CRS and offshore company bank account reporting

[cryptoland]

Hi,
I've been trying to figure out the correct answer to this question but I'm still confused and I hope someone with real experience with offshore companies could enlighten me:

I'm opening a offshore company with an off shore bank account. At the moment I'm planing of using a combination of business accounts from TransferWise and LeuPay. Now, the answer that I'm looking for is how reporting works for these accounts. I will be the one opening the business bank accounts, but the owner of the money in the accounts is the company.

Will TW, LeuPay or any other offshore bank for that matter will report the financial situation of my business bank account? If there's a sum of money in the bank account at the end of the year, me - as a personal entity - do I own any taxes for the company's money?

I met with a lawyer who said that I shouldn't worry about reporting for business bank accounts. Another lawyer told me that's not possible, I will be reported either way. The money that sits in the company's account at the end of the year I should withdraw and therefore pay taxes for them.

I called 2 different agents from my country that incorporate offshore business, they both said for the money that sits in the company's accounts I don't have to pay any taxes. That's what makes sense for me as well.

I don't even plan to hold any money in the bank account anyway, I will mostly re-invest it so no money should just sit in the bank account.

TL;DR
I'm from Romania and I want to open an offshore company in St. Vincent using TransferWise and LeuPay to transfer the money. Do I have to pay taxes in the country of my residency for the money that sits in the company's bank account?

Thank you.

 

[Suzy Emerald]

Why dont you go onshore and use the micro company regime and 3% tax rules in your home country?

 

[cryptoland]

3% sounds nice but you also have to pay 5% for dividends plus the mandatory social security & health insurance, plus accountant

 

[Suzy Emerald]

correct, 3% (or 1% if you have employees) plus 5%. Doubt: the social security & health insurance applies only for Romanian residents, right?

If I am not mistaken Romania will tax you on worldwide income if you are a resident so going offshore wont help you that much. Nowawadays the new offshore maybe going onshore.

 

[cryptoland]

I believe social security & health insurance is for Romanian residents only. It would make sense that way.
So what you are saying is that in a country that taxes on worldwide income if that income is not declared but having it reinvested/stored in a business account EMI will still be reported?

 

[Suzy Emerald]

if your country taxes on worldwide income for its residents, then everything you earn anywhere would be subject to income tax in Romania. Going offshore wouldnt change that since you are still a resident in Romania and are conducting your business from Romania. Note this is how it would work in theory... If you have an offshore bank that doesnt report under CRS, you wont get reported. I am not sure if EMIs dont report, many contradictory answers here, you can find them on the forum. It is very well possible that if you get reported, your home country doesnt do anything (yet) with the info because of not having the capacity to go after each and everyone. They may prefer to go after the big fishes. So nowadays with all the CRS and AOEI getting place it may be a better and safer option just to pay some tax. If you have low to no costs, the micro company regime sounds not that bad.

 

[Suzy Emerald]

Opening an offshore company in Belize, Seychelles etc is the easy part. It will get difficult getting a bank account. Even EMI's may in the near future close accounts for corps from these jurisdictions. Check the reputation of the financial institutions that accept your offshore jurisdiction. Better pay 8% tax than see your money vanished overnight.