Selling business, need help with shell company

[ZedSWR]

Hi Everyone, I'm in need of some assistance with how to set up a offshore bank account and shell company before our e-commerce business is purchased.

I'll try my hardest to nut shell everything.

We are in the process of finalizing the purchase of our business, the funds will be transferred into our Australian registered PTY LTD bank account. My business partner are I hold equal shares in the company, as well as both being the only acting directors. Once the funds hit the company account we will be spiting the total as a dividend.


I'm really looking for a way to get the funds into a offshore bank account registered to a shell company , from there we can pay the dividend directly into our personal SC offshore accounts I'm not sure if its best to open a bank account in the same jurisdiction you create the SC, but from what I've read it doesn't matter. I also did have two scenarios/questions which I'm hoping you can assist me with, Is it possible to transfer ownership of our Australian registered PTY LTD to a shell company? If so is it has easy as transferring the funds from the PTY LTD account to the offshore account? option two, can I invoice a shell company the total amount of the sale. I would love to hear your suggestions on this topic and how A shell company can help me with the sale of my business.

All help is much appreciated.

 

[Tax Cow]

What is your goal, minimal tax at tax compliance or are you willing to cross the line of legality?

Depending on the sale sum and your ultimate risk tolerance, it could make sense to use crypto as the bridge. As long as you stay entirely in the banking system, your transaction records are retained and easily traceable for a minimum of 6 years.

 

[negon]

You can invoice a shell company 75 - 80% of the amount and pay tax from the rest locally. That would work on a long term basis. If you are looking short term and want to flee from the tax office just go ahead and invoice 100% it won't last long.

 

[Martin Everson]

Yeah....OP is not being clear on what exactly his goal is by looking to use an offshore company .

 

[ZedSWR]

Yeah....OP is not being clear on what exactly his goal is by looking to use an offshore company .

Sorry for not be clear on our objective, our goal is to reduce or eliminate our tax burden on a personal level. We will be splitting the total amount, none of the money will be left in the company account. I'm really just wondering how we can take the money off shore once the funds are in the company account and dividing it from there. I'm also not sure if getting the funds transferred straight into a off shore company is a better idea because the company hasn't been revised in the share structure? Cheers

 

[ZedSWR]

What is your goal, minimal tax at tax compliance or are you willing to cross the line of legality?

Depending on the sale sum and your ultimate risk tolerance, it could make sense to use crypto as the bridge. As long as you stay entirely in the banking system, your transaction records are retained and easily traceable for a minimum of 6 years.

Sorry for not being clear and thanks for posting a response. The main incentive for us is to reduce our tax burden on a personal level. None of the funds will be left in the company account here. Ideally we would like to transfer the money into an offshore account as soon as we receive the money in the local company account and from there we can split the money into our separate offshore accounts. I'm not sure if this involves us signing 100% ownership of the domestic company over to the shell company?

How exactly could we use crypto as bridge, and would this strategy be done at a domestic level or offshore?

In terms of legality, ideally a legal strategy, but we're open minded.

Thanks again for the help

 

[ZedSWR]

You can invoice a shell company 75 - 80% of the amount and pay tax from the rest locally. That would work on a long term basis. If you are looking short term and want to flee from the tax office just go ahead and invoice 100% it won't last long.

Thanks for the advice, I thought that would be a red light move. The company is very compliant in terms of paying tax and GST, but I'm looking into it on a personal level, would it flash red if we transferred our dividend portion to two separate offshore accounts? We would also leave a small portion lets say $50,000 in our personal domestic accounts and pay tax on that amount appose to the total, which might make it look less suspicious?

Cheers

 

[Tax Cow]

In general, I can give you this advice. An offshore corp won't have any value in your situation. There are valid use-cases, but it seems more of a last-second attempt to legally mitigate taxes and this will not work.

There are 2 main legal options and unlimited illegal options. Since you're selling a company, you're not dealing with candy money and the chances of getting someone on your tail as large sums are wired are much higher. If your interest is to continue living in Australia without constant worry, take the legal route. A clean reputation will also help you if you intend to start any new business ventures and need local partners or funding. Next time you engage in business ventures, take note that company sale should be prepared ahead in time if tax-effective exit is a concern.

a) Pay PIT in full. No offshore corp needed. Since there's no proper structure with advance tax ruling in place, an offshore corp will only add worthless costs and no value to your exit process. Perhaps the only viable option in your case.

This is for your next business venture (should you ever wish to):

b) Residency change before the sale. For a minimum of 2 years, you sever ALL ties with Australia (incl. moving your family and dependents outside the country). Register as non-resident and get a confirmation letter that you are indeed a non-resident for tax purpose before you formalize the sale. Australia has many territorial tax countries nearby, a Singaporean residency is perfect for the purpose as the country has 0% tax on foreign-earned income. Residency swap could potentially reduce your PIT to 0% but this must be planned alongside local tax professional ahead in time. If you are about to sell the company now, this won't work as the window has closed.

Good luck and congratulations on your successful exit.