Question regarding CFC and how to get past it

[keildakota]

Hello,

We've been looking into incorporating an offshore company for tax avoidance. I currently reside in Sweden, and thus will be subject to CFC (>25% ownership). Now for my question, are there any ways of avoiding these laws legally?

What we've thought about;
* Becoming a citizen of Switzerland to own a holding company there
Possible, but ideally not
* Splitting % of ownership between family members
Risky, and they'd have to live in different countries to an extent (might be doable for now, but laws could change at any time)

Any thoughts?

 

[fshore]

Swiss citizenship wouodnt help if you reside in Sweden.
Splitting ownership wouldn't work if its a nominee, not actual ownership.

Best option would be to incorporate somewhere that wouldn't be considered a cfc, like in EU or possible a country that has a tax treaty with Sweden. You'd of course also need to run the business from there because of corporate tax residency.

 

[keildakota]

I see that's interesting, what if on paper I reside in Switzerland but in reality just live somewhere else?

 

[fshore]

There would be many possibilities if you don't intend to do this legally. Not recommended.
Check with a Swedish tax expert for your best options.

 

[keildakota]

To clarify, what I meant was that I will still pay taxes there and everything, but I will live in a different country

 

[Silvio]

Legally- maybe but it will cost you as you will have to set up real directors in the place where the company is managed and PROVE that they are actually doing real work on that place and actually manage the company. For example you open a Romanian company that pays 1% tax, and have actual romanians working there and managing the company. But still I am not sure it will work as it depends on the Swedish tax office, so you absolutely need to speak to a Swedish accountant.