looking for advice on how to pay yourself from an offshore company

[nomad999]

Anyone could provide some insight on the best way to pay yourself a salary or anything from your own offshore company ? ideally a one time payment.
The purpose would be to get a tax return to claim tax residency, let's talk generally what would apply in most countries.

Would an invoice for consulting fees without much details would be enough or perhaps director fees ? what could be considered suspicious and raise a red flag ?
I would rather not disclose I am a director at that company as technically they could claim PE of the company if there is no "substance" anywhere.

Anyone with actual experience doing this ? Does the tax administration gave you any trouble ?

 

[Helkins]

You can just send a transfer titled "salary payment for X period", usually that's all. Just in case you can draft a contract signed by whoever stamped by the offshore company and presented to the authorities if asked

 

[fshore]

Anyone could provide some insight on the best way to pay yourself a salary or anything from your own offshore company ? ideally a one time payment.
The purpose would be to get a tax return to claim tax residency, let's talk generally what would apply in most countries.

Would an invoice for consulting fees without much details would be enough or perhaps director fees ? what could be considered suspicious and raise a red flag ?
I would rather not disclose I am a director at that company as technically they could claim PE of the company if there is no "substance" anywhere.

Anyone with actual experience doing this ? Does the tax administration gave you any trouble ?

From what country do you want to get a tax return, the offshore country?

If you receive salary for work performed in another country for a period over 6 months then the offshore company probably have a PE in the other country.

 

[nomad999]

From what country do you want to get a tax return, the offshore country?

Nop, I want to claim tax residency in a low tax country and use my offshore corp to pay myself a salary on which I would pay taxes in order to get a tax return,
A tax return can serve as proof of residency for banks and financial institutions and the DTA between that country and my country of nationality prevent the later from taxing my a*s.

If you receive salary for work performed in another country for a period over 6 months then the offshore company probably have a PE in the other country.

Yes but they have no way of knowing I owned the offshore company that pays me a salary.

 

[nomad999]

ok new idea :

Creating a ONshore company in the same country I want to be tax resident (territorial taxation country) for the purpose of paying myself a salary, pay personal taxes on that salary and get a tax return. Also paying some yearly fees for company accounting/tax filling.
The purpose would be to enjoy tax residency in a low tax country while showing my taxhell EU communist country a tax return in case they ask later (assuming DTA).

for this I would invest my personal money regularly in the company which would circle around every year and be used in like a bs 0.5% interest account or low return extremely safe etf/fund or whatever to show some kind of legit activity.

the yearly turnover at the bank would be :

Personal bank account A ->quaterly or so transfer-> corporate bank account ->-> Brokerage account ->monthly transfer-> Corporate bank account ->monthly transfer-> Personal bank account B

let's say there won't be more than 3-5 months worth of salary in the corporate bank account at any given time.

The total cost for this would be in the high 4 digits yearly including everything. The saving in taxes would be a solid 6 digits.

Would that fall under some kind of money laundering or something evil and bad to not do ? again talking generally aka an OECD compliant country (aka the world of tomorrow).

What do you think ? did I missed something important ? would the bank and broker instantly detect that and kick me out ?

 

[fshore]

Nop, I want to claim tax residency in a low tax country and use my offshore corp to pay myself a salary on which I would pay taxes in order to get a tax return,
A tax return can serve as proof of residency for banks and financial institutions and the DTA between that country and my country of nationality prevent the later from taxing my a*s.

What country do you have in mind? Normally you wouldn't get a tax return from the offshore company, and you might not be allowed to work in that country without a work permit, and you might have to pay social security and or taxes when locally employed.

 

[nomad999]

What country do you have in mind? Normally you wouldn't get a tax return from the offshore company, and you might not be allowed to work in that country without a work permit, and you might have to pay social security and or taxes when locally employed.

I want a tax return for me not for the corporation.
Pretty much any countries with territorial taxation and DTA with EU top 5, you control the salary you get so you can reduce your tax burden to the minimum.

Hmm good point with the work permit requirements, have to check that ... hey Labuan might work for my little setup !

 

[fshore]

I want a tax return for me not for the corporation.
Pretty much any countries with territorial taxation and DTA with EU top 5, you control the salary you get so you can reduce your tax burden to the minimum.

Hmm good point with the work permit requirements, have to check that ... hey Labuan might work for my little setup !

Sorry I meant you wouldn't get a tax return from being employed by the offshore Company.

Labuan could work but is expensive, and you'd need resident and work permit. It might be simpler to be employed by another company to get a tax return. Still from labuan/Malaysia you would only get tax resident certificate if you spend 180+ days.

What you're seeking is what a lot of other people is looking for, so maybe search around rather than to make everything from scratch yourself.

 

[nomad999]

Sorry I meant you wouldn't get a tax return from being employed by the offshore Company.

Labuan could work but is expensive, and you'd need resident and work permit. It might be simpler to be employed by another company to get a tax return. Still from labuan/Malaysia you would only get tax resident certificate if you spend 180+ days.

What you're seeking is what a lot of other people is looking for, so maybe search around rather than to make everything from scratch yourself.

Yes the 183 days requirements is not a problem for me.

Actually, the regular monthly salary would be a bonus in fact, I can do with only director's fee or dividend or whatever as long as I pay some taxes on it to get a tax return for the year.

Labuan could absolutely work and without the expansive substance requirements Since the company wouldn't have much corporate profit it doesn't matter if its taxed under Malaysia corporate tax (24%) instead of Labuan specific corp tax regime (3%), annual fees are a bit high but banking is a piece of cake. Pretty sure a director salary could work with high tax, will check with an accountant there.


What about my idea of moving money around I described above, anything nefarious from the banks perspective ? any idea ?

 

[Helkins]

Yes the 183 days requirements is not a problem for me.

Actually, the regular monthly salary would be a bonus in fact, I can do with only director's fee or dividend or whatever as long as I pay some taxes on it to get a tax return for the year.

Labuan could absolutely work and without the expansive substance requirements Since the company wouldn't have much corporate profit it doesn't matter if its taxed under Malaysia corporate tax (24%) instead of Labuan specific corp tax regime (3%), annual fees are a bit high but banking is a piece of cake. Pretty sure a director salary could work with high tax, will check with an accountant there.


What about my idea of moving money around I described above, anything nefarious from the banks perspective ? any idea ?

I think your idea of moving money is pretty good, there shouldn't be any issues really. Unless you're involved in some illegal activities you won't get in trouble for that.

 

[nomad999]

I think your idea of moving money is pretty good, there shouldn't be any issues really. Unless you're involved in some illegal activities you won't get in trouble for that.

awesome! thx, appreciate the feedback !

 

[clemens]

I agree, this is like it should be and can work.

 

[angrybear23]

Your plan is very good, can you share how everything went in the end? And why did you need the company's money anyway? I have a very similar situation to yours right now. However, I can definitely say right away why I need money, I want to buy myself a new car. Therefore, I decided that it is much easier and better to take money from my own company, which of course I will return over time. Or can I do something else in my situation? Of course, I'm not sure if this is possible at all, but if I buy a car as the property of the company, will I have the rights to use the car outside of work? In theory, I have all the necessary documents and information about the total income from such a service Paystub Generator | The Best Checkstub Maker Online in USA of course, I'm not sure that I will need them to buy a car.