Would I pay taxes in my country?

[busybee]

I am in the process of setting up a business with several partners, involving a total of four countries. We were thinking that it might be better to set up as an offshore company rather than trying to figure out laws of four countries. Does this make sense? If we did this, as I'm an American, would I still pay taxes in the US?

 

[webdriller]

If you go and setup an offshore company, regardless of in which part of the world, you will always be subject to personal income tax. There might be ways around how you legally can avoid it, but that’s a different story.


However, the company itself doesn’t have to pay any tax depending on where you are going to form your company, as for instant countries like Cyprus, Seychelles, Belize etc. you can setup the company to pay 0% Tax.


Hope it helps.

 

[cherokeeflyer]

So, if you setup a company in a country like Cyprus with 0% corporate tax, and say the company is an 'investment' company, do you only pay personal taxes in your country of residence when you receive a distribution from that company?


Meaning, can income stay within the offshore company and be reinvested without paying taxes (personal or corporate) on annual investment income, and only pay taxes when the money is taken out of the company?

 

[SysOp]

Well, if you have a IBC company in Cyprus the company will not have to pay any TAX, however if you take some money out of the company and transfer it as for instant payroll you as a person will be subject to TAX in your home country / country of residence. There are ways around this but I won't go and publish it here.


The income can stay with the offshore company and you won't pay any TAX if the authorities in your country of residence don't know that you have a offshore company, if they know it will be different but it again depends on which country you are a resident of. For instant in many European countries the TAX authorties would not accept that you keep the money in the offshore company without paying tax if your only income source is this company!


Again there are workarounds on this and some loopholes but you should speak with one of the professionals to get the answer on this.


I can just speak for ourselve which we created a great setup for our purpose.