150k at the moment. Aiming to double that with an end of year relaunch. But unlikely the business has more potential than that.

Would CIM / BGL, bother looking at a business like that?

Tbh am not even sure if I need a proper bank account. Only need to pay for a couple of servers and domain names and a few resources. Probably <$1000 a year. Then something to receive funds from a payment processor who would handle purchase / subscriptions (paypal / cards / and any other that different countries use). Then pay myself to my personal account and use that to transfer here.
 

xzars

Trusted Member
Business Angel
@user9823671

"Would CIM / BGL, bother looking at a business like that?"
CIM does not mind a small turnover but BGL will likely not show any interest in early-stage oneman'ers with no employees.

"Tbh am not even sure if I need a proper bank account"
If you had a consulting business with a handful of clients, you could opt for a payroll management (umbrella) company that would handle the invoicing and compliance for you, and you could cash in directly to your personal account. But it's not the kind of business you have.

With an online business that requires card payment facilities, I wouldn't count on finding someone willing to accept payments on behalf your company and then placing the funds on your personal account. Technically, it's a simple task, but the laws and regulations make it next to impossible. For your safety, take any offers that allow this as scam. Maybe you could consider an all-in-one digital bank (EMI) that issues a virtual IBAN and offers facilities to accept card payments. There's a big EMI thread on this forum HERE. Pay close attention to supported jurisdictions before you pick a jurisdiction to incorporate.

"There has been a big push to get retirees to move here in the last 10 years. Get them to bring over their lifesavings and then have them spend it in the local economy"
Yes, I've heard that.

But is dollarization of the economy in Ecuador a higher priority over tax laws enforcement? You're in the mindset of "wishful thinking". If the priorities were in your favor, they would implement a territorial tax system that Panama uses, and flood the country with USD notes way faster.

"Already have. £20k at a time (maximum can send from UK bank without having to send a fax (lol) to confirm it..."
LOL. This sounds like a solution! If the taxman asks you about the origins of funds, just say that you could not transfer all savings when you re-located 10 years ago. Those nasty Brits are hateful towards those who already moved on from Windows 95 and the fax machine.
 

user9823671

Building Trust
Entrepreneur
You're in the mindset of "wishful thinking"
and ignorance to be honest.

everything seems so simple at first, then the more you look into it, the more complicated it gets then it all gets left until "next year" and 10 years pass.
 

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