Set Up offshore company and charge local company profit

[guy toronto]

Due to many factors, I cannot leave Canada.

I have one person company and have an online business. Work for 12 hours per day. And have to pay a lot of Tax.

My current accountant told me he is not familiar with international Tax.

Here is my plan.

1. Set up an offshore company in Belize.

2. Every month the offshore company charge my local company consulting fee. Or software usage fee.

So I can pay less tax in local. When I am ready, I will move to Belize in a couple of years.

Is this legal? I know google, apple are doing the similar things. I understand their accounts are the best.

If it is legal, I will find an account who is familiar with international tax.

Thanks all.

I am new to this forum and have learned a lot by reading the threads. Thanks for this great community.

 

[Juoffshore]

Not very legit, espacially if you are UBO of both company and if the two companies are managed from canada.

 

[mrbiggs]

Its legal if your friend owns the company and actually uses ur services

 

[Old Spice]

From experience, I know that a Canadian company has to keep 15% of the invoice when paying out to an offshore company. This was going back a few years so some things have probably changed. My guess would be if there is a double taxation treaty in place the 15% wouldn't apply.

 

[nitehawk]

Problem with your thought is that Canadians need to pay taxes on worldwide income. So if you earn a bunch of income in the Belize company and the Canadian government, who are cracking down on this hard, looks into this you will be you could be subject to additional tax. Some people get around this by making it look like they are not in control of the foreign company e.g. board meetings out of country, mind of operation out of country, nominee directors/shareholder etc. If you want to hide your income dont transfer any money back and forth. Use a 3rd party like affiliate advertising income to the Canadian corp.

 

[Samuel Newman]

in my humble opinion, UK LLP or US LLC incorporated NOT in your name, may work for you well
1) it would be better to use "onshore" company
2) it would work better with "darks" or professional nominees