Does it legally to start offshore?

[spamfilter]

I plan to run startup in IT-area. There are most optimal way for me now is to work with freelancers, which will be making theirs part of task for me. I plan to give service in international base's model - for people and SMB from different countries around the world. I'll use contract at site which will not be papers signed. I'll not have office and constantly personal. I'll need also to pay for service from datacenters and so on.


I want my business is fully legal and I don't have problem with no one country in the future. I'm from Russia and there is no simply to open such type of business here as there are no developed rules for such type of business and there are to much difficulties with it in any areas.


So, I think about open offshore company - there is excellent choose as I see it. Accounting and auditorings reports are not needed, payment are quickly and simple and so on. I'm even ready to pay taxes, there is no problem for me. But I'm afraid a little if such type of business is fully legacy and if I'm able to develope it in longterm area.


Can you talk a little about your expierince in this area - what do you think is best for me - to open traditional or offshore company?


Best regards.

 

[tax-haven]

Where will your customers come from ?

 

[spamfilter]

They will be all around the world from. Company will be selling throw internet by credit card via some service as 2Checkout or Moneybookers or so on.

 

[averagejoe]

I don't know about the legal part, but you say you will use 2co or MB to accept payments from your customers which means you will not be limited with the jurisdiction of incorporation so I would look into Seychelles, Belize or even Cyprus all depending on which activity the company will have.

 

[JohnLocke]

So, I think about open offshore company - there is excellent choose as I see it. Accounting and auditorings reports are not needed, payment are quickly and simple and so on. I'm even ready to pay taxes, there is no problem for me. But I'm afraid a little if such type of business is fully legacy and if I'm able to develope it in longterm area.

It is not illegal to have offshore company at all, what people just sometimes forget is to pay tax from the profits in the company in their local country. Most countries in this world requires you to report any bank account hold by you personally or throug a corporation owned by you in an foreign country. It is important to consult a local tax advisor in order to gain tax advantages with an offshore company or find advise from somewhere else.

 

[spamfilter]

Admin, thank you so much for such professional consulting. I'm really new in it and try only to be honest with myself, my customers and my state. So, as I understood, there are impossible accusations in illegal activity if to pay taxes according with native rules. There are other problem what in my country some rules are absent or have inconsistent bases, that why sometimes not so simple to be clear inside of law as it's problem to understand it.

 

[JohnLocke]

Your welcome, I'm not sure if I really have been of any help, but I find it important to stress the fact that you need some local tax advice in order to get the right answer, we have so many great and professional clients who made there homework before they incorporated a company with the help of us and they have no to only very few issues we need to help with to give them peace to manage their business.


We whish you the same and will hope to be able to serve you in the near future

 

[fernadex]

Do you pay any corporate tax in Russia?

 

[JohnLocke]

Do you pay any corporate tax in Russia?

Liability To Corporate Tax In Russia


Profits tax is levied on Russian legal entities and foreign legal entities that carry on business activity in Russia through permanent establishments and/or receive income from sources in Russia.


Russian Legal Entities (which would include business forms incorporated by foreign owners such as the Joint Stock Company or the Limited Liability Company) are taxed on their worldwide income. There is limited consolidation or group relief for tax purposes; each company within a group is a separate taxpayer.


A permanent establishment of a foreign legal entity in Russia - typically meaning a Representative Office but including a branch, division, bureau, office, agency or any other economically autonomous subdivision - is taxed on Russian-source income, which includes income received by the permanent establishment from whatever source.





A PE is deemed to be formed from the moment when entrepreneurial activities begin to be regularly carried out. Certain activities do not lead to the creation of a PE, including those of a preparatory and auxiliary nature, the possession of securities, share interests and other assets in Russia, the mere conclusion of a simple partnership agreement to be carried out in Russia, the secondment of personnel to work in Russia, and the export and import of goods.


Tax Rates


The rate of corporate profits tax in Russia is currently 20% (reduced from 24% in 2008). Of this amount, 2% is payable to the central government, and the remainder is payable to the regional government. Regional governments have the power to reduce the regional element by up to 4%.


Capital gains are usually taxed at the corporate profits tax rate of 20%.


There is no branch remittance tax, but there are withholding taxes as follows:

• Dividends 9% (15% if either the payor or recipient of the dividends is a foreign legal entity);
  
• Interest: 0% on domestic payments; and 20% on payments to non-treaty countries.
  
