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nobrainer

New member
Hi guys,
Could really use your help.

I am going to launch a super privacy focused end to end encrypted file hosting service. Besides the service itself which will not let even to me as admin the power to access users files, i still want to structure my company in a way that will make any law agency who wishes to complain or request takedowns jump maximum beurocratic hoops before reaching to me with such requests (which eventually i intend to comply with, but due to the nature of end to end encryption i won't have anything to give besides encrypted files )

I do however still need a big help with the company/ies structure before launching:

I am thinking of something along these lines for the business structure, i just don't know if it's possible at all, and if it is how to implement the relationships between the companies and myself to eventually receive the earnings made from it.

so here goes:

Step I:
The main service company will be based and incorporated in Panama.

I want that on the company docs of this company will be registered a 3rd party person (not me) from Philippines, Pakistan or any country that isn't part of the 5, 9 or 14 eyes, or part of the EU. (I have some people in these and other countries who are willing to do this )

This company will only accept the crypto currencies type of payments from customers, so it wont need to have a bank account at all.

Questions for step I:
1. If me or my local Georgian Company are not mentioned in the Panamanian company docs, how will i be able to officially remit the earnings to myself from the Panamanian company.

2. What relationship or agreements i will need to have with the company or / and with the 3rd party person registered in company?

3. If question 1 has some solution and i will recieve the funds from the panamanian company, and pay local tax for it, I'll also want to exchange some of this crypto to FIAT in local bank, and they will ask the source of income, which i don't mind to explain and show all details of, but how do i explain that i get this money from a company I'm not officially part of and not appearing in it's registration docs?

Step II
In order to be able to accept both cryptocurrency and regular FIAT payments via traditional payment methods such as credit cards, Paypal, wire transfer etc, i thought of the following solution:

1. The panamanian company will create voucher codes that can be used to top up or activate the user accounts.

2. As mentioned in step I - The Panamanian company will accept only Cryptocurrency payments to get these vouchers for service activation.

3. In order to support all other traditional payment methods while protecting the users privacy and anonymity i will establish an additional company in a different offshore jurisdiction in which Paypal agrees to operate business accounts in, Panama is not an option, so probably Gibraltar or Mauritius - which i think that in both PayPal allows business accounts that accepts payments.

4. This 2nd company will act as an online vouchers shop where users can pay with traditional payment methods to purchase the vouchers created by the panamanian service, and use these vouchers to activate their accounts.

5. After voucher code was activated, the Panamanian company, who does not have any data retention obligations, will delete the code and the traces of connection between the voucher code and the specific user account who purchased that voucher.
In this way the only thing that will be known about the user by 3rd parties is that he purchased a voucher.

6. The 2nd company (Gibraltar or Mauritius) will then remit the money to the Panamanian company on 99.9% /0.1% revshare basis.

7. The Panamanian company will then remit my respective shares of profits into my domestic company and of course I'll declare and pay taxes domestically
(But this is only in case questions from Step I have solutions)

Questions for step II:

1. What kind of agreement /relationship company 1 and company 2 should have and how should it be set officially?

2. If the second company will also have 3rd party person register on company docs
It means that he should / would also be registered as the UBO of the PayPal / bank account ?
And if so, how does it affect me
And do i need a side agreement with him to limit his access to the funds?



What are your thoughts about the above flow both privacy and legally wise - how much if at all i am personally legally vulnerable to lawsuits Incase 3 letter agency try to hunt down one of the users who uploaded something not to their liking to my service?

Just as FYI - I do plan to cooporate with whatever request will get to me eventually, just making it as hard as possible to pass that request to me.


Thanks in advance for your help
 

Sols

Staff member
Mentor Group Gold
Step I:
The main service company will be based and incorporated in Panama.
Why Panama?

1. If me or my local Georgian Company are not mentioned in the Panamanian company docs, how will i be able to officially remit the earnings to myself from the Panamanian company.
The Panamanian company can hire the Georgian company for software development services, management consultancy, or something else along those lines.

2. What relationship or agreements i will need to have with the company or / and with the 3rd party person registered in company?
Answered in #1.

3. If question 1 has some solution and i will recieve the funds from the panamanian company, and pay local tax for it, I'll also want to exchange some of this crypto to FIAT in local bank, and they will ask the source of income, which i don't mind to explain and show all details of, but how do i explain that i get this money from a company I'm not officially part of and not appearing in it's registration docs?
Show them agreement, invoices, and maybe timesheets for the amounts your Georgian company invoices the Panamanian company.

