Legal responsibility when working as an "offshore" advisor

[anotherone]

I am interested in becoming an advisor for people who are looking for tax optimization, setting up companies and using EMI's. However, I wonder if I could be exposed from a legal point of view by selling this information as a service. I wonder if I could be legally in trouble if I would provide information about tax, jurisdictions, banking and EMI's against a fee. I am not a lawyer an attorney.

Many people ask me to provide information about jurisdictions and taxes in different countries. I have already set up companies in Belize, Netherlands, Ireland, Estonia, Latvia UK, Cyprus for myself.

I want to make it a business because I saw many scams around the world. I noticed that many offshore service providers were scammers. I have met many accountants and lawyers who scammed people. The number one danger in this business aren't the tax authorities or the laws of the countries. The number one danger are the service providers who want to steal your money. So, I told myself, it would be great to create a neutral service that is not related to any jurisdiction in particular to advise entrepreneurs and CEO who want to incorporate a company.


Some examples:
In Latvia, the service provider wanted me to sign a bookkeeping contact where they would earn a commission from my revenue.
In Latvia, I have paid a 1200 euros to wind the company. All the law firms were overpriced because I was a foreign person. Latvia average salary was 700 euros per month at the time.
In the Netherlands, I paid 2500 euros to a chartered accountant as I wanted information about the dutch tax system. I could have obtained this information online.
I also lost 2500 euros by ordering SFM offshore a company incorporation in seychelles.
In Ireland, it was a mess. The service provider answered my emails every 2 weeks. I hired a new service provider. The new one had no digital certificate to login in to the irish revenue online.

It is important to say that the issue was not widespread. I was never scammed by Belize service providers, Estonian virtual offices, Uk virtual offices. People in Cyprus were the best in terms of understanding, professionalism.
But This business is a tank full of sharks.

However, I didn't start doing this business because there is a risk of being sued by a former customer who is upset because he is under tax investigation or sued because of his company set up. I can see the bitcoin lovers of this forum who would raise their hand and say: "create an anonymous business online and get paid in bitcoins. On the other end, your company is legit cause you are a business advisor. The bitcoin protects your business".

What do you think?

 

[Sols]

If you offer someone tax or legal advice, you can be held liable and legally responsible. If a client follows your advice and suffer damages as a result, they can take you to court. No guarantee they will win but even if they don't, you're still looking at time and money wasted on defense.

If you get too involved in a client's business and that business turns out to be unlawful, you're exposing yourself to charges under tax evasion, money laundering, or worse (trafficking, narcotics, the list goes on).

So make sure you don't offer tax or legal advisory and otherwie get too involved in what clients do. Perform KYC and have a semblance of AML procedures even if you aren't strictly regulated. Structure everything you do in a way so that nothing sticks to you.

 

[Camille Württemberg]

I am interested in becoming an advisor for people who are looking for tax optimization, setting up companies and using EMI's. However, I wonder if I could be exposed from a legal point of view by selling this information as a service. I wonder if I could be legally in trouble if I would provide information about tax, jurisdictions, banking and EMI's against a fee. I am not a lawyer an attorney.

Many people ask me to provide information about jurisdictions and taxes in different countries. I have already set up companies in Belize, Netherlands, Ireland, Estonia, Latvia UK, Cyprus for myself.

I want to make it a business because I saw many scams around the world. I noticed that many offshore service providers were scammers. I have met many accountants and lawyers who scammed people. The number one danger in this business aren't the tax authorities or the laws of the countries. The number one danger are the service providers who want to steal your money. So, I told myself, it would be great to create a neutral service that is not related to any jurisdiction in particular to advise entrepreneurs and CEO who want to incorporate a company.


Some examples:
In Latvia, the service provider wanted me to sign a bookkeeping contact where they would earn a commission from my revenue.
In Latvia, I have paid a 1200 euros to wind the company. All the law firms were overpriced because I was a foreign person. Latvia average salary was 700 euros per month at the time.
In the Netherlands, I paid 2500 euros to a chartered accountant as I wanted information about the dutch tax system. I could have obtained this information online.
I also lost 2500 euros by ordering SFM offshore a company incorporation in seychelles.
In Ireland, it was a mess. The service provider answered my emails every 2 weeks. I hired a new service provider. The new one had no digital certificate to login in to the irish revenue online.

It is important to say that the issue was not widespread. I was never scammed by Belize service providers, Estonian virtual offices, Uk virtual offices. People in Cyprus were the best in terms of understanding, professionalism.
But This business is a tank full of sharks.

