Question about forming an Offshore Company

[Buritobandito]

Hi guys, as im new to this forum and reading different things here, it can be quite confusing at times with the amount of conflicting information on this forum, so please bear with me.

Im currently a Canadian citizen living here in Canada. I want to start up a digital marketing agency that would strictly be online based.

As you may know, the corp tax rates here in Canada are as follows:

- Corp tax rate is 15% for businesses that make under 500,000 CAD a year
- Corp tax rate is 26.5% for businesses that make over 500,001 CAD a year

Given that paypal, stripe and other similar payment processors charge between 2.5% up to 3.5% or more, that pushes the corp tax rates to 15% + 3% (avg proceesor fee) = 18% and 26.5% + 3% (avg proceesor fee) = 29.5% respectifly.

Because of those high tax rates, it really cuts into the high ticket offers that i would be selling to customers.

With that said im interested in conducting real business in which i don't want to hide my assets or go anon. I just want the ability to save on the corp fees.

Now i do understand that personal Canadian tax is the real killer in all this but despite that, i plan on staying and living in Canada and have no desire to live anywhere else. Hence i would be pegged for the high Canadian personal tax rates.

I would like to know your thoughts on opening a corporation in the Bahamas as i heard its 0% corp tax rate. I do know that paypal and 2checkout would be the only alternatives that work with the Bahamas in that case.

So i would essentially be living in Canada avoiding the 18% to potentially 29.5% (if the business does well) in corp taxes since the business would be located in the Bahamas. Can anyone with knowledge or experience shed light onto this issue.

I just want the ability to setup my corporation, have an ebank account and even have the ability to use payment processors without any issues.

 

[fshore]

Given that paypal, stripe and other similar payment processors charge between 2.5% up to 3.5% or more, that pushes the corp tax rates to 15% + 3% (avg proceesor fee) = 18% and 26.5% + 3% (avg proceesor fee) = 29.5% respectifly.

Your reasoning is wrong. PP fees are not taxes, and the corp tax will be on the profit, after the PP fee is charged so the calculation is also wrong.
PP fees in Bahamas etc would be higher (even even possible to get PP there), and that would also be tax evasion.
Living in Canada there is no way to do this legally on a low budget.

 

[negon]

You need to focus on control and management of the company, regardless where you setup a offshore / onshore corp. you will have to setup the business like you would if it was a real one i.e. office, utility and even some sort of staff or real nominee.

 

[countryfree]

If you don't want to pay tax in your country, the one and only correct way to do it is to leave the country. Doing it any other way would only put you in trouble.

 

[happyjohn]

In an large setup where you have plenty of money to backup your offshore company which is setup explained by @negon already you have great chances to get it approved by the local tax office. I have got a official binding acceptance from my tax office that they accept my setup in Cyprus! Nothing is just white & black.

 

[Macky]

Dude why do you think that 15% corp. profit tax is too much ? It is awesome even if it is capped at max.500k CAD per year. Come to Europe and you will pay 30%, 40%,50% or even 70% tax in some countries.