Business: The Money Blue Prints Of The Mega Rich You Can Swipe
A Start-Up Entrepreneurs Guide To Massive Profits And Keeping it All.
Š 2016 Tenlavi All rights reserved. All rights reserved. No part of this publication may be reproduced, distributed or transmitted in any form or by any means, including photocopying, recording or other electronic or mechanical methods, without prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law. The use of trademarks is not an official consent by the trademark owner for the re-use of the eBook or brand. All trademarks and brands in this book are for clarifying purposes only and are owned by respective owners
Contents Introduction CHAPTER1: The money strategies of the big companies: 2 case studies. CHAPTER 2: Go offshore to realize tax benefits CHAPTER 3: Offshore tax benefits CHAPTER 4: Incorporating in Europe CHAPTER 5: Offshore legal entity CHAPTER 6: Offshore funding CHAPTER 7: Your internet business is better offshore CHAPTER 8: Asset protection Conclusion
Introduction You might have heard about offshore corporations and thought they are the domain for the international jet set. Well, things are changing. The barrier of entry is lower than ever. You will easily find information about offshore incorporation out there. Incorporating offshore is now feasible not just for multinationals, but also for small and middle-sized business owners. If you run your business from your laptop or you run a small local business, you can now enjoy the same benefits which have been enjoyed by the rich and the powerful for decades including: International asset protection; Effective tax mitigation; Cost effective business funding; and Protection from litigation, among other benefits
A World of financial Freedom Awaits You but only if you choose offshore incorporation Tired of the red tape and heavy rules associated with doing business in your country? It is particularly hard to do business in the US. It is time you consider incorporating
offshore to enjoy the freedom of doing business in entrepreneur-friendly countries such as Belize, Singapore, BVI, Panama and Seychelles. You Deserve More Offshore incorporation means more freedom, more privacy, anonymity, and of course, more tax breaks. It is a world of more Offshore financial centers allow individuals and companies to gain tax advantages, preserve anonymity, do business in entrepreneur-friendly countries without red tape and heavy rules, forge business alliances across national borders and diversify their investments. Legitimate use of offshore companies will lead to many benefits. If you are honest, you can take advantage of offshore incorporation in a good way.
CHAPTER 1: THE MONEY STRATEGIES OF THE BIG COMPANIES – 2 CASE STUDIES There Are Loopholes In The Tax Code: Big Businesses Know About Them Big businesses use tax loopholes all the time. For instance, consider Boston Scientific. This company manufactures in Ireland and sells all over the world. Boston Scientific pays only 12.5% tax from sales to Ireland instead of paying 30% to the IRS. You may be thinking, “This is great, but I do not have plans to open a billion dollar medical device production plant in Ireland.” Well, you will be amazed to know that it is much easier for a small enterprise to capitalize on the money strategies used by Boston Scientific, especially if it is an e-commerce enterprise, service business or you are an expatriate. Here is why: In the US, a foreign corporation has to pay US income tax, if any of the following applies: It is a foreign corporation with a permanent establishment in the US such as workshop, factory or office. Has US-source income or is engaged in a US trade. For the case of businesses producing inventory, income source is where inventory is produced. For service businesses, source of income is where services are offered. Enterprises selling inventory have their income source where goods are sold. If your business does not meet any of these two conditions, you simply are not eligible to pay US tax. As you can see for yourself, these two rules favor many types of businesses and will facilitate tax avoidance for these businesses: E-commerce businesses; Service providers; Overseas manufacturers; and Expatriates who own businesses Foreign companies that are favored do not have to pay US taxes. However, they may be subject to pay tax where they operate, but many offshore jurisdictions including Singapore, Cayman Islands and BVI, do not tax companies on income earned in other countries. With this loophole, the company is free from corporate taxes. An Example of How Your E-commerce Business Can Pay 0% Tax & Have $25 Million by the End of 10 Years Here is an example: You own an e-commerce company based in Cayman Islands and you are a US citizen. You do not have any US-source income neither do you have a US permanent establishment. Therefore, you do not satisfy either of the two conditions for paying US tax according to IRS rules. Therefore, your company does not pay tax in Cayman Islands neither does it pay tax in the US.
Let’s assume the annual net profit of your company is $1 million. This income is not distributed as profits. All the profits are invested with an annual return of 20%. When the 10 years come to an end, you will have accumulated at least $25 million. If your business were to be in the US with a corporate tax rate of 30%, by the end of a decade, you will have only $13 million, which is $12 million less. This example shows that a properly structured foreign corporation can make you $12 million more. This is the power of compounding tax deferred profits. Without US source income, you do not pay tax to the IRS; and If a business does not have US permanent establishment, the business does not pay taxes to the IRS. Google Moved $12 Billion to Bermuda to Dodge Taxes You might wonder why Google with all its revenue finds it necessary to avoid taxes. But coming to think of it, it just doesn’t make sense to pay the insane American tax rates, no matter how rich you are.
