Looking to set up an offshore investment vehicle structure

[KDX]

Hi. I am very new to offshore and incorporating in any kind of jurisdiction in general.

I live in a very high tax country in the EU (Finland)

And I'm not sure but from what I've gathered, I could in theory set up an investment corporation/foundation or similar in an offshore jurisdiction with 0% capital gains and corporate tax
and then only get taxed when I withdraw from the company bank account?

Is this something anyone here has done? Is this a good idea?

I have been given some proposals like an offshore trust structure where a trust would own the company and I'd be the beneficiary but I'm not sure if that's 100% required
Also in terms of banking what kind of costs would I be looking at and can the bank be in e.g. Switzerland while the company would be in BVI or Seychelles, etc.?

I'm not looking for something with high costs involved or especially high annual fees

Also feel free to PM me with any kind of offer, quote etc. Or if you could recommend a great firm that could help me achieve this that would also be greatly appreciated!

 

[Martin Everson]

And I'm not sure but from what I've gathered, I could in theory set up an investment corporation/foundation or similar in an offshore jurisdiction with 0% capital gains and corporate tax
and then only get taxed when I withdraw from the company bank account?

Is this something anyone here has done? Is this a good idea?

Wouldn't thus run foul of Finnish CFC rules i.e being a non-genuine arrangement?

I have been given some proposals like an offshore trust structure where a trust would own the company and I'd be the beneficiary but I'm not sure if that's 100% required
Also in terms of banking what kind of costs would I be looking at and can the bank be in e.g. Switzerland while the company would be in BVI or Seychelles, etc.?

Would be impossible to bank such a structure in 2021 as a nobody unless for wealth management with a private bank or your a well known multinational company.


Your best bet is to relocate to a friendlier tax nation.

 

[KDX]

Wouldn't thus run foul of Finnish CFC rules i.e being a non-genuine arrangement?



Would be impossible to bank such a structure in 2021 as a nobody unless for wealth management with a private bank or your a well known multinational company.


Your best bet is to relocate to a friendlier tax nation.

That whole trust thing is not necessary which I kind of thought anyways. Setup would be legit but it would be taxed as income which could either be a great thing or a bad thing as its progressive. Also in regards to moving to a friendlier tax nation well maybe I'll just do that lol. Also do you think banks would be fine if it wasnt a trust structure? I'd be the director etc.

 

[Martin Everson]

Also do you think banks would be fine if it wasnt a trust structure? I'd be the director etc.

For a vanilla company it should be ok. But banking Trusts and Foundations is not easy in 2021 as I mentioned.

 

[CyprusLawyer101]

Hi. I am very new to offshore and incorporating in any kind of jurisdiction in general.

I live in a very high tax country in the EU (Finland)

And I'm not sure but from what I've gathered, I could in theory set up an investment corporation/foundation or similar in an offshore jurisdiction with 0% capital gains and corporate tax
and then only get taxed when I withdraw from the company bank account?

Is this something anyone here has done? Is this a good idea?

I have been given some proposals like an offshore trust structure where a trust would own the company and I'd be the beneficiary but I'm not sure if that's 100% required
Also in terms of banking what kind of costs would I be looking at and can the bank be in e.g. Switzerland while the company would be in BVI or Seychelles, etc.?

I'm not looking for something with high costs involved or especially high annual fees

Also feel free to PM me with any kind of offer, quote etc. Or if you could recommend a great firm that could help me achieve this that would also be greatly appreciated!

Hi,
To assess the feasibility of what you are thinking It greatly depends what is your intended operations, what you are selling, who are your clients etc. If you care to share more, then maybe we could shed some more light.

 

[KDX]

Hi,
To assess the feasibility of what you are thinking It greatly depends what is your intended operations, what you are selling, who are your clients etc. If you care to share more, then maybe we could shed some more light.

Just trading stock. Nothing more just to be able to trade without getting capital gains tax in between sales. Clients would be me

 

[CyprusLawyer101]

Just trading stock. Nothing more just to be able to trade without getting capital gains tax in between sales. Clients would be me

Well you need a jurisdiction which does not tax capital gains on stock trading, but when moving out to create such a structure, you need to consider potential exit taxes and future ezposure to CFC rules of Finland. A Cyprus company set up would work wonders for you, but you still need to consider any exit taxes and your exposure to CFC rules and other anti avoidance provisions. Let me know if I can help.

 

[Sols]

As long as you live in Finland, none of this will work or require very convoluted workarounds (many of which may work but aren't legal, so it's only a matter of time until the tax authority comes knocking). Any company or structure that you own, control, work for, or otherwise benefit from will itself become taxable in Finland, or at the very least any income that you derive from it (regardless of whether you receive it or not) is taxable in Finland.

As an indicator of how aggressive Finland is, Finland likes to tax non-residents who were former residents for a couple of years. The right course of action here is to relocate (such as Malta, Cyprus), but make sure you really cut your ties properly when you do.

 

[KDX]

As long as you live in Finland, none of this will work or require very convoluted workarounds (many of which may work but aren't legal, so it's only a matter of time until the tax authority comes knocking). Any company or structure that you own, control, work for, or otherwise benefit from will itself become taxable in Finland, or at the very least any income that you derive from it (regardless of whether you receive it or not) is taxable in Finland.

As an indicator of how aggressive Finland is, Finland likes to tax non-residents who were former residents for a couple of years. The right course of action here is to relocate (such as Malta, Cyprus), but make sure you really cut your ties properly when you do.

