FORM AN OFFSHORE COMPANY TO LOWER YOUR TAXES
At least 18 companies, including Nike, Microsoft and Apple, are stashing profits in offshore tax havens likely in a bid to avoid paying taxes, according to a new report from the Citizens for Tax Justice, a left-leaning research group. If the companies brought that money home, they would pay combined more than $92 billion in U.S. taxes, the report found.
Looks like the greedy high tax governments around the world are desperately trying to get their companies to bring back their money.
An easier solution would be to eliminate the individual and corporate tax rates and just have a sales tax or make the taxes so low it would not be worth it for someone to set up an offshore corporation to drastically lower their taxes.
These large U.S. International Companies use offshore corporations to get their taxes as low as possible because it is legal and anyone can do this as long as correct reporting requirements are filed to the correct revenue authorities.
You don’t have to be a huge company or making tons of money to exercise these tax strategies.
You need someone to coach you that has been doing this for years that can steer you in the right direction on how to do this correctly.
I was that guy at one time paying 45 percent of my income in state, federal, and social security taxes in the great USA.
I decided to learn these tax strategies that have gotten my taxes close to zero.
Before I relinquished my U.S. Citizenship many years ago there was no one to teach me these things so by trying to learn them myself I made a lot of mistakes.
If there was someone like myself that I could have consulted with that had a lot of experience in doing this, it would have saved me a great deal of time and money.
If you are making at least 150,000 USD a year or equal in another currency it will always be cheaper to pay our fee and learn how to dramatically lower your taxes than to continue paying ridiculously high taxes every year.
There is a different strategy for each person depending on where you want to go with the business you are in or the business you want to start.
Your strategy will depend on how you want to market your product or service, what languages you speak, do you want to do your business in a local market or in an international market and is the type of business you are in highly regulated where you will have to get an additional license like a real estate license, insurance license or a securities license?
Some countries require the owner of a company and also employees of that company to be a citizen of that country in order to work in certain industries.
Just the cost and hassle of moving and then finding out the country you picked to live in will not work out because of regulations by the government of this new country you chose that you did not foresee ahead of time.
The businesses that have less regulatory issues tied to them the easier it is to work your business.
If you cannot fulfill those regulations or requirements or not willing to do so then you have costed yourself a lot of time and money that could literally set you back a year or two.
Starting out I would definitely outsource your help on a contracting basis. This will keep your overhead cost way down.
The advantage to this is you pay for only work that is needed.
If an employee does not work out with the company you have contracted with, you can just get the contractor to replace that person plus if your business slows down you don’t have to go through the agony of laying off people.
I see companies all the time that hire people that are not managed well that waste tons of time for their employer and that money could have been invested in equities or real estate compounding their money.
How is an offshore company going to help you?
If you have ever been sued or ever gone through a divorce you know the importance of having your money protected from creditors. Having money outside the country you are living in under an offshore company can protect you from greedy lawyers or someone that knows you have money and they want some of it.
How is an offshore company going to save you on taxes?
If you have an internet type business, or you do international business, consulting, selling, you own or manage a hedge fund, or you trade currencies or equities, you can do these types of businesses and many more from almost any country in the world.
Why not do this type of business from a country that will not tax your income at all?
These types of businesses should be done with an offshore corporation from a country that is either a pure tax haven or has at least a territorial tax system.
A territorial tax system is one which taxes your company only on income you derive inside the country where your company is domiciled whether you reside there or not and not any income made outside that country and the country where you reside should also not tax income you make outside that country as well.
You can have your money in one country, your business in another country, where you reside in another country and then where you make your charges or invoices in another country and your citizenship in another country [see Flag Theory].
Once you move your business and yourself overseas you will see that your filing paperwork will drop and it will let you concentrate more on your business.
What is the best offshore company to set up?
A Hong Kong Limited Company might be the right type company to set up since it only taxes income inside Hong Kong at 16.5% but since Hong Kong has a territorial tax system it taxes income outside Hong Kong at zero percent.
If your Hong Kong Limited Company does business with Hong Kong residents or other Hong Kong companies, your Hong Kong Company will incur a corporate tax on that business.
A Hong Kong Company would have to be audited every year and that cost usually ranges between 1000-5000 USD depending on the amount of your transactions.
An Unincorporated Company set up in the Federation of St. Kitts or Nevis does not have to be audited each year but there is a real small tax at 4% of gross after a monthly exemption credit that the government gives every quarter and this is income made outside or inside St. Kitts or Nevis if regulated as a local company.
The Federation will not tax investment income at all as far as equities or bank interest.
Some types of businesses are not regulated at all and those companies would not be taxed at all on income generated outside of St. Kitts.
Even regulated exempt companies could make money outside St. Kitts or Nevis and still not pay any business or corporate tax.
It would depend on the business that you will be doing.
As you get older in life you will find that moving from one country to the next whether retired or running a business will get old if you are doing so to get around paying taxes in a country that taxes worldwide income.
That is why you should pick countries to live in that are either Pure Tax Haven Countries or countries that have a Territorial Tax System.
