Question US Citizen offshore corporation CFC avoidance

[alfonsesimone04]

Hi, first post on here so I apologize if this is in the wrong place.

I am a US citizen with multiple online social casino businesses, have been heavily looking into potential offshore solutions for the past months now, and it seems like no matter the structure of your corporations and trusts you will still be considered a CFC by the IRS.

Is there any exemption if the corporation's principle place of business is somewhere else. For example if I form a Cyprus company, and have it rent and office and pay the 12.5% tax there, would this make the company non foreign controlled?

Another method of avoidance could be to have a foreign director open a bank account, but it seems like for almost all offshore banks the UBO has to be disclosed. Are there any banks that do not require full UBO disclosure?

EDIT: Another potential strategy I came accross, this one seems a bit more on the grey side is to obtain a second passport, and use that passport to open all bank accounts and leave out the info about your US passport.

Open to any other solutions. Thanks.

 

[troubled soul]

1. Structuring the CFC as a passive foreign investment company (PFIC): A CFC that is structured as a PFIC is taxed differently than other CFCs, and may be subject to lower tax rates.
2. Using a foreign tax credit: If the CFC is taxed by a foreign government, the US citizen may be able to claim a foreign tax credit to offset their US tax liability.
3. Structuring the CFC as a tax treaty country corporation: Some countries have tax treaties with the US that provide for lower tax rates on certain types of income. If the CFC is organized in a country with a tax treaty with the US, it may be eligible for lower tax rates.
4. Using a domestic international sales corporation (DISC): A DISC is a US corporation that is taxed differently than other corporations, and may be eligible for lower tax rates on certain types of income.

 

[CyprusBusiness]

Hello

Being a US national makes you subject to US tax liabilities no matter the structure you will opt to create.

However, with correct tax planning you can achieve great tax optimisation. A Double Tax Treaty exists between USA and Cyprus and your status needs to be reviewed in accordance with the provisions of the DTT. Other matters may also arise that you will need to address such as ATED (including hybrid mismatches rule), substance requirements, PE rules.

Happy to PM you if you need more info.

 

[alfonsesimone04]

What kind of effective tax rates can you get when using Cyprus given this double taxation treaty?

 

[alfonsesimone04]

I came accross this, this seems like a good path forward considering a crypto exchange aswell as a EMI are definately financial instituions.

https://www.mayerbrown.com/public_docs/misc_section954_121207.pdf