Please help me to find the best offshore structure

[lecsogsm]

Hi

I've been working on an online service with my team and I've got to thepoint where I have to open a copmany and start trading. This project doesn't require offices or warehouses, everything happens online and online only. I live in the UK right now and want to provide service here first, then EU countries, then basically the rest of the world. Later on I might need an office somewhere for administration, but (correct me if I'm wrong) this can be handled by a separate company.

What I need is
- Minimize corporate tax
- Anonymity. I have an ex-wife who still sues me and thinks half of everything I earn is hers
- Easy accounting. I don't want to played with invoices and expenses, would be happy to pay some money to the jurisdiction instead. (if this is even possible)
- Be able to earn some salary/dividents from my own offshore company and pay taxes after that in the UK

Now (and again, please correct me if I'm wrong here) I can see 2 options here:

- Open a trading company in Cyprus (for example) with nominated directors and later on open another one somewhere which would handle andministration and would be owned by the offshore company
- Same as above, but copmlete it with another offshore holding company in Panama or elsewhere which would own the Ciprian company and would take pretty much all the profit.

And the million dollar question is


Would this work at all?

 

[Mark Rucken]

Hi

I've been working on an online service with my team and I've got to thepoint where I have to open a copmany and start trading. This project doesn't require offices or warehouses, everything happens online and online only. I live in the UK right now and want to provide service here first, then EU countries, then basically the rest of the world. Later on I might need an office somewhere for administration, but (correct me if I'm wrong) this can be handled by a separate company.

What I need is
- Minimize corporate tax
- Anonymity. I have an ex-wife who still sues me and thinks half of everything I earn is hers
- Easy accounting. I don't want to played with invoices and expenses, would be happy to pay some money to the jurisdiction instead. (if this is even possible)
- Be able to earn some salary/dividents from my own offshore company and pay taxes after that in the UK

Now (and again, please correct me if I'm wrong here) I can see 2 options here:

- Open a trading company in Cyprus (for example) with nominated directors and later on open another one somewhere which would handle andministration and would be owned by the offshore company
- Same as above, but copmlete it with another offshore holding company in Panama or elsewhere which would own the Ciprian company and would take pretty much all the profit.

And the million dollar question is


Would this work at all?

The idea with Cyprus LTD is good. I recommend you appoint a Nominee director and shareholder, while you would be ultimate beneficial owner. You will receive internal documents confirming you are the actual owner, but in the Registry you will be hidden.

Avoid appointing a typical offshore jurisdiction company in the structure as it complicates things, especially with the bank.

 

[lecsogsm]

The idea with Cyprus LTD is good. I recommend you appoint a Nominee director and shareholder, while you would be ultimate beneficial owner. You will receive internal documents confirming you are the actual owner, but in the Registry you will be hidden.

Avoid appointing a typical offshore jurisdiction company in the structure as it complicates things, especially with the bank.

Thanks Mark,

How would accounting work in Cyprus? Does anyone care what the coompany spends its money if I pay the annual fee to the government? Or strict rules, just as in any other country...

Szabi

 

[Mark Rucken]

Thanks Mark,

How would accounting work in Cyprus? Does anyone care what the coompany spends its money if I pay the annual fee to the government? Or strict rules, just as in any other country...

Szabi

Government fee is just EUR 350 annually, so it is not like you are contributing a lot to the local community

Accounting really depends from the accounting firm. There are some that are really strict and then there are some where everything goes. From my experience, the smaller accounting firm is, more liberal they are (they need more clients). Big firms tend to be more strict.

 

[lecsogsm]

Government fee is just EUR 350 annually, so it is not like you are contributing a lot to the local community

Accounting really depends from the accounting firm. There are some that are really strict and then there are some where everything goes. From my experience, the smaller accounting firm is, more liberal they are (they need more clients). Big firms tend to be more strict.

Ok, so I have a Cyprus Ltd, a lot of money comes into it, I get my salary and divident in the UK after which I'm paying some tax. I'm not on the papers anywhere in Cyprus, but I have the company card. So far it's completely legal right?

Let's say I have a creative accountant who covers my expenses if I use the company card in the UK. This is now not so legal I guess... but can get away with it as long as my "company expenses" are not like 10x higher than my salary.

But with that, my name is still on payroll, so crazy-ex-wife-wise I still need some kind of protection, apart from paying myself minimum wage. What can I do to avoid that?

 

[D0naldDuck]

The idea with Cyprus LTD is good. I recommend you appoint a Nominee director and shareholder, while you would be ultimate beneficial owner. You will receive internal documents confirming you are the actual owner, but in the Registry you will be hidden.

Avoid appointing a typical offshore jurisdiction company in the structure as it complicates things, especially with the bank.

How solid is a nominee setup nowadays in the EU? I think there are registers you need to register as the UBO, how easily can they be accessed by the public?

 

[Fred]

Forget about a nominee structure with Cyprus LTD in 2021 if you want to get a real bank account. Same goes for Panama.

Bank of Cyprus requires you to live in Cyprus as the UBO if you want to use nominees.

We have clients that currently make the whole setup with us in UAE after they didn't got a bank account for a Cyprus LTD with nominees even after 1 year.

If you really want no public company registers, no accounting and zero tax - go for the UAE and instead of paying for accounting you just have to renew your Dubai company once every year. If you setup the local UAE bank accounts with the residence visa the Dubai company formation grants you - there will be no CRS reporting of your bank accounts.

