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FYI: Legal Use-cases For an Offshore IBC in 2020

xzars

Entrepreneur
Comrades,

Here I'd like to discuss legal use-cases that remain for an offshore IBC (unsubstantiated, paper-only). Let's take a step back from the offshore salesman's utopia of 1990's and be realistic about what meaningful things one can achieve with an offshore IBC today, without crossing the line of legality. Your input is welcome.

I'll start off:

1. Ownership Concealement (from the public eyes, but not from the government)
- Ex: You do not like the excess transparency of the UK Companies House. Register an offshore IBC in a jurisdiction where the UBO register is not publicly available, or is behind a pay wall. Declare it to HMRC to stay legal.

2. Passive Holdings (especially in a DTA country)
- Ex: Panamanian resident opens up a Singapore IBC to invest in Singapore. The DTA beautifully outlines how and where the gains and dividends are to be taxed, and therefore, there's minimal risk of inbound aggression and calls for an audit from the local tax office. As with #1, the offshore company must be declared locally.

3. Reputational Wrapper
- Ex: Puerto Rican company has difficulties making sales in the EU as clients are not willing to buy from an "exotic location." They can open up a non-resident Irish or Gibraltarian company which is owned by the local PR company. As per laws of Ireland and Gibraltar, corporate income won't be taxed that isn't sourced from local clients or connected to respective jurisdiction through a PE. And PR is happy because it gets the 4% CIT when income is remitted back to the books of local parent.

4. Stamp Duty Tax Avoidance
-
Ex: A property investor can sell the IBC which holds the title to a property instead of titling the property to a new owner, bypassing the stamp duty/property transfer tax. Counter-measures are in place across the developed world, but not everywhere, and not without loopholes (selling 99% of the underlying IBC, for example, works well in parts of the EU). Even as of today, a significant percentage if not majority of shopping malls, hotels, and large private developments are ultimately owned by 0% tax jurisdiction IBCs after a layer or two of reputational wrappers.

Let me know what creative use-cases you have found! smi(&%
 
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Cetme308win

Entrepreneur
5.Website ownership
You live in a European Union country and own a website whose content is politically incorrect or just dont wanna have problems with data protection laws so you open an LLC in USA for it.
In case of politically incorrect content you will be protected by The First Amendment.
 

xzars

Entrepreneur
GDPR is very broad as it covers any local or foreign business dealing with the data of EU customers. But packaging contentious content into a U.S. LLC, and shielding it with pro free speech laws is an idea I like quite a lot.
 

Cetme308win

Entrepreneur
GDPR is very broad as it covers any local or foreign business dealing with the data of EU customers. But packaging contentious content into a U.S. LLC, and shielding it with pro free speech laws is an idea I like quite a lot.
yep that's true but is not really enforced outside the EU....
but that's true...
I wanna start some news pages for a new SEO business I'm gonna start and that's my idea basically ;) cover everything with a U.S LLC
 

xzars

Entrepreneur
Other than the annual return are there any other filings?
VAT... Unless you sell through platforms where this issue is automated, you have to find an accountant to do it for you.

In that regard, Gib is a little better. Absent the VAT tax, there's no VAT return to file. Nevertheless, depending on the product or service, volumes, and where in the EU the customer lives, it must still be paid, i.e. with the MOSS one-stop solution. Initial VAT compliance consultation with a pro is still advised if you have a big clean business as opposed to a small banana plantation. smi(&%
 

Skadevolder

New member
In some parts of the world, it is illegal for a certain gender or ethnicity to own properties or companies.

I've experienced daugthers not able to inherit the family company or childhood home, because they are female. Offshore-constructions has made that possible.
 

marzio

Active Member
Hypothetically speaking, if you open a sole trader position in Cyprus as a non-dom and register a non-resident irish company would you be able to receive tax free dividends from the irish company or the irish company would have to pay 12.5% in Cyprus?
 
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