You will be baffled that almost all billionaires in the planet are doing all they can to legally minimize their tax liabilities while most middle income individuals are not even using the most basic tax avoidance strategies. Big American companies have avoided more than $60 billion in taxes, in a period of three years. They exploit every loophole in the tax code. The costs of this avoidance are passed to small businesses and American taxpayers. With UK revenue amounting to 24 billion pounds, Google is paying taxes of only 200 million pounds. Google enjoys a tax rate of only 6% for its non-US profits. This is a quarter the average tax rate in its foreign markets.

In 2014, Google Moved $12 billion to Bermuda through the Netherlands. This is part of a structure that allows Google to earn a big percentage of its overseas income tax free. Google Netherlands Holdings BV accounts show that in 2014, Google transferred a big part of its revenue from an Irish affiliate, to an Irishregistered, Bermuda-based company named Google Ireland Holdings. Most nonU.S. revenue of Google is usually channeled to this holding company.
Read on and you will discover the actual strategies used by Google to dodge taxes.
CHAPTER 2: GO OFFSHORE TO REALIZE TAX BENEFITS Take Advantage of Existing Loopholes in the Tax Code If you are an entrepreneur, then you are chasing success. Actually, it is within your grasp if you apply tax optimization facts that have been presented in this book. If you are a real entrepreneur, you know one thing: it is all about the bottom-line. Exorbitant taxes eat your bottom-line. Being smart means optimizing your affairs to pay the least taxes possible. What Is Wrong With The US Taxation System? If you find the US tax system to be the greatest burden you have to deal with, you are not alone. You might have developed a special dread for the IRS and the mere mention of the word, “tax season,� is enough to make you have a bad day. Many Americans complain about the unforgiving American taxation system that requires worldwide tax reporting. This is something I find very Stone Age. Honestly, of all the OECD and G8 countries, US is the only one that requires individuals and businesses to report not only incomes earned within the US but also incomes earned in other territories. Other developed countries have territorial reporting system; you report only the income earned within the country. The American taxation system is in urgent need for reforms. The two main reasons why you should open an offshore company is the worldwide taxation system of the US and the high US corporate tax rate. Are You Working For The IRS? The US has one of the highest corporate tax rates in the world. There is no reason why close to a half of your business income should go to taxes. US tax rate is 35% and that is just federal tax. When you factor in state tax, you will end up with a 40 percent tax rate. This is insane! Almost a half of your small business income is going to taxes, while the big corporations are dodging most of the taxes. Thousands Renouncing American Citizenship Because Of Taxes I never thought it will be this alarming. It seems more and more people simply do not have the stomach for the exorbitant US tax rates. If you know a thing or two about the IRS then one of them has to be that the IRS can milk you dry. It is a merciless organization that not only goes after your domestically earned income but also pursues your foreign-earned income, to tax every cent of it. This does not happen in other countries.
Are you working for the IRS? You need to seriously ponder on this question. You will be surprised to know that the big corporations like General Motors and Google that are in a position to pay these taxes, are the ones that are using ridiculous tax loopholes to escape taxes. More Companies Are Ditching America to Reduce Taxes If you are thinking of incorporating offshore, you are in good company. Google, Microsoft, GM, Apple, and Boston Scientific among other companies, have offshore holding companies for tax mitigation reasons. American companies incorporating offshore is definitely old news. What you might not have heard of is companies forsaking their American residency in a bid to cut taxes. This is not a new trend in corporate America but it is being redefined by companies like Pfizer. US companies are choosing to be acquired or merge into foreign companies with the goal of shifting tax obligations to a low-tax domicile.
CHAPTER 3: OFFSHORE TAX BENEFITS Be Smart about Taxes You are an entrepreneur. Your major concern is maximizing revenue and minimizing expenses. Tax is a major expense. Honestly, you are not working for Uncle Sam. This does not mean that you want to evade taxes. Truth be told, you are ready to comply with all government requirements by paying all your due taxes on time. Of course, you are smart and you know that the cost of incompliance is very high, especially here in the US. You should not only be smart in relation to compliance. You should also be savvy enough to know that the kind of taxes charged in the US, will eventually kill your business especially if you are in the SME sector. Entrepreneurship is not an easy road. If you are starting out, the challenges are many. Cash flow is one of the biggest problems and the unfriendly tax rates really drain the small income that is left at the end of the day. If you are like me, you believe that taxes are one of the biggest drags in the US economy. One thing is very clear: you want to minimize your taxes. If you care about the success of your business, you will pay attention to the tax optimization strategies presented in this chapter and implement them in your business. Make Direct Tax Savings with This Trick If you are a US citizen and want to make some direct tax savings to the tune $100,000 each year, the trick is simply moving out of the US. This is a terrific first step. As a US expatriate, $100,000 of your overseas income will be exempt from taxation. If you are an entrepreneur, you can take advantage of this provision. If your business is location independent i.e. online business, you can simply move out of the US and you will not have to pay taxes on the first $100,000 of your foreign sourced income. The Real Tax Advantage of Running an Offshore Company as A US Citizen This definitely has to be tax deferral. If there is anything good or pleasant about the US taxation system then it has to be this. One of the only things you will love about the US tax system is the tax deferral provision. Take full advantage of this by incorporating offshore and retaining income in your offshore structure. Tax deferral means you postpone the payment of taxes into the future. If you operate an enterprise abroad and you reinvest profits within your business, you can defer taxes indefinitely. Let’s assume you have a profitable business aboard. Now imagine that you are not paying taxes on profits every year. Instead, the profit is reinvested back in your company as capital, for a period of 30 years. You can decide that you will only pay taxes when you decide to sell your business at the end of 30 years. This will be a truly exceptional opportunity because of the power of compound interest and the ability to reinvest your profits as capital, tax free.
