Offshore company for two different activities, which bank to chose?

[Pablo]

Hello all,


before coming to this nice forum I took considerable amount of time to educate myself. All I want is to check with you guys if I made correct decision, so that I don't shoot myself in the foot.


Originally I started to look about a month ago for a tax heaven for my trade company. I'm resident in Canada, I have a full time job and pay lots of taxes. In parallel I run a trade company with a partner. The trade company does not have any activities in Canada whatsoever and we started to wander WTF we pay the tax at all. We do trade between Europe and Asia in case if it matters.


The other activity is professional services: I work for a Canadian IT company and one my relative in Asia has a small IT consulting firm. I negotiated with my employer to give them some contracts from time to time. The Canadian IT company has like 30 full time employees, a few of them from the USA and customers are mostly from the USA as well. The estimated monthly contract on average will be around $10000-12000 for the first year or two, then it will be a bit lower (maintenance phase), around 5-7K per month.


For a trade company I decided to register in Dominica. Simply because it offers the same siht like most others, the cost (yearly maintenance fees) is almost the lowest in the industry, they are an English speaking country and are located close to Canada (not a big time difference). I absolutely don't need to have any nominee stuff and other gimmicks, I can have myself as the shareholder and the director. Occasionally, we also do some trade with Canada as well (our partners/customers are a couple of big companies in this field with clear reputation). So the question is: is there any problem for them to deal with our Dominica-registered company? If I put myself as the owner/director, could somehow Canadian taxman come to me and claim that I need to pay tax? I hold dual citizenship (Canadian and from an Asian country), is there any advantage if I show my other citizenship, or there is no difference?


What bank is recommended for a trade company? I was recommended HSBC (cheaper fees etc).


Any idea if a Canadian resident/citizen has to pay tax on all worldwide income?


For an IT firm of my uncle: they do local jobs only, so they never dealt with foreign customers. I told him to register an LLC in Delaware and open a bank account so that my Canadian employer could pay him to his US-registered company.


Is there anything wrong in my decisions?


thanks!

 

[Pablo]

I see that Canada has TIEA with Dominica: this-forum/f14/canada-signs-tieas-12770/ ( Canada Signs TIEAs )


What does that mean? Do they automatically know that I'm the owner of a company that makes profit? Or they will know only if they suspect something and will make official request to Dominica about me or my company?

 

[JohnLocke]

I see that Canada has TIEA with Dominica: this-forum/f14/canada-signs-tieas-12770/ ( Canada Signs TIEAs )
What does that mean? Do they automatically know that I'm the owner of a company that makes profit? Or they will know only if they suspect something and will make official request to Dominica about me or my company?

Welcome aboard Pablo, in regards to the TIEA this OCED purlbication may be of interest for your PayPal


A "tiea" means that your tax authorities will be informed about any type of bank account you may have abroad, so the balance etc! but this does not necessarily means that you details will be automatically send to your country but if they suspect something because they found your name pulled up on a list they can retrieve the information they need to cough you.

 

[Pablo]

I'll read these docs on that oecd site.


How does it work technically about accounts that you mentioned? What if I use my passport from Kazakstan when registering the company and opening a bank account? I first/last name combination is quite common Even in my city in Canada there are two other people with the same name and i'm sure that there is even more in Kazakstan. So, is it safe to assume that tax man doesn't receive any info about my account? I understand that if they suspect something, then they will be able to request info etc, but my name won't be related at all to the company in canada, it's not like I have any business in canada that does business with my offshore company in dominica, we deal with onshore companies and they aren't related to me at all.

 

[Pablo]

In case if there is anybody interested from Canada, here's the agreement between Dominica and Canada:


google: "Tax Information Exchange Agreement Signed Between Canada and Dominica" (I cannot post links)


What I really do not understand in this agreement is the ARTICLE 7, "Possibility of Declining a Request". I tried to read through the entire agreement and it looks like Canadian tax authorities can ask info on account of some random guy from any other country in the world.


There is another question I have: what if the company registered in Dominica and bank account is in some bank in Cyprus?


By the way, is there anything wrong in my decisions about opening these two offshore companies?

 

[Pablo]

At the same time I need to open bank accounts for both companies. I was thinking about account in Cyprus since many of our partners also use accounts in from banks in Cyprus.


