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Offshore solution to my problems. Please help...

DaveSpace

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I am an Indian citizen who for the last two years had a agreement with a FOREX trader in Australia. The agreement allowed me to work for his corporation as a adviser and trade currencies bypassing restrictive rules set up by the Indian Government regarding retail FOREX trading. This partnership is coming to an end now. I am also a freelancer and over the last two years I have done well in both of these jobs.

I need a solution to the rules set up by the Indian Government. I need to circumvent them.

The following are the rules made by the Tax Department of India

POEM - Place of Effective Management
For a company to be non resident in India and therefore be free to do whatever it wants, it must fulfill the following POEM provisions.

POEM Provisions: Applicability
Deferral or no deferral, these are the CBDT criteria that foreign companies now have to contend with.

Quantitatively, companies with turnover of Rs 50 crore/7.8 million USD or less in a financial year will be exempt from the POEM provisions. Qualitatively, companies with active business outside India will be exempt from these provisions. The CBDT has spelled out the criteria for the active business test:

Passive income should not be more than 50 percent of total income, and
Less than 50 percent of total assets should be situated in India, and
Less than 50 percent of total employees should be situated in India, and
Payroll expenses on such employees should be less than 50 percent of total payroll expenditure.


Before I came across this forum, another firm recommended me that I can do so by opening a company in Seychelles and using a nominee director who will appear on records as the owner and I will then be hired as a Consultant. They also said that Corporate Bank Account will have terms that prohibit the nominee directors from changing passwords etc. For further privacy they recommended a Private Interest Foundation as the owner of that corporation.

I am new to all of this and don't want a solution where the party helping me out screws me over because it didn't understand my needs.

The following are my need,

1. I don't mind paying taxes because then my company is resident in a different jurisdiction. I am not doing this to evade taxes. So, give me a solution that helps me circumvent the above mentioned stupid rules.

2. There must also be a way to transfer my freelance business to this corporation. So I should be able to conduct both Freelance and FOREX investing services using this corporation.

3. I will need a corporate account with low balance requirements. I don't want to raise eyebrows by remitting large amounts.

4. I wouldn't mind a structure that was similar to my agreement with the above mentioned Australian citizen.


Structure of the company----


Open a Corporation offshore

Open a corporate bank account

Fund that account

Use the funds in the account to fund my preferred brokers i.e. Dukascopy and LMAX.

The profits from both freelancing and investing in FOREX are taxed in the same jurisdiction where they are incorporated in thus allowing me to take advantage or current or future double tax avoidance treaties.

If you require any other information, please just ask. Last couple of months were very stressful because the partnership came to an end.

 
@DaveSpace But still there is one issue, I trade with ICMarkets and prefer only ECN, and they do ask for personal identification like an ID irrespective of whether you setup the account as a company or individual. So that actually ruins the efforts of setting up an offshore. I personally want to hide the identity as govt doesn't allow Indians to trade forex with foreign brokers, even if you are doing really great which is utter nonsense.
 
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Some setup the entire thing without to provide personal documents. I'm not sure if this is a valid way to setup a business for long term purpose. However, in the Mentor Group you can read all about it. It's up to you if it is worth for you to subscribe or not. By subscribing to the Mentor Group you also show your support to the forum and help us keep it online!
 

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