Make Sure You Report Your Offshore Earnings If you are a US citizen and you live out of the US earning foreign income, make sure that you report your offshore earnings every year, even if you are using offshore tax optimization strategies and you are not eligible to pay taxes. Not reporting your offshore earnings can get you into serious trouble with the IRS. Double Irish, Dutch Sandwich: The Tax Strategy that Google Uses With this no tax paying secret opportunity, used by big corporations like Google, a combination of Dutch and Irish subsidiary companies are used to shift profits to no tax or low tax countries. First, profits are sent to one Irish company, then to a company in Netherlands and lastly to a second Irish company that has its headquarters in a tax haven. With this technique, Google has been able to dramatically reduce its taxes.
Tax Inversions What Donald Trump Has To Say about Tax Inversions The inversion train is picking up speed. Donald Trump has called tax inversions, “disgusting.” It is amazing when Trump finds your cash generating scheme repugnant.
Tax/corporate inversion occur when a company changes legal residence for taxation purposes. An inversion happens when a US company shifts its tax domicile abroad through a merger or acquisition with a non- US company. Tax inversion is simply moving a corporate address abroad for tax benefits. It is becoming an attractive alternative for companies. Bloomberg reports that since 2012, 14 American companies have reincorporated overseas. About 44 US companies are planning corporate inversions. For corporate inversion to work, shareholders of the foreign company have to own a minimum of 20 percent of the stock of the company to be inverted. There Are Billions of Dollars’ Worth of Reasons to Re-domicile If your company has significant foreign income, changing the tax domicile of your company (corporate inversion) makes a lot of sense. Look at a company like Apple for example; it holds $137 billion in un-repatriated profits. If Apple wants to totally avoid paying US taxes on un-repatriated foreign income, the best bet is an inversion. As a small business owner, you might have heard about the benefits of having an offshore company and an offshore bank account. At this point, you probably understand that you can defer taxation on the profits earned by your offshore company. However, they will be taxed at one time or another, even if it is 30 years later. You can defer taxation but you cannot avoid it. However, if you have the idea of totally avoiding your undistributed profits being taxed when you decide to distribute them, you should probably strategize to merge or be acquired by a company in a low-tax or zero-tax domicile. Most of Apple’s revenue comes from international sales. At the moment, if Apple sells an iPad in China, it has to pay US tax on the sale. Earning international sales and being taxed at the American taxation rate will have a significant impact on
your after sales profit. To eliminate that impact, changing the tax domicile of your enterprise is advised. Companies That Ditched America or Plan To 1. Medtronic Medtronic manufactures spinal surgery materials and heart devices. This company is planning to ditch America through a $42 billion takeover of Coviden, a company headquartered in Dublin, Ireland. The operational headquarters of the company will remain in USA. 2. Pfizer Pfizer merged with Irish drug company Allergan, in 2015. The merger was valued at $160 billion. This was a tax inversion. As a result, Pfizer reconstituted itself into an Irish company with the goal of paying lower taxes. 3. Glaxo SmithKline
CHAPTER 4: INCORPORATING IN EUROPE Your Best Tax Saving Opportunity Is Waiting For You in Europe Are you doing business in Europe? If so, read on to discover the smartest EU strategy that will save you money and help you be successful in your business. For your prosperity, apply this information about incorporating in Europe to your business. If you do not yet have a company incorporated in Europe, just know that you are missing out on a lot. If you are trading within Europe, you will be interested in opportunities for reducing both VAT and tax burdens. A Swiss trading company is one of them. Combining this company with a tax efficient offshore structure, will deliver you many tax benefits. Switzerland will provide you with the best opportunity to do business in Europe. Ireland, Netherlands and Switzerland are emerging as the favorites for those who want to incorporate in Europe. The Lucrative EU Market Many American and Chinese entrepreneurs just cannot resist the lucrative EU market. There are many business opportunities in the EU. There is a lot of money to be made in Europe considering that the Single European Market (SM) is the world’s largest common market. Why Do All American Companies Want To Move To Ireland If you are planning to incorporate offshore but you do not have any ideas, think Ireland. Ireland’s corporate tax rate is a mere 12.5%. Compare this with the 35% corporate tax rate of US. Although you can take advantage of loopholes in the US system to reduce your rate, it is not still worth it in comparison to the Irish system because the US system is very complicated and even if you will reduce your rate, it will not reduce by much. The Starbucks Story Very little tax is paid by the Starbucks Corporation. This corporate group is operated through two companies in the tax haven of the Netherlands. A Swiss subsidiary delivers coffee beans that are roasted in Netherlands. This facilitates shifting of profits from Netherlands to Switzerland. An Example of Tax Efficient EU Trading You can create a company in Switzerland. This is not part of the European Union but is part of EFTA. Therefore, a Swiss company will largely comply with the VAT legislation of Europe defined under the 6th VAT directive 2006/112/EC. The Swiss company you have created will sell to EU customers including those in the UK, at a VAT rate of 8% as opposed to 20%. This will increase profitability. When it comes to corporate tax, Switzerland levies 14% to 34%. The average Swiss corporate tax rate is 21.6%. This is less than what is charged in the UK or US. Swiss Offshore Structure You can setup an offshore structure to lower your Swiss taxes and subsequently boost profitability.
