Company taxed at partnership or individual level?

[Superguillus]

Hello everyone,

I'm a freelancer looking to form a company in a country with zero or very low taxes compatible with EMIs and normal banks if I ever need to, so Seychelles, Belize, etc are discarded. BVI looks very interesting, but my clients need the company to be taxed at partnership level and not individual level because of regulations and stuff...

As far as I understand this refers to pass-through companies right? Forming something like a US S Corp in the BVI would not work, but something like a US C Corp would if I understand correctly. Are BVI companies taxed at individual or partnership level?

This forum has been really useful for my research, thanks everyone!

 

[Sols]

Before you spend time and money on this, double check that you are living in a tax haven as this structure is otherwise at ever-increasing risk of collapsing and landing you in hot water with the local tax authority (back taxes, penalties, prison for tax evasion/money laundering).

Generally speaking, only companies formed as Partnerships (most commonly LP, LLP, GP) or Limited Liability Companies (LLC) are taxed as partnerships, meaning the entity itself isn't taxed but its partners/members are taxed on personal income. If the partners/members are non-resident in the country of incorporation, no tax at all applies in that jurisdiction.

In the case of the US, S and C Corps are taxable entities (they pay corporate income tax) and LLCs are pass-through (the members pay personal income tax, but the entity itself pays no tax).

BVI has different types of entities, including partnership-type entities. However, the most common BVI company is a regular company and is taxable, even if that tax in BVI is zero. The entity then has to pay tax wherever it's tax resident (where you live), so whatever your local corporate tax rate is applies. Best to speak with a local tax adviser for exact details.

 

[CaptK]

If your client requires certain criteria then you need to have a solution for both. So your only option is to move to those countries.

I believe UAE is your best option as it kills both the requirements that they have. You will have to move there but at least the tax residency requirements are easy to obtain and as their is no tax at Company and individual level their are no issues on both sides.

 

[Konstanz]

If your client requires certain criteria then you need to have a solution for both. So your only option is to move to those countries.

I believe UAE is your best option as it kills both the requirements that they have. You will have to move there but at least the tax residency requirements are easy to obtain and as their is no tax at Company and individual level their are no issues on both sides.

I can only agree. The only safe way to work with BVI companies, LP structures is to move to Zero tax country like UAE. Most of countries has now CFC and PE rulings, you would end up with criminal prosecution, fines and possible jail time doing that