• Freight expenses 10%, but only if the payor does not have a Permanent Establishment in Russia;
  
• Royalties from patents, know-how, etc. 20% (for payments to non-treaty countires; exempt for domestic payments);
  
• Payments of other Russian source income to foreign companies 20% (ditto)
  

From 1st January 2007 there is unlimited carry-forward of prior-year losses from the previous 10 years, and a FIFO basis is applied; there is no carry-back. Until 2006, only 30% of current year profits could be sheltered with prior year losses.





There is no tax credit with the domestic 9% dividend tax, but if a Russian legal entity pays the dividend onwards to its own investors, this is untaxed. Thus an RLE deducts dividends received from dividends paid out before calculating tax payable on the balance.

 

[Oswaldo]

Due to financial crisis the whole world is affected by it and under these circumstances, i would recommend that you should not open any of such company.The money value has gone down greatly and people are now interested something more concrete in nature and with physical existence.

 

[wosniak]

So Russia isn't that good any longer for doing business? Is it at all possible to do business there without to pay the MARF some money?

 

[spamfilter]

what is MARF?

 

[wosniak]

LoL mend to be Mafia

 

[Lecitia]

Admin' date=' thank you so much for such professional consulting. I'm really new in it and try only to be honest with myself, my customers and my state. So, as I understood, there are impossible accusations in illegal activity if to pay taxes according with native rules. There are other problem what in my country some rules are absent or have inconsistent bases, that why sometimes not so simple to be clear inside of law as it's problem to understand it.[/quote']
Which country are you from?

 

[averagejoe]

Liability To Corporate Tax In Russia


Profits tax is levied on Russian legal entities and foreign legal entities that carry on business activity in Russia through permanent establishments and/or receive income from sources in Russia.


Russian Legal Entities (which would include business forms incorporated by foreign owners such as the Joint Stock Company or the Limited Liability Company) are taxed on their worldwide income. There is limited consolidation or group relief for tax purposes; each company within a group is a separate taxpayer.


A permanent establishment of a foreign legal entity in Russia - typically meaning a Representative Office but including a branch, division, bureau, office, agency or any other economically autonomous subdivision - is taxed on Russian-source income, which includes income received by the permanent establishment from whatever source.





A PE is deemed to be formed from the moment when entrepreneurial activities begin to be regularly carried out. Certain activities do not lead to the creation of a PE, including those of a preparatory and auxiliary nature, the possession of securities, share interests and other assets in Russia, the mere conclusion of a simple partnership agreement to be carried out in Russia, the secondment of personnel to work in Russia, and the export and import of goods.


Tax Rates


The rate of corporate profits tax in Russia is currently 20% (reduced from 24% in 2008). Of this amount, 2% is payable to the central government, and the remainder is payable to the regional government. Regional governments have the power to reduce the regional element by up to 4%.


Capital gains are usually taxed at the corporate profits tax rate of 20%.


There is no branch remittance tax, but there are withholding taxes as follows:

• Dividends 9% (15% if either the payor or recipient of the dividends is a foreign legal entity);
  
• Interest: 0% on domestic payments; and 20% on payments to non-treaty countries.
  
• Freight expenses 10%, but only if the payor does not have a Permanent Establishment in Russia;
  
• Royalties from patents, know-how, etc. 20% (for payments to non-treaty countires; exempt for domestic payments);
  
• Payments of other Russian source income to foreign companies 20% (ditto)
  

From 1st January 2007 there is unlimited carry-forward of prior-year losses from the previous 10 years, and a FIFO basis is applied; there is no carry-back. Until 2006, only 30% of current year profits could be sheltered with prior year losses.





There is no tax credit with the domestic 9% dividend tax, but if a Russian legal entity pays the dividend onwards to its own investors, this is untaxed. Thus an RLE deducts dividends received from dividends paid out before calculating tax payable on the balance.

Great information Admin.. do you have some up to date for 2015 / 2016 tax information maybe?

 

[JohnLocke]

Let me know what information you are looking for and I'm happy to find and post theme here

 

[walterz]

If you obey the Law of your country I think everything will going legal. Except you do some black hat things in your bussiness

 

[Jack Dui]

Main purpose of offshore business is protecting own assets and getting secrecy. Thinking about legal or illegal is secondary....(It's only MY opinion)

 

[deadpool]

Once you do it right i.e... disclosing to your govt, offshore accounts cant be illegal.

 

[myshufflemix]

It's legal. If you want to start your own offshore company, you need to get the proper documents to operate on that offshore country. You also need to learn their corporate/business tax laws.