Seychelles offshore companies are now required to keep full accounting records and supporting documents sufficient to reflect the real business situation of the company.
Reasonable tax rates and safety of assets are two global concerns of anyone on his feet, be it a person or a business of any caliber. Herewith, the more confidentiality is the better, and the best variant is where you can find it all in one place. Guatemala is a jurisdiction attractive from many perspectives.
International tax planning, whether for business or personal purposes, often requires involvement of low-tax jurisdictions. Provided you fulfill your obligations under tax laws of both countries, dealing with tax havens is absolutely within the law. When it’s not within the law, it becomes a “tax haven abuse” and leads to non-pleasant consequences. Herewith, it is worth to know what offshore transactions constitute concern of your home tax authorities.
Recently, due to pressure from the G20 to render active campaign against tax evasion, a lot of low-tax countries and territories, also called tax havens and secrecy jurisdictions, are taking practical steps towards the OECD’s standards of transparency. The disclosure of customer information may impair relations with the customer, but fear to impair relations with the leading world powers appears to be stronger. Existing bilateral tax treaties are being revised and new tax information exchange agreements are being signed and negotiated. How badly it affects the practical confidentiality of tax havens?
The higher is your tax burden, the more you are tempted to go for a sophisticated tax planning techniques involving offshore entities. However, your home tax authorities keep their nose to the wind. Among others, Germany is known for its elaborated anti-avoidance legislation, developed to prevent its taxpayers from using offshore transactions aiming to reduce their German tax liability.
Back to the issue of offshore companies and trusts for UK residents, additionally to the previously discussed CFC regulations covering mainly UK legal entities, there also exist certain anti-avoidance provisions targeting UK resident individuals. Those are mainly contained in S739-742 of ICTA 1988. Those provisions mean to prevent UK residents from using foreign companies and trusts, which would allow them to avoid paying UK taxes.
Looking for new opportunities in terms of international business tax planning, we examined the Israeli foreign trust regulations and found this vehicle indeed worth of attention. Israel is a low-profile jurisdiction with a wide network of double-tax treaties, attractive tax treatment of certain offshore income and no tax haven connotations.
If you are an American taxpayer, and you look for or already have an offshore bank account or a company or other legal entity existing under the laws beyond the United States, you might be unaware of reporting and tax obligations imposed on you by the IRS. It’s better to be safe than sorry. Here we are giving certain facts and figures for your information.
If you are new to the offshore world with its advantages and opportunities, you probably experience difficulties with where to start and what exactly to do in the first turn and next. Setting up of an offshore structure is a “do-it-yourself” thing for many small businesses. Even larger companies, in terms of the crisis, look beyond cushy relationships and actually start questioning how much they spend on outsourced advisors.
Although today there is a good choice of low-tax jurisdictions, none of them may appear to be good for you because of the “tax haven” image. New Zealand is definitely off any lists of tax havens, but its tax law and international reputation provide for enormous opportunities for your your business, including but not limiting to trading operations, investments, banking and asset protection.
Cyprus has been an attractive place for making international business for many years, for trading purposes in the first place. Even after introduction of 10% corporate tax for both resident and non-resident companies, Cyprus is still one of the countries with the lowest taxation level in EU. In recent years, Cyprus developed its tax legislation and emerged in a decent location for multinational investors considering setting up a holding company for their participations.
In continuation of recently discussed Tax Residence and Exchange of Information topics, we would like to pay your attention to upsides of double tax treaties, say, bringing your business better international image, tax transparency, stability and unequivocal legality. Let’s look at this closer.
Countries with high taxes keep pushing tax havens towards a level playing field. Cooperation, compliance and transparency in taxation matters are the flags of international organizations fighting for tax justice. Tax havens’ commitment to the principles of transparency and effective exchange of information improves their international image in the eyes of the first world countries, but obviously leads to a lack of privacy and confidentiality for persons using services of such jurisdictions.
As you approach using an offshore company in your business, you may realize that a better option as to your particular case is not available to you because of substantial set-up and maintenance costs. A solution might be to incorporate your first company in a cheaper jurisdiction with fewer benefits and later switch to a better option when it becomes worth of it economically. How can you legally change your offshore company’s domicile to another jurisdiction?
It’s the end of the year already, we all think about the Season’s Holidays. But after we are back to work, we still observe that times of financial difficulties are not over yet. Businesses go bankrupt, people loose jobs, the crisis keeps developing. Experts say it might be the worst world crisis ever seen, they do not expect upturn in at least two years. Meanwhile prudent people would do all possible to safe what they earned so far, rather than strive for economic achievements.
