Seychelles CSL & EU holding v Foundation & IBC

[roci]

Hi guys, I’m a newbie to this and spent the week reading through the threads –really fascinating (I read the Seychelles CSL one, the Seychelles foundation and the UBO v foundation). I am hesitating on a structure for my needs and I would love to get your feedback.

The goal is to minimise tax (even if I have to pay a bit its ok) as long as I can freely use my money to buy property in the EU if my business works out in the future and cash in crypto, with little risk of being audited. Cant afford a structure that will attract attention/audit for the field I'm in.

I am an EU resident (Ireland) and I work remotely as a consultant in different countries. I am not sure whether I will need a bank account, EMI might work for me. I am thinking of either:

a) a combination of a Seychelles CSL and an intermediate holding company in the EU.
Questions:
i) Should I pick an EU country with a DTA with Seychelles for the IBC (Jersey, Guernsey, IOM, Belgium, Cyprus)? If so, which one? (I would prefer a secure bank in Jersey/Guernsey)
ii) Does it matter that there is no DTA between Seychelles and my country of residence Ireland? And what does that mean for the Irish taxman -what would I declare?
iii) In this scenario, the intermediary company would own the property but where should my salary go to the CSL or the holding company?
iv) could I safely open a bank account with a holding company in the EU, considering my money would have been taxed already?
v) if I use an EMI, would it work for large transfers to buy property? And for crypto?

b) a combination of a Seychelles foundation (because it is a separate legal entity compared to a trust) that holds shares in a Seychelles IBC.
Questions:
i) I know the IBC could be in a different jurisdiction but Seychelles seems good as an option. Would you recommend a different country for an IBC?
ii) In this scenario, which one would own the property and where should my salary go to the CSL or the holding company?
iii) And what does that mean for the Irish taxman -what would I declare?
iv) would the Irish taxman tax me again on the money if I get audited?
v) I understand it would be hard to open a bank account with this set up, is there a chance an EMI might report me?
vi) is this model higher risk than the one above?

I know it’s a lot of questions but it seems like a complex structure for a newbie like me and I need to know it will work before I jump into it.

Recommendations for someone to incorporate are welcome!

 

[Martin Everson]

Hi welcome.

i) Should I pick an EU country with a DTA with Seychelles for the IBC (Jersey, Guernsey, IOM, Belgium, Cyprus)? If so, which one? (I would prefer a secure bank in Jersey/Guernsey)

Yes if you are serious about doing things properly. Well wait until outcome of brexit before touching those UK crown dependencies.

ii) Does it matter that there is no DTA between Seychelles and my country of residence Ireland? And what does that mean for the Irish taxman -what would I declare?

Although a CSL is considered tax resident in Seychelles and hence has access to DTA's tt does not mean much for Irish taxman as the place of effective control will always be Ireland where management (you) and operations (Consulting) take place. It would in effect be transparent for tax purposes. I am not familiar with the Irish tax code but you would have to declare any income you receive from the setup also or have local director and operations in Seychelles to get around this.

iii) In this scenario, the intermediary company would own the property but where should my salary go to the CSL or the holding company?

It can go wherever you want it to go.

iv) could I safely open a bank account with a holding company in the EU, considering my money would have been taxed already?

Yes you can. I am still trying to understand advantage of a Seychelles CSL and a EU holding company ???????

v) if I use an EMI, would it work for large transfers to buy property? And for crypto?

Absolutely not for large transfers. You will be lucky if it works with a bank. Crypto yes.

i) I know the IBC could be in a different jurisdiction but Seychelles seems good as an option. Would you recommend a different country for an IBC?

Seychelles is as good as any for an IBC.

ii) In this scenario, which one would own the property and where should my salary go to the CSL or the holding company?

Think you made cut and paste error with the question

iii) And what does that mean for the Irish taxman -what would I declare?

Depends on setup of foundation otherwise declare everything

iv) would the Irish taxman tax me again on the money if I get audited?