However, I didn't start doing this business because there is a risk of being sued by a former customer who is upset because he is under tax investigation or sued because of his company set up. I can see the bitcoin lovers of this forum who would raise their hand and say: "create an anonymous business online and get paid in bitcoins. On the other end, your company is legit cause you are a business advisor. The bitcoin protects your business".

What do you think?

It depends where you live. If you live in the UK for example, you need to be supervised by a regulator and you are extremely limited in what types of advise you can give.

Offshore advisory is a complex business as most of it is managed by the top 4 auditing firms.

 

[bigsmoke]

Offshore advisory is a complex business as most of it is managed by the top 4 auditing firms.

What are the names of those 4 firms?

 

[Camille Württemberg]

What are the names of those 4 firms?

Big Four accounting firms - Wikipedia

 

[anotherone]

What are the names of those 4 firms?

Kpmg - pwc - Deloitte - Ernst and young.
They have set up ALL the biggest tax optimization plans of the major companies.

 

[Ricardo]

I am interested in becoming an advisor for people who are looking for tax optimization, setting up companies and using EMI's. However, I wonder if I could be exposed from a legal point of view by selling this information as a service. I wonder if I could be legally in trouble if I would provide information about tax, jurisdictions, banking and EMI's against a fee. I am not a lawyer an attorney.

Many people ask me to provide information about jurisdictions and taxes in different countries. I have already set up companies in Belize, Netherlands, Ireland, Estonia, Latvia UK, Cyprus for myself.

I want to make it a business because I saw many scams around the world. I noticed that many offshore service providers were scammers. I have met many accountants and lawyers who scammed people. The number one danger in this business aren't the tax authorities or the laws of the countries. The number one danger are the service providers who want to steal your money. So, I told myself, it would be great to create a neutral service that is not related to any jurisdiction in particular to advise entrepreneurs and CEO who want to incorporate a company.


Some examples:
In Latvia, the service provider wanted me to sign a bookkeeping contact where they would earn a commission from my revenue.
In Latvia, I have paid a 1200 euros to wind the company. All the law firms were overpriced because I was a foreign person. Latvia average salary was 700 euros per month at the time.
In the Netherlands, I paid 2500 euros to a chartered accountant as I wanted information about the dutch tax system. I could have obtained this information online.
I also lost 2500 euros by ordering SFM offshore a company incorporation in seychelles.
In Ireland, it was a mess. The service provider answered my emails every 2 weeks. I hired a new service provider. The new one had no digital certificate to login in to the irish revenue online.

It is important to say that the issue was not widespread. I was never scammed by Belize service providers, Estonian virtual offices, Uk virtual offices. People in Cyprus were the best in terms of understanding, professionalism.
But This business is a tank full of sharks.

However, I didn't start doing this business because there is a risk of being sued by a former customer who is upset because he is under tax investigation or sued because of his company set up. I can see the bitcoin lovers of this forum who would raise their hand and say: "create an anonymous business online and get paid in bitcoins. On the other end, your company is legit cause you are a business advisor. The bitcoin protects your business".

What do you think?

I was thinking of doing the same thing today. What do you think about sharing your contact with me to talk about?

 

[onemansomewhere]

Services which you want to offer are reserved for lawyers and financial professionals. You will ned a license to operate this type of activities in countries, where your clients are. Usualy a license in any EU country is valid in all EU countries.

 

[JustAnotherNomad]

How much can they regulate you if you have no physical presence in those countries?
Say you’re located in Panama: Would the EU be able to regulate you, only because you have EU clients?

 

[anotherone]

How much can they regulate you if you have no physical presence in those countries?
Say you’re located in Panama: Would the EU be able to regulate you, only because you have EU clients?

In this case, they would have to issue an Interpol notice but it would only be transferred if the committed crime is worth +2 years in prison. Then, once in Panama, the crime should be in the panamean law, otherwise the local panamean judge will dismiss it.

 

[JustAnotherNomad]

But would it be a crime if you offer tax advice without encouraging anyone to break the law?
I strongly doubt it.

Say you live in some country where medicine isn’t regulated and you make a website (hosted in that country) about alternative cancer treatment. Someone from the EU calls you for advice on how to treat their cancer and you say they should drink herbal tea and pray, refuse chemotherapy. That person dies and the relatives sue you.
In the EU, this would clearly be illegal since you don’t have a medical license. But in your own country, it’s not. Maybe they could sue for damages, but certainly you wouldn’t be into jail for violating some other country’s laws?
Otherwise you wouldn’t be able to serve any customers from abroad without getting legal advice for each and every country.