ďƒź The Swiss company, you have setup can control a Panama Private Interest Foundation that can own a Cypriot Company. ďƒź You can make an intercompany agreement between the Swiss Company and the Cypriot Company that provides that Cypriot company invoices the Swiss enterprise, for services provided. This will leave the Swiss Company with substantially reduced profits meaning lower taxes. It will ensure that a big percentage of the profits end up in Cyprus with a 10% corporate tax rate.
CHAPTER 5: OFFSHORE LEGAL ENTITY The corporate vehicle that will contain your offshore business is what is called a legal entity. You may be wondering whether to go for offshore LLC, corporation or a sole proprietorship. Most Businesses Do Not Survive Past the 5th Year They say that most enterprises do not survive past the 5th year. I once read that enterprises that incorporate are 40% more likely to last more than five years. Why is that? The answer seems pretty obvious. By doing things right such as choosing the right legal entity for your offshore business, chances are that you are also doing “the right things” in other areas of your enterprise. Incorporating the right way also shows that you take your business seriously and are ready to do anything it takes to make it successful. Here is How to Choose the Right Legal Entity for Your Business Choosing the right legal entity will have enormous estate planning, liability and tax consequences. Let’s have a look at the options you have: First and foremost, let me point that there just isn’t one “best” business entity. The legal entity that is ideal for you will depend on the kind of enterprise that you have and your business objectives. 3 Important Considerations Choosing a legal entity for your offshore business comes down to three considerations. Asset protection; Estate planning; and Tax issues. The Sole Proprietor The sole proprietor gets no tax benefits, no estate planning benefits and no asset protection. Basically, as a sole proprietor you just hung a shingle on your storefront saying that you are in business. The only advantage you have being a sole proprietor is simplicity and affordability. If you are operating a sole proprietorship offshore, you may want to rethink your business structure. Limited Liability Company For a long time, LLCs have been required to have at least two members. However, presently, you can have a single-member LLC. With this arrangement, you are taxed by the IRS as a sole proprietor unless you elect to be taxed differently. When to Use: 1. Offshore LLC with one member- This is a disregarded entity. It has simplified US reporting requirements. Therefore, your annual maintenance cost will be low. Use this:
If you are a US resident who wants to have an offshore bank account for asset protection; For managing your IRA; and For holding your international business expected to have net profits not exceeding the Foreign Earned Income Exclusion.
2. Multi-member offshore LLC- This is reported as a partnership. It has complex tax return and is a flow-through entity for American tax purposes. This structure is perfect for joint venture arrangements. Finally, There Are Corporations Your business can be a standard corporation. This is the type of corporation you most likely know of, if you have some business knowledge. If you are a dentist, therapist, doctor or lawyer, you can have a professional offshore corporation. There are many kinds of corporations. Just think of all of them as regular corporations. An offshore corporation is an offshore company that is taxed and organized as a corporation. Offshore LLC or Offshore Corporation An offshore corporation is also called offshore IBC or International Business Company. Offshore corporation is a distinct and separate entity from its shareholders. On the other hand, offshore Limited Liability Company (LLC) is tied to its shareholders. This is because it is a pass-through entity for the purposes of US taxation. Both offshore LLC and offshore corporation offer the same level of asset protection; and
ďƒ˜ The main difference is how they are treated by the tax code. When to Use Offshore Corporation If your company usually generates net profits exceeding the Foreign Earned Income Exclusion amount, then you should opt for offshore corporation. This structure is ideal for active businesses. It is also suitable for complex offshore IRA structures. Other Types of Offshore Structures 1. Disregarded entity- This is a single member offshore LLC. It is ignored for taxation purposes. It is suitable for holding IRAs and for asset protection. 2. Offshore Will Structure- This is created for passing an individual’s estate to an offshore beneficiary. This makes it difficult for creditors, in laws and dissatisfied family members to benefit from an estate once the estate owner dies. The sole purpose of this structure will be to benefit particular nominated persons. The best way to protect your estate is by nominating an offshore beneficiary. The beneficiary will not have control of your asset. Therefore, you can enjoy the use of your asset while you are still alive. 3. Offshore Captive Insurance Company- This is established to access insurance premiums at wholesale/cheaper rates. With this structure, you maximize tax deductions for insurance premiums. There are many types of offshore structures. You can easily be spoilt for choice. It is advisable you discuss your needs with an accountant and a lawyer. These professionals will help you to make the right choice.