In case you use merchant accounts for the business like PayPal and Stripe you can setup additional to the Dubai company setup for few hundred $ an US LLC to satisfy the merchants and collect the money. Then transfering the profits to the UAE. You can then either use the local UAE business bank account of the Dubai Company to invest further or just as a savings account.

 

[lavel]

Bank of Cyprus requires you to live in Cyprus as the UBO if you want to use nominees.

I don't find this to be true. I know you want people to use Dubai as first, but I have been a customer at BoC for a very long time and I don't live in Cyprus.

My company is setup in CY.

 

[Fred]

I don't find this to be true. I know you want people to use Dubai as first, but I have been a customer at BoC for a very long time and I don't live in Cyprus.

My company is setup in CY.

When did you open the bank accounts?

Since 2019 we never heard one successful bank account opening with nominee structure and the UBO being non-resident.

Even EMI's like TransferWise rejecting Cyprus companies with nominee structures nowadays.

The point is that Cyprus is most often sold heavily as an offshore structure but is still part of the EU. To keep the promise they use nominee but then struggling to get any real bank account. That's why my advice is to simply go with a non-EU jurisdiction without public company registrar so that the company structure itself is simple and you just have to provide a good business plan to get the banking connection together with a local residence at least in the UAE.

Non-resident banking is coming to an end.

 

[BlueMist]

When did you open the bank accounts?

Since 2019 we never heard one successful bank account opening with nominee structure and the UBO being non-resident.

In Q4 2020 I opened business bank account (Bank of Cyprus) for Malta company with Cyprus nominee holding company and UBO being non EEA resident.

 

[Don]

In Q4 2020 I opened business bank account (Bank of Cyprus) for Malta company with Cyprus nominee holding company and UBO being non EEA resident.

We have also successfully opened accounts for our clients in Cyprus.

 

[Fred]

In Q4 2020 I opened business bank account (Bank of Cyprus) for Malta company with Cyprus nominee holding company and UBO being non EEA resident.

Yes in Q4 2020 they increased their risk tolerance due to COVID-19.

Meanwhile it's again the same like before.

We opened in the past for UAE based individuals with some kind of connection to Cyprus accounts in BoC as well.

But with changing risk tolerance from Quarter to Quarter you can't relay on them.

 

[lecsogsm]

Would it be easier to start a company anywhere, then once it's started up relocate to somewhere cheap, and then since it's an already prospering copmany it might get easier a bank account?

 

[Fred]

Would it be easier to start a company anywhere, then once it's started up relocate to somewhere cheap, and then since it's an already prospering copmany it might get easier a bank account?

The easiest way to get a bank account is to have the Company, residence as well as the bank account opened all in the same country. Non-resident banking is coming to an end.

 

[lecsogsm]

The easiest way to get a bank account is to have the Company, residence as well as the bank account opened all in the same country. Non-resident banking is coming to an end.

What about buying an already incorporated copmany with bank account?

 

[Fred]

What about buying an already incorporated copmany with bank account?

Bank account is useless. The bank will start the due diligence from the very beginning when the owner of company change.

 

[JimBeam]

What about buying an already incorporated copmany with bank account?

My 3-4 years old company in CY with BoC bank account will be ready for to be sold in a month or two...

The law office that did the setup knows the bank management personally and they work with them for 30+ years so bank account opening (or chaining the owners) should not a problem in their case.
Also, I am not CY resident and I have never actually been to CY in my life

 

[Mark Rucken]

Forget about a nominee structure with Cyprus LTD in 2021 if you want to get a real bank account. Same goes for Panama.

Bank of Cyprus requires you to live in Cyprus as the UBO if you want to use nominees.

We have clients that currently make the whole setup with us in UAE after they didn't got a bank account for a Cyprus LTD with nominees even after 1 year.

If you really want no public company registers, no accounting and zero tax - go for the UAE and instead of paying for accounting you just have to renew your Dubai company once every year. If you setup the local UAE bank accounts with the residence visa the Dubai company formation grants you - there will be no CRS reporting of your bank accounts.

In case you use merchant accounts for the business like PayPal and Stripe you can setup additional to the Dubai company setup for few hundred $ an US LLC to satisfy the merchants and collect the money. Then transfering the profits to the UAE. You can then either use the local UAE business bank account of the Dubai Company to invest further or just as a savings account.

Fred, I do udnerstand that you sell Dubai companies, but the fact that you can not open account in Cyprus for Cypriot companies, it does not mean that it is not possible. In a matter of fact, I open accounts in Cyprus weekly for Cyprus companies with non-resident UBOs.

Nominee service works perfectly in Cyprus, please do not spread false information.

With a good Agent with solid connections in Cyprus, everything is possible and the account can work perfectly.

 

[Fred]

Fred, I do udnerstand that you sell Dubai companies, but the fact that you can not open account in Cyprus for Cypriot companies, it does not mean that it is not possible. In a matter of fact, I open accounts in Cyprus weekly for Cyprus companies with non-resident UBOs.

Nominee service works perfectly in Cyprus, please do not spread false information.

With a good Agent with solid connections in Cyprus, everything is possible and the account can work perfectly.

Thanks for the information. I just give my experience and in most of the cases we had the bank account opening with BoC took forever.

Maybe we should have a conversation