Need Help Setting Up Offshore Company and Offshore Banking

[Raymond]

Hi,

I wanted more clarity on setting up offshore corporation. I am from India and have an e-Commerce business registered as a corporation in India and I sell worldwide mostly. I do pay taxes here in India but not entirely, as I somehow manage to show expenses. Apart from this I am an active forex trader as well, but it's illegal to trade forex with foreign brokers and India doesn't give much opportunity to trade forex. The corporate taxes down here are at 37% and increases with increase in income. I wanted to setup a offshore company in one jurisdiction and an offshore bank in another jurisdiction. This would help me to keep my money that I earn from abroad to stay there instead of bringing it back to my home country. For me privacy is utmost. I would like to invest this money in startups, real estate and reinvest in forex that's my first priority and second is bringing it back to my home country to purchase home, car and stuff. I would be glad if anyone could help me with my following questions.

1. What kind of offshore setup would I need?
2. Which jurisdiction is good for offshore company formation and offshore bank for investing basically like I've stated above.
3. I have heard that back-to-back loans help bringing money back to home country? Can anyone help me in this regard.
4. Can I use debit cards issued in the name of proxy back in my home country? Is it safe?
5. I am okay with paying 10% tax at max, but a very good jurisdiction for company and banking and privacy are very important for me. I have heard Belize and Seychelles are one of the best.
6. As AEOI is quite prevelant now a days, India as well has many signed agreements with countries as to curb offshore corps. Won't this affect me? Earlier Singapore and Mauritius was the ideal destination but it has drastically reduced.
7. Please do help me with anything that I might have missed or should consider.

 

[mnschwarz]

I've no idea regarding the laws in India but most countries have CFC laws. Basically it means if you control the company, you would be taxed where you are resident. This is to stop people like yourself simply incorporating offshore and avoiding taxes. You would need to speak to a local professional in India to find out more about this. Assuming you have something similar, your options are to go the illegal route where you attempt to hide your offshore activities, or you could look at a more complex structure utilising a Foundation, nominees etc. The first route becomes very difficult to ever take your funds back in to India as you create a connection and can get caught. The second you are able to but you would then pay tax on the these funds at they would be income for yourself (most likely).

As for jurisdictions, there are plenty to choose from. Belize & Seychelles are two popular ones and may suit your needs. They are cheap, have no accounting requirements or taxes on offshore profits. Banking gets a lot more complicated and is difficult to recommend one at this stage. You need to work out what you're looking for in an offshore bank account first.

Back to back loans don't really serve your needs to bring profits onshore. A normal loan can in some limited way however. Your offshore company would loan you the funds. The problem with this is, you create a connection to your offshore company (which is fine if it's all legit) & the loan must be made at fair market value. You also have to actually repay the loan with interest. A more popular way to take funds back onshore is by employing or contracting yourself through the company and paying yourself for your services. This is where you would be taxed on the income you paid yourself.

You can use debit cards to withdraw cash. How safe it is depends how much and how you're using the cash. If you're rolling around in a lambo you bought with cash while your tax return states you earned $20k last year, you're bound to get caught eventually. If you do this just use it for normal day to day living expenses.

The AEOI is affecting almost everyone and it will be difficult to get around. The options to avoid are to bank in a jurisdiction that has not signed on, though keep an eye out for future agreement; Get legal residency in a zero-tax jurisdiction that doesn't care about your offshore banking; or use nominee account signatories. Depending on your structure it may also be possible to get a bank to recognize a trust or foundation as the UBO though I have not yet seen if this is actually possible.

 

[adoffshore]

How did you sort this out OP? I would like to know because I have a few friends in India struggling to do business with me! If there is a way to form a company for them in order to make business with me it would be great!

 

[suzy]

I would like to know that too, just curious how to go with a setup for this type of business.