CHAPTER 6: OFFSHORE FUNDING There is Just Very Little You Can Do with Onshore funding as The Fees Are Steep Tired of local regulations that limit the amount that will be received from onshore funding? Interest payments, tax deductions and loan fees and many other charges make onshore funding a raw deal. Not to mention the hidden charges! If you can access funding offshore, onshore sources of finance should absolutely be the last choice. You Can Raise More Cash with Offshore Funds Once you have set up an offshore company, you will discover amazing ways to be selffunded without the exorbitant charges and with the full benefits of a tax-free environment. Specific offshore entities can fund your enterprise at a much cheaper rate than what you get onshore; Funds will be passed from an offshore finance company to your offshore entity and subsequently lent to your onshore resident company; and To benefit from offshore funding, you have to setup an offshore company (entity). Get Funded Without Restrictions With offshore funding, your company will get self-funded without many restrictions. Claim Tax Deductions With onshore funding, you cannot claim tax deductions for interest payments. On the other hand, with offshore funding, tax deduction can be claimed in some cases, on the initial payment of funds overseas. You can also claim tax deductions on the interest payments paid to the offshore finance company. How to Succeed With Offshore Funding For the success of offshore funding, you need to have clear commercial objectives. You should solicit professional assistance and plan and document carefully. Also, you should establish the offshore entity that will receive the funds from the offshore financial institution with the current operational and commercial objectives of your inshore company. Embrace Offshore Mutual Funds If you are a savvy investor, you will definitely embrace offshore mutual funds. This is because of their consistent performance relative to the performance of onshore funds. Over the last few years, they have outperformed inshore mutual funds. Presently, offshore mutual funds are part of the product range of the major investment houses in the world. If you think offshore funds are high return and high risk, think twice. That is the traditional school of thought. Recent performances of offshore mutual funds have caused a rethink.
Off Shore Company as a Vehicle to Invest In Offshore Funds Offshore fund managers restrict investment in offshore funds to qualified, sophisticated investors. These are people with an annual taxable income exceeding $200,000 and a net asset pool of $2 million or more. If you do not fit into this class and want to invest in offshore funds because of their impressive performance, your best bet is to establish an offshore company as a vehicle of investing in offshore funds. The offshore company you will establish will raise investment capital by borrowing money from you, the owner or issuance of paid up shares to you. The funds raised will be the investment capital of the company. It will be used to purchase shares in offshore funds.
CHAPTER 7: YOUR INTERNET BUSINESS IS BETTER OFFSHORE The Smartest Way to Do Business Online If you are an online business owner or are planning to venture into online entrepreneurship, you should know that an online business has no limits about where and how it can do business. So, why should your web based enterprise, be based on the old, geographically limited model? It is a smart idea to structure your online based business, overseas. This will provide a legal way to reduce liabilities and defer tax payments. Be smart about doing business online by implementing the lessons discussed in this chapter. The savviest way to carry out a business is to make sure that all income streams of your business are not in one country. By diversifying your income streams, when inflation runs rampant in your country, you will be safe. There is a real risk of hyperinflation in the US because the Federal Reserve is printing money 24/7 uninterruptedly. Therefore, if you have an online business, it will be invaluable even if a small portion of your income is in a different country. Combining an offshore bank account with an internet business based abroad is the smartest way to do business online. This is the best advice I would give you in this chapter. As An Internet Entrepreneur, Do I Have To Incorporate Offshore? Offshore incorporation will offer you significant benefits than onshore incorporation in a high tax location. If your business is location independent, your best bet is incorporating offshore. This is because; you can pick the best strategic jurisdiction from where to operate your business. Some reasons for incorporating offshore include: Tax benefits; You will receive additional layers of privacy; Ease of worldwide wire transfers; Different accounting practices; Your assets are better protected; and Corporate banking. As An Internet Entrepreneur, Where Should You Incorporate If you are an online entrepreneur, you might be asking yourself, “Which is the best place to incorporate my online business?” My best business quote is, “location independent” is not location arbitrary. Always remember that the location of your business matters. In some quarters they say that the 3 most important business advices are, “location, location and location.” Therefore, you need to find the best location for your internet business. Not every country is ideal. You have to factor in your personal circumstances when searching for an incorporation jurisdiction.