Most countries that have tax laws that tax worldwide income implement these tax laws on you if you live in that country about 183 days a year or more but every country is different.
If you are a U.S. Citizen, the above paragraph is obsolete because the U.S. taxes its citizens and it’s Green Card Holders on their worldwide income no matter if you have left the U.S. or not unless, for Green Card Holders, that card has been legally surrendered or if not a Green Card holder the IRS will look at the Substantial Presence Test to see how long you have been residing in the USA to see if you are subject to your worldwide income.
If you are an alien (not a U.S. citizen), you are considered a nonresident alien unless you meet one of two tests. You are a resident alien of the United States for tax purposes if you meet either the green card test or the substantial presence test for the calendar year (January 1-December 31). You can Google Search Substantial Presence Test to get the most up to date law on this matter but generally you should not stay in the USA more than 120 days a year to play it safe or the Substantial Presence Test would have been violated.
If all of your income is coming outside of the country where your company was formed such as Hong Kong, then a Hong Kong company might be your best choice.
You have to look at the fees to set up and run the company, where is your income or at least the majority of your income coming from and what are the taxes on that income [preferably zero], and what is the reputation of that country.
Panama has great tax laws but then Panama does not have the prestige that a Hong Kong Company offers plus Panama has been bullied around by the O.E.C.D. [Organization for Economic Cooperation and Development] countries for years.
Panama also has a hiring requirement for a certain number of Panamanian employees which is a cost factor that Hong Kong does not incur on you.
The OECD group of countries are composed of 36 countries most of which have high taxes and want other countries to have high taxes also on individuals and their companies.
Panama is so dependent on these countries even using the U.S. Dollar as their currency.
Panama seems to give in at almost every gesture that is thrown on them by this organization whereas Hong Kong is owned by China.
Hong Kong does have its separate legal system from China and China is one of the few countries that does not let the O.E.C.D bully them around.
I would have to consult with you to determine based on your business model what is the best option for you.
You would never want to set up a St. Kitts Corporation because the Corporate Tax rate in St. Kitts is 33%. Un-incorporated is the way to go if you pick St. Kitts and Nevis as your option but again your goal should be as close to zero taxes no matter what country you choose but meeting the goals of your business.
EXAMPLE OF COUNTRIES THAT HAVE A TERRITORIAL TAX SYSTEM IN PLACE:
Nicaragua, Grenada, Dominican Republic, Dominica, Panama, Belize, Costa Rica, Paraguay, Ecuador, Singapore, Thailand, Guatemala, Hong Kong, Gibraltar, Macau, Malaysia, San Marino, and Montenegro [ I would be wary of this last country because Montenegro has applied for EU Membership and once they get this membership more than likely they will be required by the EU to tax individual residents on their worldwide income.]
Believe it or not in most cases you will pay out less in total taxes if your company is set up and your personal residency is in a country that has a Territorial Tax System than using a Pure Tax Haven as long as you are retired or your income is made outside the country where your business is incorporated.
Example: Compare Panama and St. Kitts. St. Kitts has about a 53% duty when you bring goods into the country.
A car that you bring in, if over two years old, has even a higher duty at about 80% but no worry because those cars can be picked up in Japan for only 400 USD before being shipped into St. Kitts with only 15,000 miles on the car.
These are cars that are 10-15 years old with incredibly low mileage because Japanese don’t use their cars much except on the week-ends. They get to work by public transit.
By the time that car is shipped into St. Kitts that 400 USD car is now about 6900 USD including VAT, Import Duty, Environmental Duty and freight but you then have a car that has real low mileage for about 6900 USD.
Houses have similar high duties when bringing in supplies to build except a property that you use to qualify you for citizenship in St. Kitts and Nevis because the material to build that house is duty free since you bought it to get citizenship in St. Kitts and Nevis.
The reason these other taxes are so high is there is no individual income tax in St. Kitts and Nevis and only an un-incorporated business tax of 4%.
The money has to be made up somewhere but remember a spending tax can always be avoided by not buying the item or buy it used and you cut your own deal with whoever you buy it from.
If you have a lot of income coming into your business and it is coming from a local business in St. Kitts, then St. Kitts would be better than Panama if the income is the same in both places because Panama has about a 25% tax rate and 22.5% social security tax but you escape all this if your income is made outside of Panama.
The cost for food and building materials is cheaper in Panama than St. Kitts and Nevis unless you buy citizenship property because there is no duty on the building materials when citizenship property is bought.
As far as total taxes go, I would pick Ecuador over the Cayman Islands if you are trying to pick the country to live in that has the least overall taxes.
Both countries you will pay no individual tax or corporate tax if your money is made outside the country but a lot of import duties and fees you would incur in the Caymans you would not have in Ecuador.
Ecuador has an income tax for income made inside Ecuador and this makes up for these high import duties and fees which the Cayman Islands charges which are basically taxes but you would avoid the local income tax in Ecuador by your income being made outside the country.
