Offshoring my internet business so I can travel

[Shorage]

Hi,


New to the forum, hope it will help me understand the entire offshore process more.


I work freelance, mainly website development and related services. I already work from home, though truth is I can work from pretty much anywhere with a DSL connection. So what I want to do, basically, is just travel around as I work.


Thing is, whilst I know my own sector inside out I don't really understand the offshore process and the financial/legal considerations involved.


I'm an EU citizen and can travel around the EU freely. For all intents and purposes I'd be a tourist.


What I'm basically trying to figure out is what the whole offshore thing can do for me and I need someone to help me understand the distinction between what's the legit aspect of offshoring and what isn't.


I mean, correct me if I'm wrong but as I understand it the idea of offshore companies is not to completely avoid tax, but to reduce ones tax burden - is that right?


And if so the next confusing question is who do I have have to pay taxes to? To the country I'm in? The country I'm from? The last country I registered as resident in? Or the country I've registered my offshore account in?


It's all very confusing.


Also, let's say I find a place I really love and decide to settle down and become a resident there, how does it all work then, or does it depend on the country? Are offshore companies universally recognized as legal entities or does it depend on the country?

 

[JohnLocke]

I mean, correct me if I'm wrong but as I understand it the idea of offshore companies is not to completely avoid tax, but to reduce ones tax burden - is that right?

There are 2 answers to this specific question. It depends on who you ask and your own opinion, some will say Yes you are 100% correct in this understanding while others will say it is all about to hide you from the tax authorities and to avoid to pay tax, the latter is terrible wrong and you need a lot of money to just be 80% safe with solutions that pretend to help you accomplishing this.

Also, let's say I find a place I really love and decide to settle down and become a resident there, how does it all work then, or does it depend on the country? Are offshore companies universally recognized as legal entities or does it depend on the country?

Regardsless where you are moving to then if it is for tax pyrpose you will want to look at 2 things at the country in question 1. What is the personal income tax rate and what is the corporate tax rate if I live there vs if I not live there, yes okay that was 3 things. In general all Offshore jurisidcitions will be recognized as legal entities, the question is what country will bell the alarm.

 

[OffshoreInc]

I mean, correct me if I'm wrong but as I understand it the idea of offshore companies is not to completely avoid tax, but to reduce ones tax burden - is that right?

It depends on who you are and what your goals are... some are going offshore because they want entirely to avoid to pay tax while others just want to reduce the tax.

 

[EuroFinance]

Hi,


I am new to the forum so I will very cautious to give any link, because I have not really understood the limitations for the "freshmen".


I work for a company which forms Zero Taxation Company (not off-shore, but company that use the fact that the beneficial owners/nominee are not fiscal subjects of that country) with websites in other jurisdictions (however the websites are not E-Commerce websites, so are irrelevant regarding the point of taxation) with bank accounts in EU countries which accept without problem "foreign accounts" and managed by a online remote management software linked to the website (the data are stored in a server in another country) I have seen that the system works quite smoothly because play on the differences in taxation between the different jurisdictions (one of registration of the company, one of the website, one of the management software/database, one of the bank account). Where the beneficial owner is resident is irrelevant: he can be an agent, a representative which receives some little money here and there, etc. specially when the company is managed and owned by nominee. I have seen that this situation is particularly good with client which activities are to trade in non physical goods.


Maybe a solution like this can be beneficial to Shorage.

 

[JohnLocke]

Sounds interesting and this is a real bank you mention? Not just some sort of financial service company registered in NZ or other like jurisdictions?

 

[EuroFinance]

Yes, actually they are few A, AA banks in EU , in EU countries where there are not prejudgements for offshore countries (of course, not EU black listed/sanctioned countries, like Iran, Sudan, etc.


They accept also personal foreign accounts, but in this case the identity of the signatory person comes out.


We normally prefer to use Zero Taxation Companies, i.e. companies from jurisdictions where an LLC is treated as a LP, consequently it is not a taxable entity because the taxable entity is in effect the member/partner, which is not a resident of Company country.


So not NZ or anywhere else "funny banks" involved.


If you want to know more please contact me (I do not believe I can put my link here yet, I am right?)

 

[clemens]

EuroFinance, so do you represent a bank or are you one of these hundreds of consultancies offer offshore and low tax jurisdiction incoproation?

 

[EuroFinance]

EuroFinance, so do you represent a bank or are you one of these hundreds of consultancies offer offshore and low tax jurisdiction incoproation?