What Makes For a Good Offshore Destination For An Internet Company? You want to find a place that has most of the following: Ability to bank worldwide; No capitalization requirements; No audits; English speaking country; Common law; No secretary required; Strong asset protection with no lawsuits; Quick, 48 hour filing; No publicly accessible accounts; No tax at corporate level on global income; Only 1 member required; Simple filing; Privacy; No local directors required; Good jurisdictional reputation; and Company meeting can be held anywhere Avoid These Places Avoid places with high taxes, red tape and lawsuits. This includes: UK; Canada; US; and Australia You want to incorporate somewhere that does not have a worldwide taxation system. Having your internet business in the United States is definitely not a good choice. This is because the IRS taxes profits on worldwide income. Avoid Indonesia This country has a large capitalization requirement. This means that you have to make a large deposit into a local bank account, before you start business. Many South-East Asian countries have mandatory 50% ownership. Avoid Madeira Madeira is located off the coast of Portugal. It has: Low taxes; and No local shareholders required Therefore, why am I saying that you avoid Madeira? The reason is simple. It is complicated to incorporate in Madeira. There are registered quotas, capitalization requirements and you have to have 2 members on the account. The government of Madeira tries to sneak in fees, such as annual operating fee and installation fee. Also, company meetings must be in Madeira, accounts have to be maintained in Portuguese and the taxes are niggling.
Where Should You Set Up Your Internet Company?
1. Nevis When running a business, you are exposed to the risks of liabilities. Therefore, you should take your enterprise to a place where the claimant has to post a bond to bring a lawsuit against you. Two places with this provision are Nevis and Cook Islands. Your Nevis incorporation will have a good amount of privacy. This is because Nevis does not have a country wide register. 2. Belize If you are an internet entrepreneur, looking for the best place to incorporate offshore, you need to think about Belize. - Winning combination- a Belize bank account paired with a Belize corporation will create a winning combination; - This is the only country in South America that has English as the native language; and - There are no taxes in Belize and the setup costs are low. The Best Place in the World to Set Up an Online Business: British Virgin Islands (BVI) If you are an online entrepreneur earning global income and you want to pack this income offshore, choose British Virgin Islands.
The BVI is the worldwide leader for online entrepreneurs who want to incorporate offshore. Leads in scalability; Leads in privacy; Leads in reputation; and Leads in flexibility. Why Banks Are Willing To Work with British Virgin Islands The most reputable offshore company formation setups are those of BVI. This is the reason why banks from all over the world are willing to deal with BVI.
CHAPTER 8: ASSET PROTECTION You can have a tax optimization strategy that will reduce your tax liability. You can escape the incessant claims of creditors. You can come out of a divorce process, with your assets unscathed.
You TRULY Need International Asset Protection 1. Keep Your Disgruntled Family Members Away From Your Assets Yeah, disgruntled family members! They are everywhere. They will want to reap where they have not sown. 2. You Need To Keep Those Pesky Creditors Away From Your Assets Do you know that the US is the creditor’s paradise? 3. Do Not Get Ripped Off By Those Hefty Divorce Settlements You really do not want to pay those hefty divorce settlements US Is a Creditor’s Paradise Are you living under the shadow of debt? Not knowing when the next court order will be issued for the repossession of your assets. Creditors can give you pain, suffering and misery. Creditors do not have to give you pain and endless mental suffering. You can get your assets protected from creditors and liabilities. In the US, creditors will pursue your assets up to the last cent. This is something you will not experience in other countries. In other jurisdictions, your assets are shielded from creditors & liabilities. You Can Be Smart With Creditors
Yes, you can outsmart creditors and the divorce courts with offshore asset protection trust. With a strong international asset protection vehicle, you legally transfer your assets out of the reach of future creditors. Your assets will be placed behind a protective barrier that is unreachable. If you take the initiative and make use of asset protection trust explained in this chapter, you won’t have to worry about divorce lawyers and creditors ever again.
Protecting Your Assets with an International Trust Is Simple
Asset protection trust is based on a simple concept. You simply convey your assets out of your name and into an international trust. You designate settlors, trustee and beneficiaries. This level of international asset protection is only supported in these countries: Belize; Cook Islands; Nevis; and
Isle of Man. These jurisdictions have international trust laws that will provide you with maximum asset protection and shield your assets from economic and political volatility. The Best Asset Protection Trust Is In the Cook Islands Cook Islands is located south of Hawaii. The Cook Islands Trust offers the strongest asset protection in the world. Cook Islands has the most tested case law history; Privacy is maximized and costs are lowered; and Cook Islands is a leader in the creation and management of asset protection trusts. Maximum Asset Protection You have definitely worked very hard to accumulate your wealth. It is definitely no mean accomplishment to be rich. Therefore, do you want to lose it all to creditors or to a disgruntled spouse? For maximum asset protection, you need to diversify. With an Offshore Limited Liability Company, you can open bank accounts in different countries. This will facilitate investment and currency diversification. A well designed and diversified offshore company structure will make it possible to achieve maximum asset protection, privacy and personal freedom. There is need for diversification of jurisdiction, portfolio and offshore structure portability. Consider: Offshore structure portability; Diversification of jurisdiction; Portfolio Diversification; and Diversification of entity, operations and banking
CHAPTER 9: HOW TO INCORPORATE AN OFFSHORE ENTITY Questions to Ask Yourself before Incorporating Before you incorporate offshore, ask yourself these questions: What type of company do I need? Which is the best offshore jurisdiction? Do I need any extra services like nominees and offshore bank account? How many people will be involved in my company? Offshore Company Formation Made Easy: Setting Up In Hong Kong Cheaply & Easily Forming an offshore company has never been easier. You can have your company in as little as a couple of days Setting up in Panama, Cayman Islands and other offshore jurisdictions is daunting. However, setting up in Hong Kong, is cheaper and easier. You can get your company setup in weeks. If you decide to incorporate in Hong-Kong, the incorporation process will be much easier. Incorporation in Hong Kong is easier than incorporating in other jurisdictions because of business- friendly regulation and lax legislation. So, How Do You Incorporate Offshore
Step 1: Decide On Company Type First, you will need to decide on the offshore vehicle to use. You will choose between International Business Company (IBC), Limited Liability Company and Private Limited Company.