Many providers of offshore corporate services still promote offshore companies incorporated in tax haven jurisdictions as a panacea from taxation. They claim that the company is exempt from taxes in the country of incorporation. True. But it’s not carrying on any business in that country. Where does your offshore company carry on its business and pay taxes then?
If intangible assets are a significant part of your business, it is important to manage them in a way that meets the business and legal objectives. Moving the intellectual property offshore may contribute not only to its protection and flexibility of exploitation, but also reduce the tax burden on the related income.
When you first approach incorporation of an offshore company in your business you start with tax planning and legal matters to insure you are not breaking any laws and so on. But even when you are done with that part, you are still not safe, as now you have to choose the proper provider or registered agent to serve your offshore structure during its lifetime.
Most highly developed countries with free economy do not mind their residents working and earning abroad. A genuine trader is free to operate where he wishes. Naturally he is expected to bring his foreign profits home and pay taxes to the domestic state treasury. When he does work abroad but doesn’t bring money back there appear doubts whether he is a genuine trader or his only intention is to avoid domestic taxation. The purpose of controlled foreign corporation regulations in any country is to prevent residents from reducing their home tax liabilities by means of diverting profits to low-tax jurisdictions.
A lot of people are looking to benefit from using offshore companies. Those benefits come from difference of taxation and administration regimes in jurisdictions involved in international business operation. The governments, however, are very aware of possibility for residents and non-residents to use loopholes and avoid certain domestic taxes that would be otherwise payable.
Labuan is becoming one the leading offshore centers of Asia. Today it is a base for more than 60 banks, numerous IBC’s and captive insurance companies, the Labuan International Financial Exchange (LFX), an international Islamic money market.
United Kingdom is increasingly gaining in popularity as an attractive location for multinational business for many reasons including tax and non-tax ones. A wide range of international treaties, flexible domestic legislation, as well as tax exemption of certain dividends in force from 1 July 2009, let the United Kingdom successfully compete with other well-known holding company jurisdictions.
Danish friendly international tax rules make Denmark a unique place for setting up a holding company in Europe, especially for a non-European investor. Its legislation encompasses all key factors distinguishing a tax regime favorable to holding companies and currently provides for the following incentives.
Tax haven jurisdictions have always been popular mainly because of giving ways to save on taxes. There are still many businesses when using of offshore companies is very beneficial. Apparently existing anti-avoidance rules make them merely “tax-neutral”. First world countries with high level of taxation are very unhappy with existence of tax havens and take all measures to eliminate benefits of using offshore companies by their citizens.
International tax planning means development of the most fair tax regime for the taxpayer. Globalization brought new opportunities for both resident and non-resident individuals and legal entities. Based on our practical experience the following are useful tips for those who want to save on taxes.
Don’t take it easy. Tax fraud is a criminal offense, a felony that in most countries is punished by serious fines and imprisonment. Tax fraud is having place any time when you deliberately pay less taxes than you are subject to or wrongly claim a tax repayment by acting dishonestly.
There are over 70 jurisdictions and territories in the world providing for tax-free regime to offshore and/or non-resident companies. All of them have a comprehensive range of services and benefits for international business. It may appear difficult indeed to choose the best one for you.
More and more private investors access international financial markets online. All of them have to deal with foreign tax issues. The result of that are numerous questions. Following our recent article “Why a Private Investor May Need an Offshore Company” we answer questions on taxation and reporting of U.S. traders using offshore companies.
Internet speckles with titles like “Financial globalisation ends offshore financial centres” and “No onshore or offshore, just good and bad”. What’s in this for our clients? This post is following some recent publications in anyway referring to further existence of the “offshore jurisdictions”.
No matter what is that you are going to do offshore, out of your home country territory, set-up a business or open a private bank account, you might have to present some public documents in another countries. Documents, both personal and corporate, produced in your home country, signed by a Notary, lawyer or other public official, are considered to be valid anywhere in its territory. But when you take them abroad who knows and who can prove they are correct and valid?
Sooner or later, after you start receiving any significant incomes from your investment activities, you get into planning of your taxation matters. Although a private investor in most countries is normally taxed at a lower rate than a legal entity for the same type of income, an offshore company is often taxed even less or not taxed at all.
Or do I need it at all? Even with no details of your particular case we say “yes”, you would probably benefit lots from using options of the offshore industry.
Why, you think, are the high tax countries struggling with offshore jurisdictions?
Most people when they hear the word “offshore” they associate it with something illegal: money laundering, financing of terrorism, tax-avoidance.
Nobody would like to risk his money and freedom. That’s why many people start thinking about going offshore with that particular question.
A general answer would be “yes, to go offshore is legal”. However the definition of “going offshore” is not that straightforward.