To give a simpler example: Now there was this new EU directive that will require tax advisors to report “aggressive tax planning” to their local authorities. I think most of the typical “offshore” advisors have already explained that once that EU directive has been transposed into national law, they will move outside the EU and continue to offer their services from there.

Of course I wouldn’t be surprised if countries like the US simply said, we don’t care, if you set foot on US soil, we will still arrest you for something that was legal in your own country. But I don’t think EU countries would go to such lengths. Or would they?

 

[anotherone]

But would it be a crime if you offer tax advice without encouraging anyone to break the law?
I strongly doubt it.

Say you live in some country where medicine isn’t regulated and you make a website (hosted in that country) about alternative cancer treatment. Someone from the EU calls you for advice on how to treat their cancer and you say they should drink herbal tea and pray, refuse chemotherapy. That person dies and the relatives sue you.
In the EU, this would clearly be illegal since you don’t have a medical license. But in your own country, it’s not. Maybe they could sue for damages, but certainly you wouldn’t be into jail for violating some other country’s laws?
Otherwise you wouldn’t be able to serve any customers from abroad without getting legal advice for each and every country.

To give a simpler example: Now there was this new EU directive that will require tax advisors to report “aggressive tax planning” to their local authorities. I think most of the typical “offshore” advisors have already explained that once that EU directive has been transposed into national law, they will move outside the EU and continue to offer their services from there.

Of course I wouldn’t be surprised if countries like the US simply said, we don’t care, if you set foot on US soil, we will still arrest you for something that was legal in your own country. But I don’t think EU countries would go to such lengths. Or would they?

The legal framework is always territorial and this is why the world is great. For example, Panama does not apply the chinese laws on its ground. I can tell you that EU parliament and the EU commission are powerless. In the pass, I had a problem with a french bank in a cross border transfer. I saw that a EU organization could do something for me. I have contacted them. They answered. "there is nothing we can do, we can't enforce any EU laws, contact the french bank regulation organization".
The EU is a laugh. There is not European police.
In terms of agressive tax planning, I think that there are no that much they can do when you don't have a presence in the country where your customers are located.

I have read the newspapers and found that the people who have arrested in Europe for tax evasion were people who helped business owners to open bank account or incorporate a company. On the other hand, none of them were tax advisor. It is like for prostitution. If you write that prostitution is great in the netherlands, nobody can sue you. Conversely, if you publish the personal details of an escort in the Netherlands, you become an intermediary and you do procuring. It is criminal.
The difference does not seems to be big but it is huge. It is the difference between freedom and Jail.
For example, if you give detailed tax information about Ireland, Netherlands, Cyprus, I don't see how you can be sued. That's the way you present the things that makes the difference.

 

[JustAnotherNomad]

Obviously it would have to be an EU member state, the EU itself only decides on directives that still have to be implemented into national laws.

I don’t understand the prostitution example. You mean people had a presence in e.g. France and helped French residents register companies in e.g. Panama? Or somebody helped them from their office in Panama? Certainly the latter can’t be illegal?

 

[onemansomewhere]

It is funny how non lawyers just write without having a basic knowledge, here..

Let say, you live in Panama. If you will provide legal advise to someone, let say in Latvia, and your customer will be not satisfied with your service and will inform a cirminal police, criminal police will start investigation in Latvia based on latvian law and latvian judge will issue arrest warant base on latvian law. Whereas Latvia has a extradition treaty with a Panama, Panama will arrest you and send you to Latvia. You will be found guilty in Latvia for providing regulated profession activity without needed permision and you will spend few years in a prison.

And it is absolutely exactly the same allwhere. If you provide legal services to country where you do not have a legal permition to do so, investigation will be done by local authorities in a country where is your client. Not in a country, where you live. Based on international law, legal services and financial adviros services place of provision of service is place where customer resides. So criminal offence happens in a country where customer resides.

If you think, that your country will not extradite you, you can be right. But it will mean no travelling out of your country for the rest of your life..

If you live in Brazil and you do not intend to leave a country any more, you can commit crime in any other country remotely. Extradition is not allowed by brazilian constitution..

 

[JustAnotherNomad]

My question was just that: Is it a criminal offense to provide advice remotely?
When you don’t even claim to be licensed and you don’t even advertise for that country specifically?
If I as a Belgian resident call a Panamanian tax lawyer and ask about Belgian taxes and he gives me advice, though he is not licensed in Belgian tax law, will Belgian authorities try to get him arrested? I seriously doubt that. But I also don’t know.
I would actually think that they will say that the Belgian law does not apply to someone living and working in Panama. Provided of course that he did not help break the law (“here’s how you avoid reporting”), but only gave legal advice, though potentially incorrect.

