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How can I own an offshore business in a tax heaven as a minor? I’m 16.

umair

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Jun 26, 2020
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Hey guys!

Im looking to start a small business with a friend who is well over the age of 18. He’ll be my business partner.

However, I’m only 16 and I want to legally be part of this company and be able to make decisions as the idea and capital is all mine.
Please guide me on how this is possible and how I can register a business, a partnership, on my name.

Thank you, everyone.
 
You can simply get a Power of Attorney from your parrents to be able to sign on their behalf or have your parents sign where you have to sign, that's the only possible way of doing it as far as I know.
 
As mentioned above, a UK limited company work well in your case. Use it to hold shares in the company you’re investing in.

If you need to receive dividend from the new venture or any payment (which I don’t think you should), you can relatively easily open a less reputable EMI account.

I know of quite a few EMIs that do open accounts for companies solely owned and managed by minors. I am not affiliated with them, but feel free to PM.

I’d also add that many states in the US, e.g. New Mexico, Wyoming, does not have age restrictions. Obtaining an EIN does not have age issues either. Problem will be with US banking.

Few years ago, Euro Pacific Bank opens account for minor signatories. They don’t do that anymore.

Anyway, good luck with your new ventures!
 
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Thank you everyone for your recommendations and help. I have now registered my business in Wyoming, a LLC. I was allowed to be an LLC member at the age of 16 and the process was very simple and swift. Opening an LLC in Delaware, New Mexico and Nevada is also very simple; they all allow minors to be LLC members. However, what I really struggled with was opening up a personal and business bank account. I was not able to find a bank best suited for our business, so we will be opening a business account with TransferWise today. However, TransferWise will not let me open a personal account as I'm not 18 yet. Do you guys have any recommendations for me opening a personal account in a bank, preferably and online one?

Thank you for all your answers. (@Cetme308win, your advice was spot on, and that's why I talked to banks before incorporating. TransferWise will allow a business account, but not a personal one on my name)
 
Thank you everyone for your recommendations and help. I have now registered my business in Wyoming, a LLC. I was allowed to be an LLC member at the age of 16 and the process was very simple and swift. Opening an LLC in Delaware, New Mexico and Nevada is also very simple; they all allow minors to be LLC members. However, what I really struggled with was opening up a personal and business bank account. I was not able to find a bank best suited for our business, so we will be opening a business account with TransferWise today. However, TransferWise will not let me open a personal account as I'm not 18 yet. Do you guys have any recommendations for me opening a personal account in a bank, preferably and online one?

Thank you for all your answers. (@Cetme308win, your advice was spot on, and that's why I talked to banks before incorporating. TransferWise will allow a business account, but not a personal one on my name)

Opening a TransferWise account for your Wyoming LLC will require you to obtain an EIN and appoint an adult officer or employee, who will then open the account on behalf of the company.

If that adult is a US person with an SSN, he/she might even be able to open an account at big banks like Bank of America physically at a branch.

AFAIK no bank/EMI is the US will allow a minor to open an account on its own. Parental consent is required. If you just need a personal account anywhere, look into Monzo and Starling in the UK, both has an age limit of 16. The Business TransferWise account can them pay or receive money (in pounds) to your account.

That’s also the reason why I suggest opening a UK limited company in my previous post. You can do everything, including formation, accounting and banking, on your own. The banks/EMIs that allow companies own by minors don’t work with US persons or entities unfortunately.
 
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Opening a TransferWise account for your Wyoming LLC will require you to obtain an EIN and appoint an adult officer or employee, who will then open the account on behalf of the company.

If that adult is a US person with an SSN, he/she might even be able to open an account at big banks like Bank of America physically at a branch.

AFAIK no bank/EMI is the US will allow a minor to open an account on its own. Parental consent is required. If you just need a personal account anywhere, look into Monzo and Starling in the UK, both has an age limit of 16. The Business TransferWise account can them pay or receive money (in pounds) to your account.

That’s also the reason why I suggest opening a UK limited company in my previous post. You can do everything, including formation, accounting and banking, on your own. The banks/EMIs that allow companies own by minors don’t work with US persons or entities unfortunately.

I currently do not have an EIN, so I contacted TransferWise two days ago and they asked me to enter 11111111 instead of the EIN number to activate the account. However, this might lead them to asking me for additional documents as proof that the business is actually registered.

As you suggested, I visited both Starling and Monzo's websites, but the issue is that I need to be a UK resident to open up a personal account with them, which I am not. So if you have any other recommendations of EINs/Banks for me to open a personal account, do let me know.

Thank you again for your wonderful suggestions. They truly help a lot. Now I realize why I should've opened up a UK limited company.
 
I currently do not have an EIN, so I contacted TransferWise two days ago and they asked me to enter 11111111 instead of the EIN number to activate the account. However, this might lead them to asking me for additional documents as proof that the business is actually registered.

As you suggested, I visited both Starling and Monzo's websites, but the issue is that I need to be a UK resident to open up a personal account with them, which I am not. So if you have any other recommendations of EINs/Banks for me to open a personal account, do let me know.

Thank you again for your wonderful suggestions. They truly help a lot. Now I realize why I should've opened up a UK limited company.

I advise against putting in an incorrect EIN. Obtaining an EIN is very easy, just call the IRS or mail in the form. On the form, you will be asked to supply a SSN. I don’t know where you’re from, but if you’re not from the US and doesn’t have a SSN, write the word “FOREIGN” in place of the SSN.

What I am most concerned about your setup is foreign reporting. If you’re not a US resident, you need to properly file 1040NR, 1120 and 5472 every year with IRS. There is a $25k fine for non compliance.

Regarding personal bank account, I think the best choice is to open one in your home country. Might need parental approval. It should work seamlessly with your TransferWise business account, unless your country have capital control.

Monzo doesn’t check your address so technically you can get away with using a rented address.

I was a teenage entrepreneur myself, so it’s an area that I always look into till this day, hope it helped :)
 
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I advise against putting in an incorrect EIN. Obtaining an EIN is very easy, just call the IRS or mail in the form. On the form, you will be asked to supply a SSN. I don’t know where you’re from, but if you’re not from the US and doesn’t have a SSN, write the word “FOREIGN” in place of the SSN.

What I am most concerned about your setup is foreign reporting. If you’re not a US resident, you need to properly file 1040NR, 1120 and 5472 every year with IRS. There is a $25k fine for non compliance.

Regarding personal bank account, I think the best choice is to open one in your home country. Might need parental approval. It should work seamlessly with your TransferWise business account, unless your country have capital control.

Monzo doesn’t check your address so technically you can get away with using a rented address.

I was a teenage entrepreneur myself, so it’s an area that I always look into till this day, hope it helped :)

Ok, I'll be applying for an EIN.

However, TransferWise just rejected our account opening, saying that I can not have any control of the business account since I am not 18 years of age yet. Only my business partner can have access to that account. Even though I completely trust my partner, we would have appreciated if we both had equal access to the business founds. I am stuck now and it seems impossible to have any control of my business funds. If you still have ideas to bypass this, I would really appreciate the help.

As you suggested, I'll look into opening a personal account in my home country.

Regarding the filing of 1040NR, 112 and 5472, I will make sure they are filed, and I am also scheduled to talk to tax consultants in the US.

Thank you once again!
 

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