Do you know the offshore accounting scam?

Discussion in 'Business Discussion' started by dotbloup, Jul 3, 2016.

  1. dotbloup

    dotbloup Offshore Agent Entrepreneur BANNED MEMBER

    This is something i have seen in Estonia, Bulgaria, Montenegro, Hong Kong. It is something that can be found central & east Europe. I don't know about the rest of the world.

    Here is how it works, first, a formation company attracts with cheap prices. Then, they suggest accounting services without being very precise. Then they ask you to output all your accounting to their system. Then, they charge you depending on the number of transactions and it ends up with very high accounting billing.

    I have calculated that one accountant from Estonia was twice more expensive than in the UK and here i talk only about accounting because then there is VAT and EU VAT moss. Also, they may take advantage of your ignorance about the local legislation and make you believe all sorts of things. I have heard a guy from Hong Kong saying that the tax authority from Hong Kong could ask you where you declared your dividend which is totally B_ _ _ _ _ _ _ _
    They tell you that if you don't follow their tax advice you will be prosecuted. Interestingly enough, it is exactly the opposite that happens in reality.

    fyi, a tax authority only takes care of what's happen in her own jurisdiction.

    Many accounting companies are extremely vague on purpose on charging money for accounting. Then, it acts like a mafia & you have to obey. In some jurisdictions there are less practices like that. I have never seen this scam in Cyprus or in Belize which is surprising.
  2. auric

    auric Offshore Agent Mentor Group Sponsor Business Angel

    Well I have seen this with a few cyprus company formation agency services (i'm not going to mention them here) but they are actually doing exact what you describe. Some of them even price a Cyprus company formation say EUR 395 and once you get started with them and agreed to proceed just suddenly there come additional fees, like registered office, company secretary and even management fee and stuff like that.

    I ended up to pay 2700 EUR for a company formation in Cyprus that start at (I can't remember if it was €395 or 595) say €595 I feeled they raped me!
  3. dotbloup

    dotbloup Offshore Agent Entrepreneur BANNED MEMBER

    I do know if you are aware of it but i do encourage to get accustomed with basic accounting, the IFRS format, the accounting softwares like Xero. I can tell you that when you don't have payroll, it is all very simple. You can fill up your annual report yourself. Usually the accounting software create the reports for you and you enter it in the system of the government (Cyprus, Jersey, Uk) with Google chrome it can automatically translate. Most of the time in the ta havens the fines for doing mistakes are not that high. In fact they are lower than paying a local accountant or being forced to work with an accountant.
  4. auric

    auric Offshore Agent Mentor Group Sponsor Business Angel

    Do you have a link for Xero? I would like to have a look at it. I'm thinking of to move my company to a different agent that has looked at my last report and told me he can do it 300 - 400 euro cheaper. But maybe if I can figure our how the Xero accounting software works I can even save more money.
  5. dotbloup

    dotbloup Offshore Agent Entrepreneur BANNED MEMBER

    There is a 30 day free trial:
    Signup for Xero & free trial | Xero

    Take the time to see if you can link your invoicing to xero because xero has many API. Then, it asks you to pay on monthly basis BUT it will be always cheaper than an accountant.

    Let me explain, Xero allow you to generate annual balance sheet, Profit and loss so that you just need to copy and paste the output from Xero to the website of the offshore country where your company resides. And that's it. That's the major requirement of the vast majority of governments all over the world.
    Admin likes this.
  6. auric

    auric Offshore Agent Mentor Group Sponsor Business Angel

    Thank you will try the software.. get back.. you use it right?
  7. dotbloup

    dotbloup Offshore Agent Entrepreneur BANNED MEMBER

    In fact, i am a consultant in accounting softwares :)
  8. Admin

    Admin Forum Moderator The Forum Cleaner

    It seems to be reasonable in pricing only $30 / month, if it is easy to use for people from various countries and not country specific i.e. US or UK then it may be well worth to try it.
    dotbloup likes this.
  9. dotbloup

    dotbloup Offshore Agent Entrepreneur BANNED MEMBER

    I d like to say i did some research, and i haven't been able to find another online accounting software in the cloud like Xero that would prevent to hire an accountant.

    30 dollars is peanuts because you can copy and paste the Balance sheet and Profit and loss for UK and USA annual statement.

    In fact, many accountants want you to believe it is mandatory to hire them. In fact, when you have an online business and no payroll. It is less complicated that it looks.
  10. ALP

    ALP New Member

  11. auric

    auric Offshore Agent Mentor Group Sponsor Business Angel

    I'm sure a BOT arrived astro2:-
  12. ALP

    ALP New Member

    I'm actually real, it is shocking!
  13. JohnK

    JohnK Active Member Entrepreneur

    What do you think, are most Agent's doing this or do you think it is only a few of them? I see CPA's here in my country doing it all time. I don't know if it is a scam or they are just jackasses.