....<-removed- hidden advertising, please read the FORUM TOS-> and as such it has very good relations with Banks which operate in some "intelligent" jurisdictions in EU (European Union) which accept bank accounts of non resident companies and persons under our recommendation, consequently when we organize the business of a Company (we prefer to work with Zero Taxation Companies, which are NOT necessarily what you call "off-shore" company, but can be also Companies registered in "normal" jurisdiction with particular taxation/laws, but we can work also with good "off-shore" companies , of course not black listed for a reason or another) we facilitate the opening of bank accounts in such banks.


I repeat: we work with banks in EU in some "intelligent" jurisdictions, not with "off-shore" banks.


For instance, we do NOT open bank accounts in UK for non residents, because being in reality the UK banking system extremely "reserved" to whom is a member of the so called "local financial establishment" (de facto a "cartel") they made extremely bureaucratic and expensive to open a non resident account and they immediately address you to their branch in Jersey, Guernsey or Isle of Man (and we are "off-shore" again!).


I hope to be clear, but if you need more explanations, please do not hesitate to ask. Thanks

 

[Shorage]

Hi, thanks for all your replies.


I've done a little research since I was last here though I'm still not 100%


What I'm looking for is a simple solution, not something like EuroFinance proposes which I have to read several times to try and understand it, sorry :conf:


As mentioned earlier I come from an IT background so finance is not my area of expertise. What I'm looking to do is to set up a new internet business which allows me the freedom to travel whilst earning a good living. I want to base the business ideally somewhere with a minimum of tax-related hassles, for example a low corp tax rate and no VAT so that I can price my services competitively. I would also like to be able to use the corporate structure as an investment vehicle to provide for my future.


It's important to understand that I'm not trying to avoid paying taxes so much as avoid paying unnecessary taxes, which is what my understanding of the whole offshore thing is all about. I also want to avoid as much hassle, bureaucracy and expense as possible.


The thing I can't get my head around and can't seem to find a straight answer on is the whole thing regarding tax-treaties. Near as I can figure out if I incorporate in country A and then reside (even if just temporarily) in country B and both countries have a double taxation treaty then everything's ok. But if they don't have one then I'm liable to pay tax twice, am I not?


Correct me if I'm wrong.


My question is, in such a situation, where I am liable to pay tax on income would that only be the income I bring into the country in which I'm residing?


Or to put it another way, as the company and myself are separate entities am I only liable to pay income tax based on my company salary, going from my company a/c to my personal account in the other country, not on the company's profits? As obviously they're two different things entirely. Right?


The other thing that's baffling me is the situation regarding investment. In addition to investing money back into the company am I also able to use that money to build an investment portfolio?

 

[EuroFinance]

Hi, thanks for all your replies.
I've done a little research since I was last here though I'm still not 100%


What I'm looking for is a simple solution, not something like EuroFinance proposes which I have to read several times to try and understand it, sorry :conf:


As mentioned earlier I come from an IT background so finance is not my area of expertise. What I'm looking to do is to set up a new internet business which allows me the freedom to travel whilst earning a good living. I want to base the business ideally somewhere with a minimum of tax-related hassles, for example a low corp tax rate and no VAT so that I can price my services competitively. I would also like to be able to use the corporate structure as an investment vehicle to provide for my future.


It's important to understand that I'm not trying to avoid paying taxes so much as avoid paying unnecessary taxes, which is what my understanding of the whole offshore thing is all about. I also want to avoid as much hassle, bureaucracy and expense as possible.


The thing I can't get my head around and can't seem to find a straight answer on is the whole thing regarding tax-treaties. Near as I can figure out if I incorporate in country A and then reside (even if just temporarily) in country B and both countries have a double taxation treaty then everything's ok. But if they don't have one then I'm liable to pay tax twice, am I not?


Correct me if I'm wrong.


My question is, in such a situation, where I am liable to pay tax on income would that only be the income I bring into the country in which I'm residing?


Or to put it another way, as the company and myself are separate entities am I only liable to pay income tax based on my company salary, going from my company a/c to my personal account in the other country, not on the company's profits? As obviously they're two different things entirely. Right?


The other thing that's baffling me is the situation regarding investment. In addition to investing money back into the company am I also able to use that money to build an investment portfolio?

The answer is very simple: all depends from two things: the country of your residence and the country of residence of your company.


Certainly is true that if you have a company in country A and you are resident in country B, you pay a tax on profit in Country A (corporation Tax) and a tax on your salary in country B.


On top in many countries you are taxed on profit both at source (in country A) and at distribution to share owner (in country B: you).


