Offshore account for tax-free compounding?

[buzzy2]

Quote from moarla:
when you can show that you have an office there with employies working for you , and the decision making is there, it will be ok. but if you trade from Florida, no no my friend

This is a factor, but not it's not THE deciding factor.
Many multinationals have letterbox companies (even headquarters) with no physical offices or employees in Europe and the Caribbean and the IRS doesn't seem to mind.
On the other hand, the IRS might argue that your offshore physical office and employees have no economic purpose other than avoid tax and dismiss them as a sham and they might even accuse you of money laundering to shut you up, settle quietly and do whathever they want.

 

[Bob111]

Quote from TradeMetal:

What about Bahamas ?

the corporation or whatever should be least of your problem. any local lawyer can open one for you.they question is how it will be structured and who will be the REAL owner.i would suggest you to go trough some expats forums and read about current laws and agreements between US and those offshore heavens. then you probably will be less enthusiastic about your idea...
anyyway...corp is not a big deal and easy to open one..now-go head and try to open an a bank account in any of those offshore countries.
btw-minimum balance on bahamas account is typically 250+K. not FDIC insured,private bank
i'm not saying this is impossible,but imo-it would be really hard on individual retail trader level. to both establish such thing and comply with current US laws. and again-the bank account you should worry about,not LLC

 

[Daal]

Here's why this is complicated
http://en.wikipedia.org/wiki/Controlled_Foreign_Corporation

 

[Bob111]

Quote from Daal:

Here's why this is complicated
http://en.wikipedia.org/wiki/Controlled_Foreign_Corporation

yes,but you can go around it with multiple members\owners\nominees.
this is the one huge red flag for IRS-
http://www.irs.gov/businesses/small/article/0,,id=148849,00.html

and another will rise,when you try to transfer the money offshore. OP should look for current laws and regulations about that.

but the bottom line is very simple-if you own corporation(or piece of it,regardless to where it's located)-then,according to current US laws-you must pay taxes on profits this corporation made. even if you never touch\distribute\receive those profits.

 

[buzzy2]

Big companies are able to exploit CFC rules loopholes to establish offshore entities where they accumulate profits tax free.
One of such entities is Google's unlimited liability company in Bermuda, owned by two Google subsidiaries, so technically a subsidiary of offshore subsidiaries and not covered by CFC rules.

All of Google's worldwide non-US profits flow through a Double Irish and a Dutch Sandwich to end up in Bermuda where they pay no tax as long as the profits are not repatriated to the US.

I'd like to know if every Joe Sixpack is allowed to pull this one, I guess not, since they don't break CFC rules in the letter but they do in the spirit.