 

[onemansomewhere]

My question was just that: Is it a criminal offense to provide advice remotely?
When you don’t even claim to be licensed and you don’t even advertise for that country specifically?
If I as a Belgian resident call a Panamanian tax lawyer and ask about Belgian taxes and he gives me advice, though he is not licensed in Belgian tax law, will Belgian authorities try to get him arrested? I seriously doubt that. But I also don’t know.
I would actually think that they will say that the Belgian law does not apply to someone living and working in Panama. Provided of course that he did not help break the law (“here’s how you avoid reporting”), but only gave legal advice, though potentially incorrect.

Any serious panamian lawyer will deny your request for any advice about Belgium law. Belgian resident can call a panamian lawyer and ask advise about panamian law. But can not ask advise about belgium law. Providing a legal advise about belgium law by panamian lawyer - belgium authorities can consider it to be illegal.
Any lawyer and any financial advisor has to ask you some questions to determin if they can help you legally..

 

[JustAnotherNomad]

Granted, it was a bad example.
What I meant was: You are doing something in country A that is not illegal in country A. You offer the services remotely to a client in country B. You do not explicitly advertise to clients from that country. You are honest, you don’t pretend you are licensed in country B or anything, you don’t give advice how to break the law. You only offer a service that would be perfectly legal in country B. However, in country B, giving such services would require a license. Which you don’t have, but which country A also does not require.

I don’t see how that could be a criminal offense?
To give another (probably equally bad) example: In Switzerland, “assisted suicide” is legal. In many other countries, a doctor would go to jail. If a terminally sick person from Poland (I have no idea if it is illegal there, let’s assume it is) goes to Poland and a Swiss doctor in a Swiss clinic kills them with a deadly injection - can Polish authorities investigate the doctor for murder?
And that is probably even a more extreme example because murder actually is a felony everywhere. “Giving advice without a license” obviously isn’t in the same category - unless you scam people, of course.
You get the idea...

 

[anotherone]

Let me tell you what I think about lawyers. In the past, I was scammed by lawyers too in several countries (estonia and Netherlands). I paid a lot of money for consultancy (2500 euros in estonia and 2500 euros in the netherlands). For this price, I had only generic information (that is available in the estonian law and dutch law). At that point I stopped spending my money in lawyers because I understood that in the end as a business owner, I was not protected by lawyers. In the beginning, I thought I was protected and in the end, I understood that I was the only one to be legally responsible. So, if someday something would go wrong, I would be the only to get prosecuted.

So, I understood that the lawyers could be part of the scammers too. If you read the comments about law agency on google maps in tallinn estonia, you will understand what I mean.

Lawyers can be thugs too and they should not be trusted. ​

Let me give you another example: If I publish a book with all corporate tax from all over the world? Will I get prosecuted? no. I have contributed to a wikipedia page with corporate taxes, I am not going to get prosecuted. I think it depends on the way you present your service.

If you sell generic information sheets to people in different countries, you will not get prosecuted because there would be no link between me and the customer. Also, I think about andrew henderson, the guy of nomad capitalist. He never got sued since he started his offshore consultancy business.

 

[JustAnotherNomad]

I wouldn’t worry much about getting sued.
You can put in your agreements that the courts of Panama (or wherever you are located) apply, where it would be really difficult for someone to get to you. You could probably use a trust or some other structure to protect you further.

I would worry about other things:
1. Criminal prosecution for either aiding and abetting to tax evasion, ML/TF, or giving legal advice without the required licenses (but like I said, I am skeptical that the latter would be an issue - but I’m not sure)
2. The kind of people you meet

About 2: I see a risk that your clients could be criminals or other kinds of shady people who, if unhappy for whatever reason, might try to get back at you in other ways. Either physical violence and threats against you, or spreading false rumors about you, stuff like that.
I’m not sure how much of an issue the latter is. Maybe you can filter out such clients in advance. Maybe it’s not really so much of an issue as there are many offshore advisors in this forum and they seem to be doing just fine.

About Andrew Henderson:
He’s not an advisor. He’s a blogger and affiliate marketer like many others. What these people do is say “For your case, you could set up a company in Hong Kong and then get residency in Georgia. Let me connect you with my partners.”
Then he gets paid a commission and the lawyers are the ones legally responsible.