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Estonia OU asset protection

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newtechnology

New member
Hi everyone,

I'm a citizen/resident of Estonia and I have a business incorporated as an OU (limited company). I'm the sole shareholder and director of the company.

What would be the best way to protect my ownership from i.e. divorce/creditors/etc.? Should I transfer the ownership to a foundation and if yes, which jurisdiction would be the best?
 
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Tax Cow

Moo Moo! I contribute 60% of my milk to the state.
... and if yes, which jurisdiction would be the best?
Where the official language is not spoken by the one coming after your assets. Additional crap to cut through always acts as a demotivator.

What would be the best way to protect my ownership from i.e. divorce/creditors/etc.?
Panama Foundation could be a fit, but only if you can keep the trouble at bay for 3 years. Before then, the protection is rather cosmetic. Similar "kick-in" rules often apply to foundations and trusts in other nations. Simply means that a trust or a foundation will not offer much help if you want to shelter hot money under active prosecution.

Should I transfer the ownership to a foundation...
And assets.

I do not know which rules apply in Estonia, but shaking out funds from a domestic company shouldn't be too difficult or contentious once there's a judgment against you. Your parent foundation, and the Panamanian legal system will be bypassed and ignored completely if your funds are exposed domestically.
 
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newtech2

New member
Panama Foundation could be a fit, but only if you can keep the trouble at bay for 3 years.
OK let's say I go with Panama. 3 years is fine, I'm not under active prosecution.

I do not know which rules apply in Estonia, but shaking out funds from a domestic company shouldn't be too difficult or contentious once there's a judgment against you.
So as soon as I'm in trouble I should (in theory) pay out the dividends(profit) to the foundation?

How will Estonian tax authorities look at a Panama foundation? as transparent?
 

Tax Cow

Moo Moo! I contribute 60% of my milk to the state.
So as soon as I'm in trouble I should (in theory) pay out the dividends(profit) to the foundation?
Yes. And ideally through an intermediary non-Panamanian bank, to keep the destination of money less obvious. Estonia's a little poodle, but bigger nations could pressure and bully the recieving financial institution, one way or another.

How will Estonian tax authorities look at a Panama foundation? as transparent?
The relevant part is that the presence of a parent Panama Foundation is irrelevant if crimes are committed through an Estonian company. Following a judgment, they'll shake up the local Estonian company for all its assets to cover outstanding liabilities. Why would they seek approval from Panama? The same rhetorical question can be asked if we replace Estonia with any other country.

Now, once the funds are moved to the books of a Panama Foundation, the judgements in Estonia become irrelevant. The case must re-start and reach the same conclusion in Panama before any funds can be shaken out of a Panama foundation. In practice, however, Panama Foundations haven't been shaken for a penny by any EU nations in recent history. At least that's what the lawyers who sell Panama Foundations say.
 

newtech2

New member
Sounds good, thanks a lot. I just read that the withholding tax on dividends in Estonia is 0% so I guess the tax question is settled thu&¤# This is what I was worried about.

I've seen that Panamian foundations are usually combined with a Panamian holding company. Should I do it like that (not sure if there's any benefits to this) or should the foundation itself directly own the OU company?
 

Tax Cow

Moo Moo! I contribute 60% of my milk to the state.
What are you looking to accomplish? VAT fraud, tax evasion, investment scams, bank or emi scams, borrowing and not paying back, protecting assets from a gold digger?

Note that despite my colorful past, some of the above are not within my threshold of tolerance. You do not owe me an answer, but I'm curious to know.

As for including a holding company in the structure, consult with a lawyer who knows the fine print. My basic knowledge won't carry you any further.
 
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JustAnotherNomad

Entrepreneur
Even if there is no withholding tax, there will most likely be Estonian corporate income tax to be paid.

Check if you can use a Panama holding company and use the Estonian company as a payment provider only. I know some people who claimed to have used such a setup successfully. The Estonian company has to keep a 1% payment processing fee or so, the remaining funds are transferred to the Panamanian parent company tax free.
 

newtech2

New member
Check if you can use a Panama holding company and use the Estonian company as a payment provider only. I know some people who claimed to have used such a setup successfully. The Estonian company has to keep a 1% payment processing fee or so, the remaining funds are transferred to the Panamanian parent company tax free.
Will do, thanks.

Can I pay out the dividends from the OU company directly to my personal account after transferring the ownership or do I need a bank account for the foundation? Same questions stands for Panama holding dividends.
 

JustAnotherNomad

Entrepreneur
I don’t think you’d need a foundation with that setup. But be aware that with that setup, the Panama company will be the operative business, the Estonian company would only be processing payments. So you would have to do business as the Panama company.
Unless you can somehow hide that through a LLP or something similar.
 

newtech2

New member
I know, yes, but my question was related to the 'simple' structure (Panama foundation owns Estonian limited company). Can I simply pay out the dividends directly to myself in that case or do I have to pay it out to the foundation first?
 

CaptK

Nominee Company Bank Account Real Estate Passport
Mentor Group Gold
I know, yes, but my question was related to the 'simple' structure (Panama foundation owns Estonian limited company). Can I simply pay out the dividends directly to myself in that case or do I have to pay it out to the foundation first?
Panama company and Estonian company are 2 separate entities for the purposes of Tax and safety. Estonian company simply has a marketing agreement with the Panama company. Just like @JustAnotherNomad said the Estonian company collects and processes the payment on behalf of the Panamanian company.

That's is the simple way to do it.
 

JustAnotherNomad

Entrepreneur
In the case I mentioned, the Estonian company processes payments on behalf of the Panamanian parent company and only retains a 1% processing fee (or similar). It’s basically your own PayPal.
I don’t know if there would be other rules if it was a marketing agreement. I guess it would work as well, but you would probably have take a higher cut to meet transfer pricing requirements. However, the advantage would be that your customers wouldn’t see the Panamanian company.
 

oldblueeyes

Offshore Agent
OP, look into a Belize Trust. They've always been recommended to me for the purposes of asset protection from legal action inclusive of divorces.
 
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