Nevis + Bank Account

[SirGRA]

Hi guys,

I need to incorporate a company in Nevis plus a Bank account for a legit IT Consulting Business.

Can anyone, please, point me to a good provider(s)?

Anyone with a 'readymade' Nevis company to sell?

Kind regards

 

[OffCap]

Why do you want it to be Nevis? Generally, I'd stay away from jurisdictions like that these days

 

[SirGRA]

Many thanks @<<snippet>> for your reply.
Can you please elaborate on 'jurisdictions like that'. I'm opened to better solutions/suggestions.

Thanks

 

[OffCap]

Today most of the traditional offshore tax havens:

- Nevis
- Belize (heck anything that's an IBC regime)
- Bahamas
- etc.

Are typically bad options because banking is such a nightmare. Usually, though it's case specific and case by case you're better off to go with more of what we might call a midshore jurisdiction. In a perfect world one where you can bank in the same country as you form the company and ideally you've got operations there of some sort.

 

[Martin Everson]

Can you please elaborate on 'jurisdictions like that'. I'm opened to better solutions/suggestions.

Where are you based? This is most important question that needs answering before looking at any solution.

 

[SirGRA]

@<<snippet>> Many thanks for explaining, I understend better now.

@Martin Everson I am based in Europe and in Mexico.

A lot is changing on the offshore world, is really difficult to keep track of all the amends and changes.

Do you guys think that Seychelles or Belize (even with the recent changes) are an easier solution to get also a bank account?

Thanks a million.

 

[Martin Everson]

Do you guys think that Seychelles or Belize (even with the recent changes) are an easier solution to get also a bank account?

I have no idea what your goal is i.e reduce taxes, privacy or simply ease of doing business . Work out what you want to achieve ultimately as this is important. Tax issues aside your gonna have to find at least 2-3 non-EU banking solutions for those companies before going down this route.

 

[OffCap]

@<<snippet>> Many thanks for explaining, I understend better now.

@Martin Everson I am based in Europe and in Mexico.

A lot is changing on the offshore world, is really difficult to keep track of all the amends and changes.

Do you guys think that Seychelles or Belize (even with the recent changes) are an easier solution to get also a bank account?

Thanks a million.

@Martin Everson gave you good advice here.

I'll start with this. The ONLY thing Belize, Seychelles, etc. are good for these days is privacy. For ease of doing business they won't be great. For banking they'll be horrible. For tax planning forming a company there is almost never relevant to how you are taxable because of corporate residency and source income rules. You're never going to actually base real operations there so from that perspective it makes zero sense.

Some things Seychelles, Belize, Marshall Islands, Samoa, Vanuatu, Nevis, etc. are good for are if say you wanted to have a company with privacy that only ever transacted in crypto so had no banking but wanted access to corporate accounts on crypto exchanges. This would be useful.

If you wanted something like tax and you want stable banking and operations you'd definitely not want to go those routes.

The best way in my opinion to achieve privacy today is to place someone between you and the entity but this requires trust and has a cost.

In general, I think the subject of cost is worth considering. If you're only talking about small amounts of money, unless the country you're from is horrible to do business in and you're looking for someplace easier it's simply not worth it UNLESS you're gaining a genuine business advantage by putting real operations somewhere so your net costs are lower than your benefits.

Usually, for most people who are in what we might call developed or high tax countries I tell them using an offshore structure rarely makes sense until you're making around mid 6 figures. Why?

Just run through the economics and hassles involved. Normally, you could form a company locally, open a bank account fairly quickly and probably have pretty stable operations (again depending where you are located). Let's say you'd make $100k profit and let's say your net tax would be $30k (this is a pretty reasonable estimate for most developed countries by the time you take money personally, which you'll almost certainly have to do to live at those income levels). Even beyond this you'll maybe pay lower corporate tax (say average of around 20% though it could be anywhere from around 10%-30% depending on the country) and leave the money there.

For this, you get a fairly straight forward operation, have no risk of governments coming after you etc. You can focus on making more money.

Now, compare to that same person forming an offshore company. Depending where they are based this might cost anywhere from a similar amount to form the company to 2-5 times more so you've already got an extra cost. You're probably also going to need certified documents, etc. especially for banking so this is going to increase your hassles and costs. You're not eliminating the need to do accounting or book keeping in your home country because you still clearly have a connection to there.

You've got basically 3 options:

1. You try to use jurisdictions that won't share your information - the best of these right now is arguably Georgia though there are some other options. This will require a physical in person visit so you've got to pay to travel, which is going to cost you probably another few thousand dollars (flights, hotels, time, etc.) What's maybe overlooked is you've also got to travel every time there's an issue, which makes it worse. All in all you're easily up to $5k (btw, while they won't report you at the bank level there are records of ownership and directorship so it's not private and you're still at some risk. You could say go for some type of set up like using a Nevis company with Montenegro or Albanian bank account or something similar, which would give you decent privacy but you'd have worrying banks).

2. You could pay to put someone between you and the entity - in general, I'd expect to pay $5k/yr for this at the low end. You can sometimes find lower but quality does matter and you'll probably need this person to do things for you along the way (stuff to do with banking, providing a utility bill, etc.) So let's say for easy numbers you're probably at $10k+ depending on where you're located. You might still have some local taxes in this model, you might have some additional filings depending where the company is, etc.

3. You do it legally putting some substance in place to ensure it's compliant - in this model you don't have to worry about privacy aside from your personal desires but you're going to need to have actual people being paid for whatever work is relevant. This is going to cost at least $2k/mo. I'd expect and could be much more depending where you are, what duties they need to perform, etc. You'll normally at least need an manager in place. Then there's probably additional filings at your local level so all in all you're probably looking at $35k+/yr in costs

In the first two options you've ultimately still got to get some money personally and though you can rationalize some expenses paid on a company card or something you can't do that for major expenses such as housing and a vehicle, at least not very well since there's a direct tie to you so you're going to have to pay tax on that income anyway meaning your reduction of your tax bill is maybe half to two thirds. If we're generous and say you reduce it by $20k and it costs you $5k in the first option so you're getting a net savings of $15k. In trade you've got:

- More operational hassles
- Huge risks with the government when it comes to getting caught

In the second scenario it costs even more, is more sustainable but again has more operational hassles (relies on someone else) and likewise has risks with government.

The third option is viable and sustainable but unless you're saving money or simply moving real operations that's a cost that exceeds the amount of tax savings. So, unless you're at the $250k+/yr in profit level it almost certainly doesn't make sense.

 

[SirGRA]

@Martin Everson Thanks for the suggestion. The goals are privacy and tax reduction. We mostly deal with crazy taxed european countries.

@OffCap a BIG thanks for all the possibilities and explanation.
Indeed I understand that if the profit level is low going offshore is not worth it. Our profit level is substantial, personal visits are not an issue, if needed, and our major shareholder is in the process of getting Panama tax residency. But he would like not to have is local Panama company involved directly in the structure.
We also have concerns about Georgia. it is taking steps to join the EU, and some information trades are soon to be established due to some EU programs.

Banking is getting more difficult due to the risk level assessment and OECD Beps are forcing all the offshores to change regulations, raise taxes and change CFC rules, that is our real concern.

So, indeed, it is becoming harder and harder to optimize taxes and not pay 50% of our hard earned profits.

Thanks again @Martin Everson and @OffCap.