Our future offshore business model is it ok?

[averagejoe]

I found your company as a reputable service provider in offshore business. I would like to order some services from you, but before I would like to get an advice. Below I have described our future business model.


There is an internet website which sell goods(clothes) worldwide. Customer's from US, UK, Germany and Russia. Product suppliers are based in Baltics (Latvia & Poland). Most of the customer's are non-juridical persons. Payments will go through paypal. Warehouse will be based in Lithuania. Company will not operate in Lithuania nor in Baltics. I am


interested in legal business structure.


I think it would be good to setup two companies: one (main) which will operate all sales through the internet and deal with suppliers and customer's, and another one will be located in Lithuania and will work as a separate company providing shipping/packing services for the first-main one. Could the main company be registered in Belize? Is it legal


if it operates with Lithuanian company? Or could you suggest any better ways to run above described business model?


I appreciate your time. Thank you in advance. Hope we could built a long-term business.

 

[JohnLocke]

Actually what I would recommend to do is to setup a Holding company for instant in the Seychelles and have a trading company in Cyprus, the Holding company could still be owned by the Lithuania company if required. The benefit is that you can move money between the Holding and the Cyprus company without to pay any tax due to double tax treaties, secondly if you are doing business with Europeans then you it will provide more trust towards your customers and business partners with a Cyprus Trading company rather than a Belize, Seychelles etc. company, Cyprus is part of the EU.


Also if you look for a merchant account or want to use 3 party payment processors like PayPal, Moneybookers, 2co.com etc. it will be way easier to find a reasonable solution for a Cyprus company compared to any of the other offshore jurisdictions.

 

[averagejoe]

I think a structure which you described is good a model to run online trading business.


A few months ago I've registered IBC in Belize. It has bank account in Latvia, Rietumu bank. This company hasn't processed any transactions yet. I think it could be used as a Holding company in yours suggested structure.


As I understood, all operations with customers and suppliers will go through


a trading company formed in Cyprus. Which type of company do we need to form?


Cyprus residential company or Cyprus non-residential? First one is better as it could have VAT number, but what about income tax of 10%?


Will I need to pay it if a company would be formed as a daughter-company of the


Holding based in Belize?


Due to Cyprus is a part of EU, I think it can legally operate inside of a


whole European Union. It means that we can setup a shipping center with a Cyprus company in Lithuania? If yes, when we do not need to setup Lithuanian company as currently we are not going to operate on the Lithuanian market.


What would you recommend as a banking option? If we are going to use Belize IBC as a Holding company which currently has bank account in Latvia, is it a good idea to setup bank account for Cyprus company in same bank in Latvia?


It will save time on banking operations between Holding company and Trading company.


Could you please also tell me a bit more about accounting with Cyprus company in my situation?

 

[JohnLocke]

To use the Belize company as an Holding company, also as you already mentioned it is the best to have the bank account for the Cyprus company opened with the same bank as you have for the Belize company.


In regards to tax then Belize has no double tax treaties in place with Cyprus, means the income is taxed in Cyprus before it can be send to the Holding company, also the business activity will take place in Cyprus so there is no way around the tax here. However, Cyprus has the lowest tax in the entire European Union so it is still beneficial for you and for many businesses around Europe.


Further, I would recommend to have the Cyprus company to be resident for the purpose to be able to register the company for VAT, only if you won't do any business in Europe or if the purpose is a Holding company in Cyprus we recommend to register the company non resident.

 

[averagejoe]

Thank you very much... as you can speak with your colleagues then we are already working on this and the formation is on it's way..

 

[JohnLocke]

Thank you very much... as you can speak with your colleagues then we are already working on this and the formation is on it's way..

Since I still not know who you are then it will be difficult, but I'm happy to hear that you are doing progress and happy with our services

 

[averagejoe]

My company name is Polyx Inc :hello: Thank you for all your help will recommend you to a friend who may already have contacted you.

 

[JohnLocke]

Thank you averagejoe... I'm glad to see that we actually were able to help you.

 

[suzy]

How long it took to incorporate your Seychelles company averagejoe?