I need help with my situation

[leitholdnewlands]

Hello everyone!

I would like to come to you because I would like to ask for advice with my case.

I am currently living in a Latin American country and I am generating more than 50k usd monthly. I have a net worth of over 1md and would like to know if there is a possibility to avoid taxes.

I am thinking of creating an offshore company in the British Virgin Islands through an agency, but I do not know if this will work or have a bank account there to pass all my money and start receiving payments from my clients in my new bank account and not in my country of origin. I do not plan to move from my country, but I would like to know if there is any way to avoid taxes by having my agency outside my country.

Thanks for your help!

 

[Martin Everson]

Tax avoidance is never a good idea and always advised against by myself. There are banks that are not part of CRS in Puerto Rico like ItalBank that offer South American clients accounts. If used with a BVI company then it would be your responsibility to report tax owed and be compliant.

https://www.italbank.com/en/
P.S If your earning 50k a month then move to a tax free country for now and save taxes that way.

 

[user9823671]

You say you are "living" in a South American country? Is that the country of your birth? Are you resident? Citizen? Which country?

If your citizenship is of another country (what passport do you have) which country.

As to your funds, how are they generated? In the country you are living in? Via the internet? If internet how? paypal, payment systems, crypto, bank transfers etc. Are any customers from the country you are living in? where are they mostly from?

And finally, do you want to be 100% legal (i.e. declaring any offshore company to the country you live in / are resident in / are citizen from).


That all said, if you are making $50k a month (revenue or profit?) and have other a million dollars, why are you not paying for expert advice regarding your exact solution, as opposed to trying to get information for free? I can understand checking any information you have received, but usually paying for professional advice is usually the best if you want a tight setup and keep on the right side of the law.


Chances are however, if you want to be 100% legal, then your country will have CFC laws or permanent establishment, which means are work you perform in that country as a resident / citizen is taxable by them. Using local lawyers / tax advisors can help reduce that bill and they will know the specifics of that country better than anyone. Simply opening an offshore business / bank account does not work in 2021 (generally). But with more details, people can give you better bespoke advice and perhaps some options to consider.

 

[jjrapy]

You say you are "living" in a South American country? Is that the country of your birth? Are you resident? Citizen? Which country?

If your citizenship is of another country (what passport do you have) which country.

As to your funds, how are they generated? In the country you are living in? Via the internet? If internet how? paypal, payment systems, crypto, bank transfers etc. Are any customers from the country you are living in? where are they mostly from?

And finally, do you want to be 100% legal (i.e. declaring any offshore company to the country you live in / are resident in / are citizen from).


That all said, if you are making $50k a month (revenue or profit?) and have other a million dollars, why are you not paying for expert advice regarding your exact solution, as opposed to trying to get information for free? I can understand checking any information you have received, but usually paying for professional advice is usually the best if you want a tight setup and keep on the right side of the law.


Chances are however, if you want to be 100% legal, then your country will have CFC laws or permanent establishment, which means are work you perform in that country as a resident / citizen is taxable by them. Using local lawyers / tax advisors can help reduce that bill and they will know the specifics of that country better than anyone. Simply opening an offshore business / bank account does not work in 2021 (generally). But with more details, people can give you better bespoke advice and perhaps some options to consider.

Great answer. Hope OP to answer all the questions and have a better understanding of the situation.

 

[leitholdnewlands]

You say you are "living" in a South American country? Is that the country of your birth? Are you resident? Citizen? Which country?

If your citizenship is of another country (what passport do you have) which country.

As to your funds, how are they generated? In the country you are living in? Via the internet? If internet how? paypal, payment systems, crypto, bank transfers etc. Are any customers from the country you are living in? where are they mostly from?

And finally, do you want to be 100% legal (i.e. declaring any offshore company to the country you live in / are resident in / are citizen from).


That all said, if you are making $50k a month (revenue or profit?) and have other a million dollars, why are you not paying for expert advice regarding your exact solution, as opposed to trying to get information for free? I can understand checking any information you have received, but usually paying for professional advice is usually the best if you want a tight setup and keep on the right side of the law.


