Canadian LLP - good for privacy?

[triton080]

Hi,
I am continuing a restructuring exercise and the objective is to establish a new hold co which offers privacy and maximum protection from any disclosure of the UBO.
Previously I used Seychelles but I understand in 2020 there is new legislation which means an obligation to lodge the UBO with the FInancial Intelligence Unit.
I do not require banking facilities, only a corporate vehicle to hold other investments in risky emerging markets and offer a layer of asset protection as an offshore parent company.

I have been recomomended a Canadian LLP, which as I understand has no obligations to disclose it's UBO anywhere, or even hold information itseld concerning the UBO.
The downside as I heard, is that it can be 2 months for incorporation, I need something quicker.

Does anyone have experience with a Canadian LLP, or can offer alternative jurisdictions offering protection/maximum privacy for a UBO?

Thanks in advance!

 

[Lisa D]

Hi,
I am continuing a restructuring exercise and the objective is to establish a new hold co which offers privacy and maximum protection from any disclosure of the UBO.
Previously I used Seychelles but I understand in 2020 there is new legislation which means an obligation to lodge the UBO with the FInancial Intelligence Unit.
I do not require banking facilities, only a corporate vehicle to hold other investments in risky emerging markets and offer a layer of asset protection as an offshore parent company.

I have been recomomended a Canadian LLP, which as I understand has no obligations to disclose it's UBO anywhere, or even hold information itseld concerning the UBO.
The downside as I heard, is that it can be 2 months for incorporation, I need something quicker.

Does anyone have experience with a Canadian LLP, or can offer alternative jurisdictions offering protection/maximum privacy for a UBO?

Thanks in advance!

From experience, if you are looking for maximum protection from any disclosure, I will suggest BVI entity with nominee. This scheme allows you to remain anonymous.

 

[uplana]

Elaborate, how should that work?

 

[kranj99]

LP and LLP are slightly different. LP's are available in most provinces, whereas LLP's are generally reserved for certain professions (i.e accounting, law etc.) However the province of BC allows other types of activities for LLP's and therefore can be formed for a large variety of activities.

That said, I think the LP offers decent privacy and in Ontario for example it's quick and cheap to register. The catch: you need to do it in person, if you want quick turnaround times. With Covid travel restrictions, it is not easy to get to Canada these days. But perhaps this may change in July or August if borders re-open. A few years ago I set up an LP in Ontario (at the main Toronto office) and it took about 30 minutes to do so and I think like $350 CAD. Unfortunately LP's cannot be set up online like other company types. So you either need to use an agent or do it in person.

Bank Account with MasterCard debit card was quick and easy to set up too but I hold dual citizenship with Canada even though I am no longer resident there. I did not get the impression that it would be difficult for a foreign national to open an account for the LP, just as long as the account opening is done in person at the branch. My advise would be to do it in a suburban Toronto bank branch where they are used to opening accounts for non-residents/pending immigrants etc.

But if your venture starts generating significant revenues, and gets flagged by the banks compliance, they could report you to the tax authorities of your country of residence. So when it comes to privacy, it could very well be an illusion.

As for the LP and privacy in terms of the so-called UBO register: only the General Partner goes on the public record. Ontario does not keep a list of limited partners. So hypothetically you could set up an LLC in a place like BVI or Belize or similar and you could use that LLC to act as the general partner for the Canadian LP. This offshore LLC will be what goes on the public record.

But when doing it like this, at least in Ontario (and likely the same elsewhere in Canada) you would need to register this LLC as an EPC (Extra-Provincial Company) in order for it to then be the General Partner in your LP. It would be at this EPC declaration stage where you may appear on the public record - again it depends on how you structure yourself.

Technically you're supposed to have an office and in that office you're supposed to keep records such as the list of limited partners etc. But I'd wager that if your activities are small and discrete, the Ontario authorities won't go around checking and you can probably just get away with a letter-box address.

That aside there are no Canadian reporting requirements on the LP - as it is generally a Pass-Through entity like US LLC's. But there are annual filing requirements on your offshore LLC if you set it up as an EPC.

 

[triton080]

kranj99 thanks for this, very helpful.
So as I understand an LP can be suitable for my needs, and also quicker and cheaper.
My provider can also provide a General Partner which should also keep things private and not need the hassle of an EPC.