But exist also countries, for instance Slovakia, EU, where exists only taxation at source (19%) and after, dividend distributions can be sent where you like without any taxation at distribution (providing you are not so silly to send to country B where this become your second taxable income).


On the other end you do not need to be in the list of the share owners: you can always have a nominee share owner from a convenient jurisdiction.


But you can also avoid to pay the tax in country A if the Country A is a Zero Taxation Country for LLC (here I start to reveal some shop secrets so the only thing I can tell you is to have a contact with <- hidden advertising, removed, please read the TOS, and they will tell you the arcane and the solution).


In this case you are taxed ONLY on what you receive in country B, and you can regulate the tab as you want specially if you receive your "salary" in the form of a commission.


About taxation of income in country B (country of your residence), better if you are resident in a country B at low taxation, but you can always keep your income at a minimum level.


Regarding VAT, if your company is registered in country A , but supply IT services in country C or even B, you do not pay any VAT (of corse if you have an e-commerce in country A selling to A country customers, you will pay VAT of A country.


Regarding investment, exists a lot of jurisdictions where your Company can invest without any taxation (but exist also crazy countries like Italy, which kill you just because you are so silly to go to spend there. So a bit of homework can be necessary on this matter (EuroFinance Mercantile can help again).


I hope I have clarified the matter: otherwise I will be happy to tell you further.

 

[JohnLocke]

But you can also avoid to pay the tax in country A if the Country A is a Zero Taxation Country for LLC (here I start to reveal some shop secrets so the only thing I can tell you is to have a contact with <-hidden advertising removed ->, and they will tell you the arcane and the solution).

If you have something to explain to people then please do so, but STOP your hidden advertising and please read the forum TOS, this is a final warning!

 

[EuroFinance]

My previous message


Sorry, but it is difficult to speak about a "cook" without to mention the "cook",


specially if that cook has his special recipe.


In life, everything can be considered "hidden advertising". However, please accept my apologies.

 

[Shorage]

Eurofinance did help me understand things a little better though I can see why the admin is annoyed. He sort of stopped 1/2 way and then turned it into an advert. Don't know what he means about the Italians either.


Think we're sort of loosing focus here slightly and I'm still no closer to understanding how this whole offshore thing is meant to work.


Please help :S -confused:

 

[EuroFinance]

When I speak about Italy it is just an example how a country destroys itself overtaxing everybody to get money to waste paying tens of thousand of unproductive politicians, bureaucrats, advisers, etc. (but Italy is not the only country doing so).


Regarding the "hidden advertising" there was nothing there a part mentioning a certain company.


Frankly, to be able to answer more specifically or you contact me privately (and I do not know how to do, considering the rules of the forum) or you explain what, on the base of what you have understood, will be your "dream solution" and we go from there correcting what can be wrong in your "dream solution" .

 

[JohnLocke]

Sorry for the confusion about the forum rules, but please find a detailed explanation here /forum/f24/how-understand-forum-rules-16521/#post28350 and as well below:

How to understand the forum rules when I'm new to the forum?
When you just signed up to become a member on the CCLOGIC forum or you simply never posted before then you are not allowed to make your posts or threads in a way that you request the user to contact you in order to get an answer to their questions.


This forum is a discussion forum, meaning it is intended for discussion of certain or particular issues, to suggest solutions or options for the forum user's problems or ideas.


We do not allow anyone to advertise their specific service just because they think it matches the user's issue, problem or idea. If you think you can't post without breaching this simple rule then DON'T post and stay out of the discussions, there will be other users able to help.


How can users see who I am if I can't post my company name or ask people to contact me?


Very simple, once you have made at least 15 posts and have been an active member on the forum for at least 30 days, then you are allowed to put your signature in your profile which will show up on every post or thread you post.


If your post or thread is informative and attractive to the forum users they will contact you, but it is still not allowed to request people to contact you directly in your posts.


The above are rules similar to every other serious forum.

If it is still not clear to EuroFinance or any other forum user, then please stop posting to avoid to be banned and your posts deleted... Also please stop discussion's about the forum rules in this thread since it is off topic and not helping anyone.


Enjoy your stay guysdoublethumbsup

 

[Txolkin]

Hi thread starter. Have you found any best solution to your situation at this stage. I'd be interested in hearing your views. I've been discussing about this myself in the thread called "freelance offshore".

 

[provider]

Me too Please tell what you find so we may get help from it.

 

[specter]

Mee too found the discussion quite interesting