Step 2: Decide On the Country Find an offshore jurisdiction that stands out in terms of number of offshore companies incorporated. For a long time, Bermuda and Cayman Islands had the largest numbers of new offshore incorporations. They have been overtaken by other countries because of their heavy incorporation costs. Below is a list of the most popular offshore jurisdictions and the common company legal entity in the jurisdiction: Hong Kong- Private Limited • Saint Kitts and Nevis- LLC Panama- Private Limited •Bahamas- IBC Malta- Private Limited •British Virgin Islands- IBC Step 3: Decide On the Members The minimum number of members for your company can be 1. In such a scenario, it will be an offshore sole proprietorship and will be incorporated as a private limited or IBC. You can also choose your company to be a multi-member LLC. Step 4: Decide On Additional Services You can decide to have nominees. These are companies or individuals that will assume shareholder/director roles in a company, keeping your name away from company and public records. This will be useful when incorporating in jurisdictions that publish names of directors and shareholders, on public records. 7 Reasons Why Your Ecommerce Business Should Be Based In Hong Kong Are you engaged in ecommerce trade between China (supplier) and US, or any other country? If that is the case, you need to incorporate in Hong Kong.
Hong Kong is a great place to bank and do business if you manufacture or purchase your supplies from China. You will be 2 hours away from China- the
largest manufacturing base in the world. Also, you will be a short plane ride away from most South East Asian countries. As an internet business owner, it is feasible to setup in Hong Kong because: 1. Hong Is A Globally Recognized Leader In Business and Banking; Hong Kong’s economy is built on the idea of easy, secure and safe banking; If you are an American working with Hong Kong, you will not be put on any IRS blacklist; and You can work with multiple currencies with a Hong Kong bank. 2. You Can Write Off Many Personal Expenses As Business Expenses; 3. It Is Cheap & Easy To Set Up In Hong Kong; 4. Losses Can Be Carried Forward Indefinitely; 5. In Hong Kong, a company’s profits from ecommerce are not taxed if the business operations of the ecommerce enterprise are located outside HK. 6. Companies incorporated in HK that retain earnings rather than distributing them are not subject to VAT, sales taxes, annual net worth taxes and withholding taxes. 7. Establishing an office in Hong Kong does not make a company liable to profits tax if the office is not generating profits from within Hong Kong. Ecommerce in Hong Kong International companies importing from China have historically chosen to incorporate in Hong Kong for the following reasons: Low taxation Access to services
With the advent of ecommerce, the business activities that can take place in Hong Kong have dramatically increased and they include: Marketing; Selling; Payroll;
Administration; and Procurement. The greatest tax benefits of incorporating in Hong Kong are available to ecommerce companies that can deliver their products electronically including: Internet Service Providers (ISPs); Legal services; Technical support; Research; Software; Data warehouse centers; Certification and verification services; Supply chain management centers; Database management services; and Corporate services What Are the Costs of Setting up In Hong Kong? You can get your ecommerce company incorporated in Hong Kong for about $600. You will need a phone number and an address. This will cost you around $30 a month. Your Biggest Expense Will Be: If you are not in Hong Kong, you will have to fly to Hong Kong to open a HK bank account. This account can only be opened in person therefore you might have to incur flight expense. Once you are in Hong Kong, it will take you 20 minutes to open a bank account. You can stay in Hong Kong, for a night, for as little as $50. Travelling to Hong Kong, paying for a room and costs associated with opening you HK bank account, will not cost you more than $2,000. The company pictured below, quotes a price of 8,000 HKD ($1,030) for forming HK private company including help in opening HK bank account, getting your company kit and certificates, taking care of government regulations, one year office services and one year secretarial services. The company quoting this price is Asia Business Services.
