Is this legal ? Transfer pricing with a Tax-exempt entity.

[Kilixos]

Hello everyone,

- I'm French Moroccan (two passports) and I moved to live in Morocco (current fiscal residence).
- I have a Tax-exempt company here in Morocco (no corporate taxes on foreign revenue for 4 years) - Dividend taxes 15%.
- Instead of invoicing my US/EU clients via the moroccan entity, I'm thinking about opening a LLC, LTD or FZE along with EMIs to invoice with , then do transfer pricing (moroccan entity will invoice the LLC/LTD...)
- 60-70% of revenue will be in Morocco and taxed accordingly at 15% as dividend

I could just use the moroccan entity but the reason is that moroccan banks are pain / expensive and will "force" you to pay 11% for every payment you want to make abroad (paying Facebook for example) but also, I want to develop the business and need to have an "international" entity.

1. What do you think about the setup ?
2. is it legal ? No substance in US/UK/UAE but can I create it with other passport to stay under the radar ?
3. What would be the best country to open the business in your opinion (according to Moroccan tax treaties)

Thanks in advance for you help

 

[fshore]

Not many here will know details about Moroccan transfer prising laws. But a US LLC is disregarded for tax in the US so if owned by the Moroccan company all profits would be applied to the Moroccan owner (from US side). Morocco might treat it differently and in worst case consider it Moroccan tax resident without tax incentives).