High asset value and sales company (HK / US?)

[justanotherguy]

Hi everyone. As title suggests, a friend of mine needs a tax-free jurisdiction (important that it's 1st world like US / HK for his business) where he can allocate assets of around $10M+ safely to a company (obv not 100% safety but at least some insurance/protection so they don't seize anything). It would be also great if there would be a bank account that can handle $5M per month. The guy is from Turkey, it's a WH business, money comes from Turkey. Preferably to set up everything within a few weeks.

Would something simple like US LLC work for him, considering the asset value & protection? Or maybe HK company is also a consideration. Am I wrong to even consider US / HK for this use-case?

Trusts could also be a thing, in 1st world preferably, but what is like the safest way to make a good trust? Everyone just wants to scam these days...

EDIT: This is assuming sh*t hits the fan and the owner is sued big-time in Turkey or wherever. Goal is to protect assets.

Any advice is really appreciated.

 

[JohnnyDoe]

How is your friend currently handling $5m per month?

 

[justanotherguy]

How is your friend currently handling $5m per month?

He has set up a lot of companies in other very popular and obvious havens, like Seychelles, Cayman, etc.
But many of his clients are not willing to do business with those, because it puts them at risk as well.
So he is looking now for 1st world country choice.

He doesn't necessary need to put all 5M per month into bank, he can start slower. Asset protection is more of an issue, without causing any problems. Paperwork is fine, but not to the extent of personal presence / some weird audits / international issues.

 

[JohnnyDoe]

He has set up a lot of companies in other very popular and obvious havens, like Seychelles, Cayman, etc.

And Turkey is happy with that?

But many of his clients are not willing to do business with those, because it puts them at risk as well.

How come they woke up now?

So he is looking now for 1st world country choice.

Hey did he finally realize it’s 2023?

He doesn't necessary need to put all 5M per month into bank, he can start slower. Asset protection is more of an issue, without causing any problems. Paperwork is fine, but not to the extent of personal presence / some weird audits / international issues.

Your friend needs to hire a proper advisor in Turkey for his domestic needs and abroad for international tax advice etc. He should provide all details about his situation and not rely on second or third hand information from a friend

 

[justanotherguy]

And Turkey is happy with that?

With a smart setup, keeping a low profile in terms of personal spending, and especially because it's Turkey and not some France - they are okay / don't know

How come they woke up now?

There was a lot of issues past weeks, legal and business operations, so he is restructuring

Hey did he finally realize it’s 2023?

Obv dude is quite old, so he is skeptical about everything. I bet his lawyer is a boomer as well.

Your friend needs to hire a proper advisor in Turkey for his domestic needs

Ofc, he already has many in place, just a second opinion never hurts. Looking for advice that he can ask his lawyers about, or just to have more assurance if a lawyer proposes the same scheme.

Any foreign country in which you have assets without any issues?

 

[JohnnyDoe]

Any foreign country in which you have assets without any issues?

the blockchain

 

[justanotherguy]

the blockchain

Assets are actual physical stuff, he can't put them into blockchain.
Plus it's WH, so no need for any crypto.

the blockchain

But I f*****g loved this answer ahah

 

[JohnnyDoe]

Turkish guy, business in Turkey, clients in Turkey = taxes in Turkey.
If he wants to play smart a*s, he must accepts the consequences.
Restructuring when issues arise is too late and can worsen things.

 

[justanotherguy]

Turkish guy, business in Turkey, clients in Turkey = taxes in Turkey.
If he wants to play smart a*s, he must accepts the consequences.
Restructuring when issues arise is too late and can worsen things.

That's all true and he does that already obv for such volume, and I guess he doesn't want to put all eggs in 1 basket.
But would US LLC + something like Ramp / Mercury be a bad set up? Any high taxation he incurs with such asset volume?

 

[JohnnyDoe]

That's all true and he does that already obv for such volume, and I guess he doesn't want to put all eggs in 1 basket.
But would US LLC + something like Ramp / Mercury be a bad set up? Any high taxation he incurs with such asset volume?

Zero benefits. More headaches.

 

[Mike Forman]

Getting a corporate bank account in Hong Kong without any link to China mainland or Hong Kong would be a challenge.

Using EMI is no option at all.

As mentioned above if he lives in Turkey, operates in Turkey and has customers in Turkey he is liable to Turkish taxation. Even Turkey is not like France, I would not take that risk unless he can properly structure it using corporations not in his name.

5 million usd a month is a lot of money and banks will do some due diligence. Having business proof of corporations from Seychelles could still be used in Hong Kong or Singapore, US I doubt it. Without business proof I don't see any bank will if he succeeds to open account let transactions of 5 million pass through without questions asked. Also how will he withdraw profits? Even he succeeds to open a personal bank account in Hong Kong all information will be exchanged to his residence country, Turkey.

 

[EliasIT]

Is he working for the Walhalla network your Turkish friend ?