Set Up a Hong Kong Private Limited Liability Company Minimum Requirements: One director; The director does not have to be a Hong Kong resident. This director can be an individual or corporation. One shareholder; This shareholder does not need to be a Hong Kong resident. The shareholder can be a corporation or an individual. If you wish to remain anonymous, use nominee shareholders and directors. An auditor; The auditors must be a company of HK accountants. A company secretary; A company secretary can be another HK limited company or a HK resident. A business registration certificate; and Your company must register with the Business Registration Office in Hong Kong. Registration fee must be paid on the anniversary of your company’s incorporation. A registered office address in Hong Kong. You can use a virtual office or a firm that provides virtual office service.
Hong Kong Offshore Company & Tax Obligations Hong Kong corporate tax rate is 0% for all transactions that have been completed outside Hong Kong. That is sweet. However, for Americans, keep in mind that all US companies and individuals must pay taxes on their global income. Hong- Kong Banks Are the Best
If you have incorporated in Hong Kong, you will need to open a HK bank account. Some HK banks rank among the 50 safest banks in the world. One of these is Hong Kong and Shanghai Banking Corporation (HSBC). HK banks have low wire transfer fees that encourage multiple transactions; Hedge against Currency Risk with a multi-currency Hong Kong bank account; and Most HK banks allow accounts to be multicurrency accounts. Options for Setting up Your Ecommerce Company in Hong Kong
Take advantage of the opportunities that ecommerce offers by incorporating a structure that will facilitate maximum tax optimization. You can transfer part or all of your ecommerce enterprise to a low-tax jurisdiction like Hong Kong by following any of the following routes: 1. You can move part or all of your ecommerce business offshore to substantially improve its tax performance. 2. Escape CFC rules by creating a joint venture with other onshore companies. This will sufficiently distribute ownership facilitating escape from CFC rules. 3. Set up your ecommerce enterprise in Hong Kong with its ownership falling outside the CFC rules. This means you should not hold more than 40% stake from a country with high taxation. Remainder of shares should be put in a trust for beneficiaries.
Conclusion Between $20 trillion to $30 trillion is being held in offshore havens by wealthy individuals. Billionaires, corporate executives, small and mid-size entrepreneurs, presidents, politicians, dentists, doctors and middle-class individuals, among others, are some of the people who have stored part of their wealth offshore. Mitt Romney, who was once a US Republican presidential candidate, has an offshore structure in the Cayman Islands. Some offshore incorporation packages are simple and cheap. Such packages simply provide company incorporation in an offshore location like British Virgin Islands (BVI). Other incorporation packages involve the formation of sophisticated structures that weave together multiple layers of “nominee� shareholders and directors, trusts, insurance products, foundations and companies. This book provides a summary of justifications as to why you need to create offshore entities and follow the wealthy individuals who have done so and have saved millions of dollars in taxes by being smart and creative in their endeavor to be successful entrepreneurs. Good luck
Finally, please tell us what you think about this book by leaving a review here.
Bibliography Double Irish Arrangement. (n.d.). Retrieved March 1, 2016, from https://en.wikipedia.org/wiki/Double_Irish_arrangement Double Irish with a Dutch Sandwich. (n.d.). Retrieved March 1, 2016, from http://www.investopedia.com/terms/d/double-irish-with-a-dutch-sandwich.asp Drucker, J. (2010, October 21). Google 2.4% Rate Shows How $60 Billion Is Lost to Tax Loopholes. Retrieved March 1, 2016, from http://www.bloomberg.com/news/articles/2010-10-21/google-2-4-rate-shows-how-60billion-u-s-revenue-lost-to-tax-loopholes Dzieza, J. (2012, February 25). 8 Ridiculous Tax Loopholes: How Companies Are Avoiding the Tax Man. Retrieved March 1, 2016, from http://www.thedailybeast.com/articles/2012/02/25/8-ridiculous-tax-loopholes-howcompanies-are-avoiding-the-tax-man.html Hiltzik, M. (2014, July 8). Corporate Tax Scam Watch: The 'Inversion' Craze. Retrieved March 1, 2016, from http://www.latimes.com/business/hiltzik/la-fi-mh-corporate-taxscam-20140708-column.html Leigh, D., Frayman, H., & Ball, J. (2012, November 25). Offshore Secrets: British Virgin Islands, Land Of Sand, Sea and Secrecy. Retrieved March 1, 2016, from http://www.theguardian.com/uk/2012/nov/25/offshore-secrets-british-virgin-islands Offshore Business Planning. (n.d.). Retrieved March 1, 2016, from http://premieroffshore.com/offshore-business-planning/ Offshore Company, Offshore Corporation and Offshore LLC Formations. (n.d.). Retrieved from http://premieroffshore.com/offshore-company-and-offshorecompanies/ Tax Efficient EU Trading for Offshore Companies. (n.d.). Retrieved March 1, 2016, from http://www.offshoreformations247.com/advice/tax/tax-efficient-EU-trading.html The Best Country For An Internet Entrepreneur To Incorporate. (n.d.). Retrieved March 1, 2016, from http://flagtheory.com/the-best-place-for-an-internet-entrepreneur-toincorporate/