Chances are however, if you want to be 100% legal, then your country will have CFC laws or permanent establishment, which means are work you perform in that country as a resident / citizen is taxable by them. Using local lawyers / tax advisors can help reduce that bill and they will know the specifics of that country better than anyone. Simply opening an offshore business / bank account does not work in 2021 (generally). But with more details, people can give you better bespoke advice and perhaps some options to consider.

Thank you for your response!

Well, I'm really in the process of getting personalized information with expert agents on the subject, but I wanted to take a look at this forum because I've noticed that you know too much on this. I thank you for responding.

I currently live in mexico, I am a resident here, I have a passport but I have nothing to do with another country. Most of my clients are from USA and the payments are usually by Wise in most cases and by crypto some times.

In a few words, I only do web development as a freelancer, I send payment accounts and I get paid by Wise. Then, I send the money I have in Wise to my local bank account.

I have the money spread over a few local bank accounts, about 4-5.

That's what I can tell you. In that case, I don't really know what to do, I wouldn't want the state to take a lot of money from me, but I don't want to be illegal. Maybe some way to avoid taxes, but I wouldn't want to have to travel to another country.

Tax avoidance is never a good idea and always advised against by myself. There are banks that are not part of CRS in Puerto Rico like ItalBank that offer South American clients accounts. If used with a BVI company then it would be your responsibility to report tax owed and be compliant.

https://www.italbank.com/en/
P.S If your earning 50k a month then move to a tax free country for now and save taxes that way.

I guess then I don't know what I was thinking or I'm too new at this, sorry. I thought that by opening a company in BVI I could have a bank account there and send all my money there to avoid taxes, without having to go live somewhere else and have my clients pay me through Wise and from Wise send to the bank account in the BVI, but it's not that easy is it?

Great answer. Hope OP to answer all the questions and have a better understanding of the situation.

Thank you for your participation!

Above I answered the questions you asked me. I would like to know your opinion.

 

[cinquepalli]

Hey man slightly off topic - but how do you net $50k a month as web developer (remote and not living in the bay area nevertheless)?
Do you get multiple clients and outsource your work or have a very specific skillset that is next to impossible to find?

 

[Suzy Emerald]

I would trust Wise more with my money than mx banks. I assume you maintain mx pesos in your local accounts. Mx president is tightening the net he says on money flows frlm abroad. These would be 3 additional reasons to set something up abroad.

Boslil bank works fine in your region. Just figure out what company they accept. And use an introducer since their KYc is a bit a pain.

 

[Martin Everson]

I guess then I don't know what I was thinking or I'm too new at this, sorry. I thought that by opening a company in BVI I could have a bank account there and send all my money there to avoid taxes, without having to go live somewhere else and have my clients pay me through Wise and from Wise send to the bank account in the BVI, but it's not that easy is it?

No its not that easy.

 

[user9823671]

Thank you for your response!

Well, I'm really in the process of getting personalized information with expert agents on the subject, but I wanted to take a look at this forum because I've noticed that you know too much on this. I thank you for responding.

I currently live in mexico, I am a resident here, I have a passport but I have nothing to do with another country. Most of my clients are from USA and the payments are usually by Wise in most cases and by crypto some times.

In a few words, I only do web development as a freelancer, I send payment accounts and I get paid by Wise. Then, I send the money I have in Wise to my local bank account.

I have the money spread over a few local bank accounts, about 4-5.

That's what I can tell you. In that case, I don't really know what to do, I wouldn't want the state to take a lot of money from me, but I don't want to be illegal. Maybe some way to avoid taxes, but I wouldn't want to have to travel to another country.

I don't know about Mexico for CFC / PE laws. But I imagine as you performing the work there, any work you do is taxable by them (as this is basically the case everywhere). If you want to be 100% legal, then you cannot get around this and you only option is to speak to local tax advisors on how to reduce your Mexican taxes

I guess then I don't know what I was thinking or I'm too new at this, sorry. I thought that by opening a company in BVI I could have a bank account there and send all my money there to avoid taxes, without having to go live somewhere else and have my clients pay me through Wise and from Wise send to the bank account in the BVI, but it's not that easy is it?

If this was the case, then everyone would do it and no one would pay taxes. Basically countries have laws that say, regardless of where the company is registered, *IF* the work is carried out in their country, the company is basically a local company. So your BVI company would be seen as a Mexican company by Mexico as you perform your work in Mexico. But now you have the extra problems of explaining / reporting your BVI company as a Mexican company.