1. The panamanian company will create voucher codes that can be used to top up or activate the user accounts.
OK.

2. As mentioned in step I - The Panamanian company will accept only Cryptocurrency payments to get these vouchers for service activation.
OK.

3. In order to support all other traditional payment methods while protecting the users privacy and anonymity i will establish an additional company in a different offshore jurisdiction in which Paypal agrees to operate business accounts in, Panama is not an option, so probably Gibraltar or Mauritius - which i think that in both PayPal allows business accounts that accepts payments.
Yes and no. It's technically possible but it will fall apart either at account opening/onboarding or once your volumes get so high they start looking into what the company does. Selling vouchers? OK, for what? Where is your AML policy and financial services license? No license needed because it's a closed-loop voucher? OK, show us a legal opinion. Now show us what the vouchers are redeemed for. Anonymous file hosting? OK, so you are effectively just using us to sell anonymous file hosting. Good bye, account blocked, UBO and company blacklisted.

4. This 2nd company will act as an online vouchers shop where users can pay with traditional payment methods to purchase the vouchers created by the panamanian service, and use these vouchers to activate their accounts.
OK.

5. After voucher code was activated, the Panamanian company, who does not have any data retention obligations, will delete the code and the traces of connection between the voucher code and the specific user account who purchased that voucher.
In this way the only thing that will be known about the user by 3rd parties is that he purchased a voucher.
I'm not entirely sure but I think you're potentially destroying data you are required to keep to comply with necessary AML obligations.

6. The 2nd company (Gibraltar or Mauritius) will then remit the money to the Panamanian company on 99.9% /0.1% revshare basis.
Even if you manage to keep this voucher company alive, this rev share is not at all in line with market rates. Vouchers usually cost 8–12%. If you try to get away with 0.10%, that will one day come back and haunt you. Look into BEPS and Transfer Pricing.

1. What kind of agreement /relationship company 1 and company 2 should have and how should it be set officially?
Look into payment agents. There are a lot of threads about them.
 

nobrainer

New member
Because it doesn't instantly comply with u.s requests for anything + its quick to open, its not part of the 14 , 9 , 5 eyes and it had practically none data retention laws.
The Panamanian company can hire the Georgian company for software development services, management consultancy, or something else along those lines.


Answered in #1.


Show them agreement, invoices, and maybe timesheets for the amounts your Georgian company invoices the Panamanian company.


OK.


OK.


Yes and no. It's technically possible but it will fall apart either at account opening/onboarding or once your volumes get so high they start looking into what the company does. Selling vouchers? OK, for what? Where is your AML policy and financial services license? No license needed because it's a closed-loop voucher? OK, show us a legal opinion. Now show us what the vouchers are redeemed for. Anonymous file hosting? OK, so you are effectively just using us to sell anonymous file hosting. Good bye, account blocked, UBO and company blacklisted.
Selling vouchers for end to encryption services File hosting, email service, VPN or cloud storage is illegal or problematic for banks?
The users who buy the vouchers already verified themselves at PayPal and PayPal will have all their data.
And yes selling vouchers for service like an end to end encryption file hosting service - i did not understand what is wrong with it.
If i would sell voucher to protonmail its ok but this one no? Why?



OK.


I'm not entirely sure but I think you're potentially destroying data you are required to keep to comply with necessary AML obligations.

Based on Panamanian lawyer it was confirmed that its not breaking Panamanian laws.

Even if you manage to keep this voucher company alive, this rev share is not at all in line with market rates. Vouchers usually cost 8–12%. If you try to get away with 0.10%, that will one day come back and haunt you. Look into BEPS and Transfer Pricing.
Don't know what is BEPS and transfer pricing.
There are laws that force you to have minimal revshare %?

Look into payment agents. There are a lot of threads about them.
Hmm look at what ?
 

Jerry1911

Entrepreneur

nobrainer

New member
Yes. Usually transactions between related entities must be done at arms length. Meaning you cannot charge above or below market rates depending on the product/service in question.


And in most cases you also need to have transfer pricing documentation unless there's exemptions.
The link is from OECD yet both companies are not members of the OECD, and eventually I'll get remitted from the Panamanian company.

Doesn't it have any effect?
 

