Ah that makes more sense

330days rule very brutal,its half a year + a day in most countries

Offshore structuring when done right is not about not paying tax.

It’s about DEFERING & MINIMISING the tax, legally. And where you know you are going to pay tax, its about turning whatever source of income you have into the lowest tax form of income.

If you can defer tax today for 10 years not only can you earn interest on the money you would have paid during those 10 years, but perhaps the tax rate you have to pay will have dropped by then (tax rates are generally trending down in most countries).

More importantly when done right it’s also about asset protection. (And yes i read that panama story, the person involved is an idiot, you never put all your assets in one country, ever. And you generally don’t live in the country you use to hold your assets).

Every country in the world pretty much taxes its Residents (normally 183 days a year in country or a test based on things like owning property).

Many countries also have controlled foreign corporation legislation so if you own or manage (can be very loosely defined) a foreign company (in any country) it might be considered local for tax purposes.

USA is particularly brutal in its tax laws. It’s one of only 4 countries in the world that tax its citizens on their world wide income (less the $80000 a year allowance mentioned above) even if you are nonresident. USA also has pretty much the strictest non residence test, and some very tough CFC laws. You could certainly find yourself having profits of a foreign company you owned shares in added to your personal taxable income if you structured things wrongly - even if it is a legitimate business with staff and management in another country.

There is no benefit in setting up an offshore structure if you think you can dump money into a bank account in another country, get an ATM card, and withdraw money in your home country and not pay tax on it. You will get caught, and the governments are tracking more people doing this than ever before through tracking atm card usage.

However if you have income sources from a number of countries, staff, contractors or suppliers in a number of countries then its potentially beneficial to look at going "offshore" depending on your turnover and profitability, and how much of the profit you want to spend personally, or how much you want to leave for investments. You can buy investments through an offshore company with most of the major stockbrokers, investment funds etc.

If you do have a multi country operation and have companies in different jurisdictions then there is generally a lot of tax saving potential through careful choice of ownership countries and the use of double tax treaties.

Some of the most common "off shore" countries used are not what you would expect. UK, USA, Netherlands are all offshore countries in right circumstances (for example a USA LLC pays no USA tax if it is owned and managed outside the USA and has no USA source income).

Low tax countries like Cyprus are also very useful as they exempt many forms of income which can bring the tax down to close to 0%, while still having your company in an EU country.

Getting the right structure isn’t as expensive as a lot make out but it isn’t cheap either. If you run off and just buy a company in another country and open a bank account and think you’re done then you are almost certainly asking for trouble.

Most people rely on nominee services to ensure they aren’t breaking controlled foreign corporation laws. The few hundred dollar a year nominee services you see from most offshore company providers are for non trading companies - i.e. companies holding investments etc. They normally charge a lot more if it has any commercial activity and most won’t go near adult. If you don’t disclose what the company is doing they will find out and you may find yourself with a company or bank accounts they have arranged etc.

And if you run around operating the company through a power of attnorney as well you are going to break CFC regs too and shift the companies management to your place of business. Its fine for the occassional thing or to operate a bank account with (within reason) but you are better served paying your nominee to execute any major contracts on your behalf.

You need to allow for at least the same amount as the setup costs of the companies (and you will need more than 1 to do it right) in initial advice fees unless you know exactly what you are doing.

Yeah? :winkwink: Nope - it's about not paying any tax legally. It's also about not being burdened with tax forms of any kind.

Seriously, not a bad writeup and many good points. The aura I'm getting from your post is that of a onshore legal advisor playing games and covering his ass.

The subject of this thread relates to "going offshore". Going offshore has nothing to do with sitting on your ass in an onshore country and playing games with corporate structures offshore.

Going offshore means getting on an aircraft and moving to (usually) better climates and, ideally, not paying *any* taxes and not having to account to the govt of that jurisdiction for any financial activity in a corp business.

Structures can still be relevant even under these situations and where you may wish a presence elsewhere for whatever reason.