In the Cayman Islands, the Government brings in income by relying primarily on customs duties, fees for work permits issued to expatriates, a variety of business licenses, tourist accommodation tax and various fees imposed on financial services and tourism, the key industries there. Typically, the import duty is 22% on any item imported into the Cayman Islands, although the levy will vary on certain goods including vehicles, wines, spirits and some food items. Work permit fees range from the low CI$100s to CI$24,000 per permit per year and are set to rise.
The above fees would be a lot lower or not exist in Ecuador because Ecuador has an income tax locally but if your income is made outside of the country you would avoid this tax.
The problem with Ecuador is it is a Spanish speaking country and I myself do not like living in a country that English is not the main language and there are very few people [2%] at best of the total population that speak fluent English.
I almost died in the Dominican Republic one time because a Pharmacist did not understand my problem because his English was so bad and this guy gave me the wrong drug to take for my problem.
No matter what high tax or medium tax country you are currently living in there is a low tax country somewhere you can have your business in that will save you a lot more money in taxes so you can reach your goals faster.
Just think how much you could save if you are now paying 50% of the money you make in taxes and you could reduce that to 1-2%.
You need to have the right team to make sure you are in compliance in the tax jurisdiction your business is working in and based on what your citizenship is.
We will work with you to make sure you are in compliance.
WHAT IS YOUR NEXT STEP AFTER SETTING UP YOUR OFFSHORE CORPORATION?
Once the offshore corporation is set up you then would need to set up a bank account where you can charge people for your services or product.
You may or may not have to travel to the bank depending on your citizenship, where the company was incorporated, and what country you plan to do your banking in.
You will feel relieved when the company account is set up because your asset protection will be a lot better and you will be on your way to solving your tax problems.
IT IS GOOD TO HAVE YOUR:
- Banking in one country
- Residency in another country
- Your company formed in another country
- Your citizenship in another country
POPULAR COUNTRIES THAT A LOT OF PEOPLE USE FOR THEIR OFFSHORE COMPANIES ARE:
Belize, Cook Islands, Anguilla, Gambia, Cayman Islands, Antigua, Nevis, St. Kitts, Seychelles, Mauritius, British Virgin Islands, Hong Kong, Singapore, Bermuda, Bahamas, Jersey, and Isle of Man.
COUNTRIES WHERE ENGLISH IS EITHER WIDELY SPOKEN OR THE MAIN LANGUAGE THAT HAS NO INCOME OR CORPORATE TAXES ARE:
Kuwait, UAE, Anguilla, Bahamas, Bahrain, Bermuda, Cayman Islands, Guernsey, Jersey, Sark, British Virgin Islands, and Vanuatu
IT IS IMPORTANT THAT YOU COMPLY WITH THE TAX LAWS IN YOUR COUNTRY AND WHY WOULDN’T YOU IF BY DOING IT THE CORRECT WAY YOU CAN STILL GET YOUR TAXES CLOSE TO ZERO.
THE USA HAS SOME OF THE STRICTEST FILING REQUIREMENTS IN THE WORLD AND IF YOU DO NOT COMPLY WITH THESE FILING REQUIREMENTS YOU CAN GET SEVERE PENALTIES AND INTEREST CHARGES AND EVEN GO TO JAIL. IT’S BETTER TO DO IT THE RIGHT WAY.
Whether you are in the USA or outside the USA and you are a U.S. Citizen or Green Card holder and you have a problem with the tax system in the USA, then just relinquish your U.S. citizenship or give up your Green Card if you are a Green Card holder but make sure you have a new passport before you give up your U.S. Passport if you are a U.S. Citizen.
If you have an offshore company and you still have ties to that other high tax country, you need to declare any type of ownership whether that ownership is direct or indirect.
Some offshore jurisdictions have no auditing requirements and then some do. Some have no company fee or licensing fee requirements and some do. Some have business, personal income and corporate taxes and some do not depending on where the income was derived and if the country has a territorial tax system or is a pure tax haven.
Some have no corporate or individual taxes whether you do business in the country or outside the country and some do.
Our job is to steer you in the right direction by:
- Helping you set up an offshore bank account
- Get a second passport
- Set up an Offshore Company
- Get a second residency
I have helped many people solve their tax problems but you have to be committed to take the first move for me to help you or either continue to get beat up by the tax man year after year.
If you are committed to want to learn the offshore system in lowering your taxes, you would have to fill out our online question application on our website.
If you are not 100% committed, I don’t want to start the process with you.
Our consultation is NOT FREE. I am sure in your business you don’t work for free and neither do we. If you cannot make a total commitment in moving forwards, then maybe you should hold off and just read the FREE information again that will educate you more on our website or look more at our FREE videos.
A phone call will be made to you after we have qualified you after you have answered our online questions and they have been sent back to our company.
We will then evaluate these questions you have answered to see if you are a good fit for our company to work with and to start the process.
Our fees are not cheap but our service is well worth what we are paid.
If you are looking for the cheapest of everything you can find but without the valuable advice then I will not be able to help you.
The guy in Panama or Belize that sells you a cheap corporation will not know or understand your tax problem or regulatory issue and by him not knowing this will cost you a lot of lost time and money.
I have been there and know how to solve your problems.