Sols

Staff member
Mentor Group Gold
Because it doesn't instantly comply with u.s requests for anything + its quick to open, its not part of the 14 , 9 , 5 eyes and it had practically none data retention laws.
I'm not so sure about that (for example, Panama's entire economy is USD based which is a lot of potential US influence) but OK.

Selling vouchers for end to encryption services File hosting, email service, VPN or cloud storage is illegal or problematic for banks?
Yes. It's considered high risk by most payment processors and outright banned with many of them. It's high risk because it's so very, very, VERY popular with criminals for piracy and distribution of other illegal materials.

Not that your customers would do that. But you're lumped in with that group of people, unfortunately.

The users who buy the vouchers already verified themselves at PayPal and PayPal will have all their data.
You cannot rely 100% on third-party due diligence. AML regulations are very clear about this.

And yes selling vouchers for service like an end to end encryption file hosting service - i did not understand what is wrong with it.
Whatever your vouchers can be redeemed for, has to be OK with PayPal and other payment processors, because that's effectively what the customer pays for.

PayPal doesn't allow the kind of business you're purporting here. Once they realize that what you're selling is vouchers that are redeemable for a type of service that's banned for PayPal, they will view it as your PayPal account being used to sell that service.

If i would sell voucher to protonmail its ok but this one no? Why?
Proton is a Swiss company with directors resident in Switzerland offering email hosting and related services in part made in and hosted in Switzerland. It also cooperates fully with Swiss law enforcement. Switzerland is a reputable country.

You're a Mauritius incorporated payment agent selling vouchers for a Panamanian anonymous file host.

There are a couple of differences there.

But PayPal would throw out Proton if they found a reason.

Based on Panamanian lawyer it was confirmed that its not breaking Panamanian laws.
OK.

Don't know what is BEPS and transfer pricing.
Google or search this forum. Lots of good information out there. But @Jerry1911 gave a good summary.

There are laws that force you to have minimal revshare %?
Yes.

Hmm look at what ?
Payment agent company. There have been a couple of threads here in the last year or so about them. It's essentially a subsidiary in another jurisdiction whose purpose is to contract with payment processors on behalf of its parent.

The link is from OECD yet both companies are not members of the OECD, and eventually I'll get remitted from the Panamanian company.

Doesn't it have any effect?
OECD's influence expands far beyond its members. It wrote the rule book for things like BEPS, Transfer Pricing, CRS/AEOI, and most modern tax treaties, which have become international standards.
 

nobrainer

New member
I'm not so sure about that (for example, Panama's entire economy is USD based which is a lot of potential US influence) but OK.


Yes. It's considered high risk by most payment processors and outright banned with many of them. It's high risk because it's so very, very, VERY popular with criminals for piracy and distribution of other illegal materials.

Not that your customers would do that. But you're lumped in with that group of people, unfortunately.


You cannot rely 100% on third-party due diligence. AML regulations are very clear about this.


Whatever your vouchers can be redeemed for, has to be OK with PayPal and other payment processors, because that's effectively what the customer pays for.

PayPal doesn't allow the kind of business you're purporting here. Once they realize that what you're selling is vouchers that are redeemable for a type of service that's banned for PayPal, they will view it as your PayPal account being used to sell that service.


Proton is a Swiss company with directors resident in Switzerland offering email hosting and related services in part made in and hosted in Switzerland. It also cooperates fully with Swiss law enforcement. Switzerland is a reputable country.

You're a Mauritius incorporated payment agent selling vouchers for a Panamanian anonymous file host.

There are a couple of differences there.

But PayPal would throw out Proton if they found a reason.


OK.


Google or search this forum. Lots of good information out there. But @Jerry1911 gave a good summary.


Yes.


Payment agent company. There have been a couple of threads here in the last year or so about them. It's essentially a subsidiary in another jurisdiction whose purpose is to contract with payment processors on behalf of its parent.


OECD's influence expands far beyond its members. It wrote the rule book for things like BEPS, Transfer Pricing, CRS/AEOI, and most modern tax treaties, which have become international standards.
Thanks for the replies, you've wrote me things to check and avoid that i wasn't aware of which I'll check further but I'm not sure i can find all the solution to achieve the goal by myself.
Do you have any better suggestions to how can i achieve the goal mentioned in the post or at least know who i could consult that might help me find the nuances to the get to the final goal?
 
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