Irish taxman would put you under a microscope as this smells of a tax avoidance structure. You have no economic purpose being in Seychelles or connection to Seychelles so it is a red rag to a bull. You will be audited every year without fail possibly.

v) I understand it would be hard to open a bank account with this set up, is there a chance an EMI might report me?

Depends on the EMI. You should firstly try opening an account with e Seychelles bank that understand these structures. EU banks will just throw their arms up in the air in confusion. Traditionally people who use these structures have lots of money and approach 'private banks' to service them. Your normal bank may just through a sissy fit. An EMI at this stage may probably not report you but it is such a big risk as if rules become clearly as CRS progresses you are trapped with nowhere to go.

vi) is this model higher risk than the one above?

Both are high risk. The word Seychelles makes it high risk for bank/EMI. But plenty of EMI's need the business as long as cash volumes that go through it are not high and business activity is low risk they may consider opening an account but don't hold your breath. Please note in banking terms there is very little business activities left that are considered low risk :-(

For a newbie this is quite a complex structure when you consider tax implications, getting this structure banked and using it in practice for what it is intended to do. Why do consider a Seychelles company over a Jersey company for example.

If you want to pay no taxes. Then setup a Estonia company. Pay a guy a tiny amount of money each month to be director and be shareholder. Hey presto an EU company with zero corporate tax if you don't distribute any company income and easy online manageability. You could even work the EU parent subsidiary directive to your advantage in a future structure based on this.

Oh and go easy on the 12 part questions...people on here do have a life also ;-)

 

[WhiteAngel]

Hi welcome.
If you want to pay no taxes. Then setup a Estonia company. Pay a guy a tiny amount of money each month to be director and be shareholder. Hey presto an EU company with zero corporate tax if you don't distribute any company income and easy online manageability. You could even work the EU parent subsidiary directive to your advantage in a future structure based on this.

Hi @Martin Everson, I came from another question but this part looks very interesting for me as well. When you say "pay a guy to be director" do you mean a nominee director or a real one? Aren't there going to be problems:
1. This director can take control over your company
2. This person will have to pay all the taxes in Estonia as far as he's a director
Do I miss some key concepts?

 

[Martin Everson]

No you missed nothing. Yes they could steal your money but so could a bank like Reitumu did to customers in Latvia. There is always a risk if you involve a third-party in anything in general. You just have to balance the risk reward and get out of the idea of piling up money in bank accounts...hence the only risk is money in transit.

Yes they will pay everything in Estonia under a typical low Estonia wage.

 

[WhiteAngel]

Thank you for clarification, @Martin Everson !

 

[roci]

Thanks a million @Martin Everson

I will go slow on the questions. I'm just really in the dark. The international tax advisors I tried to talk to are all pretty useless. I need some real experts like you guys.

 

[hiju]

Why did you setup a CSL company at all to start with if I may ask ?

 

[blockchain4ever]

No you missed nothing. Yes they could steal your money but so could a bank like Reitumu did to customers in Latvia. There is always a risk if you involve a third-party in anything in general. You just have to balance the risk reward and get out of the idea of piling up money in bank accounts...hence the only risk is money in transit.

Yes they will pay everything in Estonia under a typical low Estonia wage.

I don't understand the Estonia angle. It's just deferred corporate tax. Why is that such an amazing thing?

 

[Martin Everson]

I don't understand the Estonia angle. It's just deferred corporate tax. Why is that such an amazing thing?

One day you will ;-)

 

[hiju]

I don't understand the Estonia angle. It's just deferred corporate tax. Why is that such an amazing thing?

you want to read about it and spend some time in order to learn how it works.

 

[blockchain4ever]

you want to read about it and spend some time in order to learn how it works.

I've known about the Estonia setup for as long as it's existed. I just don't understand how deferred corporate tax is such a big deal? Why would I do that instead of, say Cyprus? Or Bulgaria?