Now you don't "have" to report the company, but that is illegal and the risk is, Mexico finds out some way anyway (how likely depends on country / setup and amounts).

 

[GPT]

Tax avoidance is never a good idea and always advised against by myself.

Nothing wrong with “avoidance”. “Evasion” however is a different story. That is seen as a criminal offense in many countries.

One or another form of avoidance is still possible in most options.

 

[blizz]

One or another form of avoidance is still possible in most options.

Mentor group gold is the place to discuss such matters

 

[GPT]

Mentor group gold is the place to discuss such matters

No thank you

 

[Secure]

Hey man slightly off topic - but how do you net $50k a month as web developer (remote and not living in the bay area nevertheless)?
Do you get multiple clients and outsource your work or have a very specific skillset that is next to impossible to find?

I think he's into web development and bug bounty, this are the skills that pay more in this ages

 

[BEALMAN]

Most large corporations pay little or no taxes. They aren't doing anything illegal but simply using the current tax laws and the exceptions and exemptions allowed under the law. Many times, tax advisors and others can't interpret the laws/rules. You can consult with the tax collecting entity if necessary for any questions you may have regarding their laws. Be sure you note who and when you spoke with. From my personal experience...

 

[freegeek]

This question pops up all the time and the answer is pretty simply. If you are living in country A, have a business in country A and are tired of the taxes of country A then the only good and legal solution to lower your taxes is to move to another country that has LOWER taxes. All these 'SOLUTIONS' where you stay in country A and setup offshore structures will cause you trouble

 

[Silvio]

Most large corporations pay little or no taxes. They aren't doing anything illegal but simply using the current tax laws and the exceptions and exemptions allowed under the law. Many times, tax advisors and others can't interpret the laws/rules. You can consult with the tax collecting entity if necessary for any questions you may have regarding their laws. Be sure you note who and when you spoke with. From my personal experience...

Large company have the ability to establish substance in any country - office, employees, etc and can afford complex & expensive structures which don't make sense financially for small entrepreneurs. What large multinationals do does not apply to normal people. Tax offices don't care about you and won't afford you the same flexibility it affords to big multinationals (and even Google\FB sometimes get fucked by some tax offices that don't accept their tricks)

This question pops up all the time and the answer is pretty simply. If you are living in country A, have a business in country A and are tired of the taxes of country A then the only good and legal solution to lower your taxes is to move to another country that has LOWER taxes. All these 'SOLUTIONS' where you stay in country A and setup offshore structures will cause you trouble

100%, this applies to almost every 2nd thread here. Move to a low tax country or live in fear

 

[GPT]

This question pops up all the time and the answer is pretty simply. If you are living in country A, have a business in country A and are tired of the taxes of country A then the only good and legal solution to lower your taxes is to move to another country that has LOWER taxes. All these 'SOLUTIONS' where you stay in country A and setup offshore structures will cause you trouble

Hitting the nail on the head.

 

[uplana]

Large company have the ability to establish substance in any country - office, employees, etc and can afford complex & expensive structures which don't make sense financially for small entrepreneurs. What large multinationals do does not apply to normal people. Tax offices don't care about you and won't afford you the same flexibility it affords to big multinationals (and even Google\FB sometimes get fucked by some tax offices that don't accept their tricks)


100%, this applies to almost every 2nd thread here. Move to a low tax country or live in fear

I do agree with this comment. It's hard to hide from the tax auth. these days. Anyway, that said you have options depending on how much you have in your wallet, with plenty of money you will find solutions.

 

[Meliss]

1. Tax evasion is bad and illegal, tax avoidance sounds fishy, but 'tax optimization' sounds much like what the multinationals legally do
2. I'm not aware of any legal way of not paying taxes. But you might be able to pay less, if what you are doing is a legit activity. How much tax do you pay now and would paying 6-10% tax on your annual turnover be a better solution for you?

 

[uplana]

Relocate to Switzerland if you have sufficient with money, you can find cantons where you pay only 5% tax or even less.

There are other opportunities like Malta, Bulgaria, Cyprus etc. which are all discussed here on offshorecorptalk many times already.