Any recommendations about Cyprus banks? What choices do I have? Times/procedures/costs to open accounts?


thank you.

 

[JohnLocke]

I'll read these docs on that oecd site.
How does it work technically about accounts that you mentioned? What if I use my passport from Kazakstan when registering the company and opening a bank account? I first/last name combination is quite common Even in my city in Canada there are two other people with the same name and i'm sure that there is even more in Kazakstan. So, is it safe to assume that tax man doesn't receive any info about my account? I understand that if they suspect something, then they will be able to request info etc, but my name won't be related at all to the company in canada, it's not like I have any business in canada that does business with my offshore company in dominica, we deal with onshore companies and they aren't related to me at all.

As I understand you are a citizens of Canada right and live there as well?

 

[JohnLocke]

At the same time I need to open bank accounts for both companies. I was thinking about account in Cyprus since many of our partners also use accounts in from banks in Cyprus.
Any recommendations about Cyprus banks? What choices do I have? Times/procedures/costs to open accounts?


thank you.

There are plenty of good banks in Cyprus i.e. Bank of Cyprus, Piraeus Bank, Laiki Marfin, Hellenic bank, the application process is different from bank to bank so the average duration to accomplish this task, but you may expect it to take between 1+ and 14 business for the bank account to be operative! This depends on that the bank receiveds ALL documents at once, that there is a website ready (if it is online business) and that the passport copy, utility bill etc. is valid.

 

[JohnLocke]

What I really do not understand in this agreement is the ARTICLE 7, "Possibility of Declining a Request". I tried to read through the entire agreement and it looks like Canadian tax authorities can ask info on account of some random guy from any other country in the world.

True, they can do that without any problems or evidence of any tax evasion or other fraud.

There is another question I have: what if the company registered in Dominica and bank account is in some bank in Cyprus?

This will of course help you, please also see the link here: Offshore Company Forum - Open bank account in Cyprus, personal or corporate? it apply to your situation as well since Dominica is not within the EU!

 

[Pablo]

As I understand you are a citizens of Canada right and live there as well?

Yes, I'm a citizen of Canada and I have second citizenship from Kazakstan (I have a few relatives in there).

There are plenty of good banks in Cyprus i.e. Bank of Cyprus, Piraeus Bank, Laiki Marfin, Hellenic bank, the application process is different from bank to bank so the average duration to accomplish this task, but you may expect it to take between 1+ and 14 business for the bank account to be operative! This depends on that the bank receiveds ALL documents at once, that there is a website ready (if it is online business) and that the passport copy, utility bill etc. is valid.

I've read about BNP paribas, Sosiete General, HSBC etc. Is it possible to open account in these banks?


Seems that BankOfCyprus is ok also. Where can I find service prices (wire, account fees, l/c etc)? How is their online thing, works OK?

 

[Pablo]

If I open a company in dominica, what documents do I need to open an account in BankOfC.? Apostilled or simply notarized documents of the company (copies or the originals), utility bill (any problem if it's in Russian?).


Can Russian tax authorities request account details from the bank of Cyprus? My uncle has Russian and Kazakstan citizenship and he does some business with Russia as well, he does not live in Russia though.

 

[Pablo]

For the reference letter, what does it have to say?

 

[torkidarn]

For the reference letter, what does it have to say?

What is a reference letter why do we need it?

 

[JohnLocke]

Can Russian tax authorities request account details from the bank of Cyprus? My uncle has Russian and Kazakstan citizenship and he does some business with Russia as well, he does not live in Russia though.

Never open an offshore or Cyprus bank account personally, always do it through a non EU country like the Seychelles, Belize or Panama, this makes it difficult for any authority in the EU to gain access to account holder data.

 

[JohnLocke]

What is a reference letter why do we need it?

Simply that you are known to the bank and that you have hold an account in good standing for X years. We have an sample here /offshore-applications/cclogic-reference-letter.pdf

 

[JohnLocke]

What is a reference letter why do we need it?

Please check this sample: /offshore-applications/cclogic-reference-letter.pdf so you amy know what a reference letter is.


Be informed that not all banks requires a reference letter, so if you have difficulties to get one(some may face problems) then it is still possible to open a bank account.