So basically eat it and get rid of tax residency? Finland doesn't tax as long as you don't reside there on a permanent basis, even with CFC it may be worth if after all if I get to have the flexibility of removing that status in the future because I'll probably move to another jurisdiction in the future anyways

 

[Sols]

So basically eat it and get rid of tax residency?

Yes. It should be easy to find Finnish lawyers to confirm this.

Finland doesn't tax as long as you don't reside there on a permanent basis

If you haven't already, double check that with a lawyer. I've seen cases where Finnish tax authority has gone after non-residents who for example keep close family (spouse, children), real estate, or business interest in Finland. Residence alone isn't enough, at least not for the first few years.

 

[KDX]

Well you need a jurisdiction which does not tax capital gains on stock trading, but when moving out to create such a structure, you need to consider potential exit taxes and future ezposure to CFC rules of Finland. A Cyprus company set up would work wonders for you, but you still need to consider any exit taxes and your exposure to CFC rules and other anti avoidance provisions. Let me know if I can help.

I'd be more than willing to get help. AFAIK exit taxes don't exist for Finland but CFC will definitely bite me in the a*s if the tax man cracks down on my little venture. I was also thinking of structuring where I'd setup some kind of operations in e.g. Ireland where tax is 12.5% (legal limit, Finland considers it a CFC if its less than 12% or 60% of Finnish corp. tax) Even with this, if I happen to drop to a certain income tax bracket it could be very much worth it and if I happen to move out in the future (very likely) then it will be even more worth it

Yes. It should be easy to find Finnish lawyers to confirm this.


If you haven't already, double check that with a lawyer. I've seen cases where Finnish tax authority has gone after non-residents who for example keep close family (spouse, children), real estate, or business interest in Finland. Residence alone isn't enough, at least not for the first few years.

Hmm. Will have to look more into that but as far as I'm informed, as long as you make it very clear to them that you are not gonna live there permanently and regarding family, that is not going to be an issue. 0 business interest in the family both financially and actual "interest". I did talk a bit to PwC but might get a proper consultation just to get a good idea of how things usually go

 

[AMD]

Finnish tax authority has gone after non-residents who for example keep close family (spouse, children), real estate,

Is that really true? Just because you live your children in Finland then they will not accept your relocation if you decide to leave them there maybe with some close family?

 

[KDX]

Is that really true? Just because you live your children in Finland then they will not accept your relocation if you decide to leave them there maybe with some close family?

Not sure if legally but I'd imagine this is something a group of Finnish people with authority would do. Very much the culture here, usually people with authority always go until the end to get their satisfaction of putting someone through hell in any way possible, plus anything dealing with criminal trials or courts will probably take around 5+ years minimum so if you had a lot of money attached to you I would not play around

 

[Sols]

Is that really true? Just because you live your children in Finland then they will not accept your relocation if you decide to leave them there maybe with some close family?

Have seen a couple of cases directly and heard of a few more. The legal advice from Finnish attorneys has been for people who have moved away to cut ties completely and spend very, very little time in Finland afterwards for the first few years, if they move to tax havens. Maybe it's overkill in some cases but when the alternative might end up being to convince a Finnish court to overturn a decision by the Finnish tax authority, most err on the side of caution.

 

[Dexur]

As a fellow Finnish taxpayer I recommend Romania. 3% revenue tax, 5 dividend tax, and 10% capital gains tax. Works for active business such as software dev, but also for investing. If you won't move out, you'll trigger CFC and pay 17% corporate tax in FI. But you can keep on investing until you leave Finland to cash out in Romania.

 

[GPT]

if relocation is not an option; what is the lowest tax in Finland?

Structure your investment income around that tax. In other words; if it’s dividend, make sure you receive once, or twice per year dividend.

If relocation is an option. Still apply the above and follow what has been mentioned by others. Don’t complicate it too much. A trust or foundation in itself is 9 out of 10 times more than enough without the need for and underlying company.

The underlying company is nice and it opens you up to potentially more taxes and admin requirements. So if you can avoid. Avoid.

 

[mikestachurski]

Just trading stock. Nothing more just to be able to trade without getting capital gains tax in between sales. Clients would be me

If you only want to avoid capital tax gains Netherlands is the country for you.

 

[zzzzzz]

Hi. I am very new to offshore and incorporating in any kind of jurisdiction in general.

I live in a very high tax country in the EU (Finland)

And I'm not sure but from what I've gathered, I could in theory set up an investment corporation/foundation or similar in an offshore jurisdiction with 0% capital gains and corporate tax
and then only get taxed when I withdraw from the company bank account?

Is this something anyone here has done? Is this a good idea?

I have been given some proposals like an offshore trust structure where a trust would own the company and I'd be the beneficiary but I'm not sure if that's 100% required
Also in terms of banking what kind of costs would I be looking at and can the bank be in e.g. Switzerland while the company would be in BVI or Seychelles, etc.?

I'm not looking for something with high costs involved or especially high annual fees

Also feel free to PM me with any kind of offer, quote etc. Or if you could recommend a great firm that could help me achieve this that would also be greatly appreciated!

What about Estonian OÜ company?
0% tax on retained and reinvested profits
14-20% the tax rate on distributed profits (withdrawals/dividends)
not a tax haven, not blacklisted, transparent, EU, 50 km from Finland... etc.

But you have to become Estonian tax resident, otherwise you are taxed by Finland laws.