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T

Txolkin

Offshore Agent
Aug 12, 2011
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#1
Hi,


I'm really, really new at this, so patients everyone :w:


I work online as a freelancer (=multiple clients in many different countries).


I'm a web analyzer/translator etc.


My nationality is Danish, but I live officially in Spain, paying (too many) taxes etc for being an entrepreneur.


I'm thinking of an offshore company, but I'm worried it may cause problems for my situation. Am I liable to pay some form of income tax for my own residencial location,


if my earnings go to my offshore bank/company? Could some of those earnings be directed to my bank account here, or would those then be taxable locally?


Should I be looking into euro zone tax havens, considering the exchange costs?


Any help or reading material appreciated!
 
#2
You want to appoint nominees i.e. nominee director and shareholder when you incorporate your offshore company. This will be required in order to stand a chance to proof that your offshore company is controlled and managed abroad (in the offshore jurisdiction of your choice). Further you never want to take home any money from the offshore companies account.
 
#3
Thanks.


So, for a one man company, I'd be the director, and all the business would happen under foreign jurisdiction.


How would I get my hands on some earnings, if I don't withdraw from the os account?


Can I get direct client payments to a local EU account, if it's said to be for my services/company?


If I withdraw a monthly amount, and just file this for taxes, I'd only pay the personal income tax, right?


I wonder if I would pay tax to my home country or my country of residence (both EU).


Lastly: for this kind of tiny online business, are there strong recommendations for an os location?
 
#4
If I withdraw a monthly amount, and just file this for taxes, I'd only pay the personal income tax, right?
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This is what I do and it has been working for me the last 1 year and until now :)

Lastly: for this kind of tiny online business, are there strong recommendations for an os location?
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Seychelles Barclays were perfectly good but they just changed the minimum depsoit limit so I believe it won't suite you. Other places are Cyprus but I do hope that others may make suggestions as I'm on the search too.
 
#5
So, for a one man company, I'd be the director, and all the business would happen under foreign jurisdiction.
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Sorry for the confusion, but by nominee director and shareholder I mean that you will have to appoint some director and shareholder to the company which your company service provider may offer you at additional costs. If you are the director and shareholder of the company the company will be considered to be controlled and managed by you and therefore has to be taxed in the country of where you live, that is at least the case in 90% of all countries if not all :)


Even if there is no public register of companies in the offshore jurisdiction like it is the case in the Seychelles, then most often the director of the company has to sign contracts and agreements in certain cases and if they are signed by you then it may be prove enough for the tax authority to tax you and to be fined.
 
#6
How would I get my hands on some earnings, if I don't withdraw from the os account?
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You can do so, but take in consideration that you will be taxed on the amount you take home, also if you do so directly from the offshore bank account to your local account you leave a traceable path which may be used against you in the case that your local tax auth. file any tax claim.


There are options to avoid such.
 
#7
Finding a solution for freelancers we should also take into consideration how to invoice the client.


What company name, contact information, and bank account to use?


I can image that most of the clients (small agencies etc.) hesitate to deal with an offshore company.


Regarding tax in most countries (US, Germany etc.) as far as I know it is not important how much money you bring / transfer back home.


Instead your worldwide income as a resident of that country will be subject to tax (unless the country where you are working has a double taxation agreement with your country of residence).


Considering these aspects I was thinking about a Private Limited in H.K. with nominee shareholder and nominee director (as suggested by Admin) so that your name will not appear in the public company registry, in addition with a corporate bank account (HSBC, Hang Seng, SCB etc).


Because of anti money laundering rules the bank will want to know your real name, so we have to check what kind of tax agreements H.K. has signed with the country of your residence. Luckily H.K. is not willing to apply EU Saving Tax Directive (STD), but they signed some MLATs with European countries for cooperation in criminal cases.


With the corporate bank account we should be able to open a Paypal business account in the name of the Limited company. Maybe a virtual H.K. address is required for that as well and a H.K. phone number should be available with Skype.


To get money from the H.K. bank account, of course you can use the credit card for worldwide withdrawl, and then load some of the cash onto your local bank account for paying your bills.


I'm open for feedback and suggestions about this structure. It's not supposed to be a solution but I'm interested in one.
 
#8
With the corporate bank account we should be able to open a Paypal business account in the name of the Limited company. Maybe a virtual H.K. address is required for that as well and a H.K. phone number should be available with Skype.
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I'm not sure if that is sufficient, PayPal is country specific, you will need someone at the address of the company to answer the phone, also there are voices that say PayPal trace the IP address from where you login to the PayPal account and if it continuously comes from IP's outside of HK it may course troubles... I don't know if that is true or how to solve the issue if any, just wanted to lead your attention to this issue.

Regarding tax in most countries (US, Germany etc.) as far as I know it is not important how much money you bring / transfer back home.
Instead your worldwide income as a resident of that country will be subject to tax (unless the country where you are working has a double taxation agreement with your country of residence).
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True, but it depends very much on how you structure the offshore company and what jurisdiction you incorporate into.. there are options to only pay tax from the profits you "take home".
 
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#9
sorry forgot, you are right, the country / offshore jurisdiction need to have a DTA with the country of resident for this to work, otherwise you will need to find a more gray area solution which we of course can't recommend to do but we do know that some company service providers offer.
 
#10
Thanks for the comments so far. Looks like there's quite a few aspects to take into account.


If I was to go with Cyprus for example, what would be the estimate for the initial funding costs and then the


monthly fixed expenses for having an off-shore company in general?
 
#11
Well actually you can find our fees here: Cyprus Company


Annual costs are between EURO 1.000 - 1.500 depending on what services are required, however, you may want to submit a ticket for a quote to incorporate a Cyprus company and the attached fees.
 
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#12
I can see the Cyprus option is more costly. As ebaywins stated, there are now deposit limits in Seychelles, but is this only for some banks? E.g. could Seychelles still be an option for a small business?
 
#13
E.g. could Seychelles still be an option for a small business?
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I assume you mean for banking right?


There are only 2 or 3 banks in the Seychelles and 2 with which we are able to help to open an account, both have the same minimum balance limit now.
 
#15
I would agree to your statement balloo, well, I'm not in a position to be considered a valid source in this question :) But it is healthy sanity o consider your requirements carefully and structure the company as it best fits your aim and then look at the fees rather than the opposite.
 
#16
I'm back, viewing my options with this again. After research and thinking I believe I'd like to open my offshore business in a "good reputation" area, hence choose a low taxation country instead of raising flags with the location.


As I'm off to traveling there soon, I thought of Malta. I've read the corporate tax can get reduced to even few % only in some businesses. Any comments on this? And, is it better/cheaper... to set up the business in person locally?


Then, as for a one man business: I'd pay corporate tax (only) in the offshore country, = of all my income, and then also pay personal income tax in my country of residence, = of all my income (that I declare anyway). That sounds almost like double taxation to me, so I'd need to calculate or understand this well to benefit from any this. Of course I would avoid paying the obligatory pension fees, so there's a plus.
 
#18
Back to this a bit: Do I have to have a bank account in Seychelles, if my company is registered there? I really need an option with less annual fees for small business, so is this when a Seychelles company, Cyprus (or Malta) bank account would come into question?
 
#20
Actually not many have a bank account in the Seychelles just because they have incorporated there! Most either bank in Cyprus or find another offshore jurisdiction to bank, i.e. Switzerland, Lichtenstein, Malta and so forth...
 
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