Trading via own remote company in a no-tax-country

[JackRab]

This happens mostly in countries in the Carribean like BVI etc.... Also Cyprus and Gibraltar I think. They are very well setup to this kind of stuff.

I think you will need someone officially on the payroll at the company who actually resides there though. Usually an accountant or lawyer as boardmember or director or something?

Like Sakisf said... But I doubt you will not be taxed at all... I think you'll be paying some tax when a dividend is paid or in windup depending on which country you reside yourself.

That's why companies like Apple are having a problem getting overseas earned money back to the USA. They'll have to pay a high tax on it, even if it's double taxed.

 

[conduit]

Let's not bring the US into this discussion as OP clearly indicated he is not American citizen/resident and does not look to do business in the US. American tax laws are very complex and far reaching because of global taxation of American residents/citizens. An entirely different animal imho...

This happens mostly in countries in the Carribean like BVI etc.... Also Cyprus and Gibraltar I think. They are very well setup to this kind of stuff.

I think you will need someone officially on the payroll at the company who actually resides there though. Usually an accountant or lawyer as boardmember or director or something?

Like Sakisf said... But I doubt you will not be taxed at all... I think you'll be paying some tax when a dividend is paid or in windup depending on which country you reside yourself.

That's why companies like Apple are having a problem getting overseas earned money back to the USA. They'll have to pay a high tax on it, even if it's double taxed.

 

[Butterball]

No won't work. Your offshore structure would not be accepted by your local tax authority and you'd be liable for full local taxes. Google the "mind and management" test.

 

[conduit]

Not true. It depends on the exact jurisdiction one is in. I can tell you for sure that some who live outside of Hong Kong but submit algorithmic orders from a server in Hong Kong and maintain a corporate structure in Hong Kong are NOT subject to capital gains, withholding or other business related taxes. The real issue here is how to repatriate gains in the future via a share in the equity of the company that grows through the profits the corporate entity generates.

No won't work. Your offshore structure would not be accepted by your local tax authority and you'd be liable for full local taxes. Google the "mind and management" test.

 

[Butterball]

Not true. It depends on the exact jurisdiction one is in. I can tell you for sure that some who live outside of Hong Kong but submit algorithmic orders from a server in Hong Kong and maintain a corporate structure in Hong Kong are NOT subject to capital gains, withholding or other business related taxes.

You don't know what you're talking about. This isn't about the physical location of servers or the repatriation of gains. I can only recommend to everyone to talk to your tax specialist and not be cheap about it. I see so much BS info on the forum regarding offshore taxation it's scary.

 

[conduit]

of course it is all about the point of where the work is performed. Which part is hard to comprehend here? It is crystal clear. high frequency trading firms are taxed where the algorithm generates the order, for example. This may not make much difference for an American firm (though it probably still does) but for sure it makes a heck of a difference for any Japanese hft shop. Even same for hedge funds. Why do you think almost all JGB contracts which traded at the TSE (now I think OSE) are traded out of Hong Kong or Singapore? Whole trading teams trading Japanese equity sit outside of Japan doing so for the sole purpose to place the location of where the "job is done" outside the higher tax jurisdiction.

You don't know what you're talking about. This isn't about the physical location of servers or the repatriation of gains. I can only recommend to everyone to talk to your tax specialist and not be cheap about it. I see so much BS info on the forum regarding offshore taxation it's scary.

 

[marsman]

So, the smartest way to go about it would be to not pay yourself income and rather accumulate equity in the company in which you hold ownership and upon liquidation you can then move your proceeds back to Europe without being subject to taxation.

I think this is the best idea.
What about this extension of that idea: if one needs some money then one flies to the foreign country and takes the money needed from the account, and then flies back.
Isn't that then similar to a partial liquidation?

 

[conduit]

sure but if you are not absolutely certain that you do not violate local tax laws then you make yourself potentially liable to a criminal investigation. You gotta stop being cheap and consult that tax lawyer in your country of residence. You got enough pointers and options now to consider. Its time to invest some of your money in professional advice.

I think this is the best idea.
What about this extension of that idea: if one needs some money then one flies to the foreign country and takes the money needed from the account, and then flies back.
Isn't that then similar to a partial liquidation?

 

[marsman]

sure but if you are not absolutely certain that you do not violate local tax laws then you make yourself potentially liable to a criminal investigation. You gotta stop being cheap and consult that tax lawyer in your country of residence. You got enough pointers and options now to consider. Its time to invest some of your money in professional advice.

My friend has some lawyer friends, he is going to meet them early next week.
Thx to you and the others for the valuable tips on this matter.

 

[JackRab]

Let's not bring the US into this discussion as OP clearly indicated he is not American citizen/resident and does not look to do business in the US. American tax laws are very complex and far reaching because of global taxation of American residents/citizens. An entirely different animal imho...

I was using it as an example for how gains are taxed differently across countries.

Another example is that as an Australian resident you are taxed on any capital gains, whether generated overseas or not..
each country has a different tax-system, which also takes into account double taxation... both only if a bilateral tax-treaty exist.

So, check with overseas tax-lawyer as well as domestic.....