Will this setup work?

[mlmtl]

Hello,


New here, but have a bit of experience on the subject. Still I want your input to know if this setup will work:


Canada 1 Corp.


This corp. offer web service to profesionnal in a specific business aera. Sale force will be in canada, hosting and minimal tech employe.


Canada 1 Corp. will enter in a licensing agreement With Offshore 1 Corp.


Canada 1 Corp. will pay a 75% licensing fees on revenue to Offshore 1 Corp.


Offshore 1 Corp. provide technical services from india/pakistan/... to Canada 1 Corp.


Offshore 1 Corp. provide the rights tu use the technologies to Canada 1 Corp.


Offshore 1 Corp. transfer profit to Offshore 2 Corp.


Offshore 2 Corp. loan money to Canada 2 Corp.


Canada 2 Corp. use the loan to buy real estate, do developpement projects...


Canada 2 Corp. pay interest and do the full repayment to Offshore 2 Corp.


Thanks

 

[zack]

Consult a local tax consultant to help you out.. it seems the structure is OK and can work. But when the source of funds is Pakistan and India it may turn on some red lights somewhere.

 

[craigs]

You simply need a legal tax adviser to check what the laws and regulations in Canada are towards such a setup. Otherwise the setup seems pretty good, thank you for the lead actually.

 

[alain]

I consultatet a legal adviser in business and loan agreements are legal tools to be used to transfer money non taxable between 2 comapanies. He recommends the loan document get apostilled and notarized.

 

[JohnLocke]

I consultatet a legal adviser in business and loan agreements are legal tools to be used to transfer money non taxable between 2 comapanies. He recommends the loan document get apostilled and notarized.

I agree with you, if the company is setup accordant and the loan agreements "real" you should not have any problems by using a loan as an instrument to transfer money between 2 entities.