If it all is legal I'm sure your Turkish friend would have no problems what so ever to setup his business in the UK (for great infrastructure and reputation) Switzerland or Malta

 

[ZipZop]

sorry to ask but what is "WH"?
depending of the answer, this is something I do for clients (mostly russian now).
1) you take a second residency (UAE or Malaysia with the new ppv) + open a company
2) with the right connection (only for amounts above USD15m) you find a right corporate bank in UAE with a minimum redit rating of "A" (avoid the usual ones like NBD, FAB, ADCB, Mashrek, etc)
3) set up a real structure, witht top holding,etc.. and take the time to do it. Every good structure should have a "plan B" already set up in case the banking part becomes a no go for any political reason..
4) Avoid the US, future is on the East part of the world
5) at the top of the structure, set up an irrevocable protective asset Trust, in which the Trustee doesn't manage the company/holding which own all the asset, except in specific legal case against you in which the Trustee take over the control until the matter is resolve. Also in a jurisdiction where the statute of limitation is 12 to maximum 24 months.

to summarize.. think big picture, it's useless to have multiple companies everywhere if you do not have a long term plan. the aim is to be able to "show" everything to any (tax or else) authorities so they won't have anything to say about it

 

[justanotherguy]

Having business proof of corporations from Seychelles could still be used in Hong Kong or Singapore, US I doubt it.

Fortunately he has a lot of transactions in Turkey itself, the offshore ones are part of it, but yeah I see US would be truly skeptical if they know.
Am I wrong to say that something like Ramp bank in the US, where they handle high-ticket customer would be okay with all of these? Assuming not 5M straight away, but gradually, and showing only Turkish transactions.

Also how will he withdraw profits? Even he succeeds to open a personal bank account in Hong Kong all information will be exchanged to his residence country, Turkey.

I don't think he actually spends any of the money, people in this industry are extremely low-profile, he just reinvests them. Is it the HK thing to exchange information with Turkey, or any country would do that because of his residency?

Is he working for the Walhalla network your Turkish friend ?

Ahah, there are a lot of people like him who do those numbers with ease, it only requires extremely high capital cost, more than any business I know

UK (for great infrastructure and reputation),

As in Scottish LP or just an Ltd. ? Wouldn't UK impose a lot of taxes on assets and revenue?

Switzerland

I heard of Zug and it's favorable taxation there, could be okay if it's below 10%, but how would they tax / regulate the assets of 10M+? And I would assume they would also report everything back to Turkey?

Malta

Interesting, didn't consider honestly. How would they treat the assets and would they report back to Turkey?

second residency (UAE, ...), trust, big bank

Yes this is obviously an amazing scheme, along with the trust, is there any green country area for this setup? Clients wouldn't do business with Dubai.

Malaysia

Malaysia looks interesting. I never heard anyone setting up the trust there. Is it considered a green area?

Am I wrong to say that it wouldn't be a safe option because of economy, political risk, etc.

sorry to ask but what is "WH"?

Forgot to respond, it's a WhiteHat business, meaning nothing illegal, and I mean it truly, like every transaction can be justified, but can't mention the industry ahaha

Am I wrong to say that something like Ramp bank in the US, where they handle high-ticket customer would be okay with all of these?

Ignore this question, already answered previously, just didn't notice

 

[EliasIT]

I heard of Zug and it's favorable taxation there, could be okay if it's below 10%, but how would they tax / regulate the assets of 10M+? And I would assume they would also report everything back to Turkey?

they will and relocation would be the best option.

 

[ZipZop]

Zug is good, actually all swiss cantons are more or less between 10 and 14% corporate tax (also that's the gross tax, as tax itself is deductible). To set up a SA (Ltd, AG) the minimum share capital is CHF 100k and at least half of it has to be paid. teh advantage is as the name in french is saying "Société Anonyme" the shareholders are not disclose to the public but it is mandatory to disclose the UBO to the bank (any person who owns more than 25% of the share capital). you need at least a local director with single signatory right. the UBO doesn't need to live in Switzerland. And yes there is the automatic exchance between Switzerland and Turkey, but he as you say he is not really spending the revenues himself (i.e. dividend) he can keep that under the company and declare only the tax value (swiss authorities send it every 2-3 years) of the company which will be added to his wealth in Turkey.
the biggest issue is the bank (like always), depend of the risk profile of the client and his activities it can be quite difficult to open a (corporate and personal) bank account as a non resident.
(I'm Swiss with legal background)

Dubai was for the residency ( I mean a real one with Emirates ID, lease agreement, local salary and utility bills)

regarding Malaysia, it's a very stable economy the currency is not pegged to the USD anymore, I would suggest a company in Labuan.
Most of the banks are top rated and very professional.

the trust should never be in the same jurisdiction as the operational or holding company.

Again it's hard to give a simple answer, clients tend to focus only on the operational part and mostly put all their eggs in the same basket.

Usually it takes us at least a couple of weeks (once we have all the docs) to understand the goals, the succession plan, the business activities, the flows of cash, risk profile, long term view,etc.. before finding the most stable and secure solution