But... just trust me :) - it has very little to do with deferring or minimizing taxes - there are no taxes :thumbsup

unless you move also your not protected, if I was going to actually move it would be canada and I would become a citizen. Moving to a quazi third world countries things can turn very quickly.

Well unless I was going to 100% physically move offshore I'd not consider it. Reason is simple...friend of the family is in the US Treasury dept and, well, let me be blunt, unless you are hand carrying cash piles to different countries under the radar you are sending up huge fucking flags that can be seen....don't kid yourself in a post 9/11 world...money is heavily watched. If you do it right, great, if you do it shady --- grab those ankles.

No Gary... it would be normal if you are still actually resident in your "home country" to pay any tax element coming from any benefits in your offshore corp. In other words (and this can vary depending on the specifics of tax legislation of the country in which you reside) - any financial reward you get from your offshore (or any corp) would normally be taxable in your country of residence.

From a legal angle, it sure would not be complete tax free living and most probably, if that was attempted, would be a violation of tax laws - not worth the hassle/penalty.

In it's simplest form and towards "complete tax free living", this normally requires living in a no tax or low tax jurisdiction. Even then, there are taxes of some form or other - ie on importation of goods, sales tax in restaurants etc, but no personal or corporate taxation. We have been operating from bases in offshore jurisdictions for a good few years now and there is a benefit to not paying taxes, but other benefits in lifestyle - and these can be more relevant.

There is the option of setting up structures as Jayson mentioned - and these are probably more relevant to people who wish to remain "onshore" and, most are likely to minimize taxation to varying degrees, but there will remain laws in your country of residence where reporting and tax payment will be required.

Not sure where you are from man, but for US citizens - this is not an option to move OS and not pay any taxation. There are annual filings required and these include interests/income from OS corps. This demolishes the whole concept of OS in that the privacy element is removed when there is a requirement to state details on IRS forms etc.

Legitimate money movements are not a problem and all offshore banks will want declarations for any movement of around $10,000 or more. Can't see a need to carry cash and agree that would attract attention almost everywhere if it was high values.

50 miles offshore

Two lawyers, the 'Chad Knows Law' guy and Eric M. Bernstein, have both said that going offshore does not release webmasters from 2257.

:warning

Oh, and one more thing: it doesn't relieve you of US taxes either.

So, what's the point?

Thanks for the info GreyWolf, that's exactly what I thought too and since I made those posts I did a bit of research on the subject. It seems like a lot of people who open an offshore company with an offshore bank account and just withdraw cash from ATMs in the country where they live and generally do business are just asking for trouble.

I guess you can minimize taxes if the structure is right, but can't completely avoid the issue if you want to remain 100% legal. Damn, I knew it couldn't be that easy.

:) OK... Basically goes like this - if you are a UK citizen, you don't have the same restrictions as those of US citizens. This means... you can, if you wish, elect to live in another country (and you may have to pay taxes in that country, depending), but you are not required to file any tax returns to UK Inland Revenue (excepting any "benefits" you may still be getting from within the UK eg assets such as home rental etc while you are living elsewhere).

You are free to open as many OS bank accounts as you wish - however, the moment you "benefit" from these accounts and bring funds into the UK - tax becomes payable on these funds.

Another scenario is - you can move out of the UK and live in a no tax jurisdiction and there is no requirement to file any returns with UK IR or the no tax jurisdiction where you elected to live.

There is the other scenario of offshore structures and where you remain resident in the UK. This can minimize taxation, but does require legal advice. In practice, this advice is rarely good (prob because it comes from onshore lawyers/accountants talking about elements they have no clue about - else they would also be offshore *s*), but they can be good about advice in eg the UK.

Opening OS bank accounts and using plastic cards at ATM's is not legitimate and is detectable - that day ended years ago and it's only a matter of time before it is uncovered.

You are correct, Israel is the other country.

Yes... the plastic card syndrome is not a good idea these days :) It may have worked 10-20 years ago, but still a risk of damage if it was uncovered. It's far better to remain "legal" and not get hassled and penalized.

Seriously.. the simplest scenario, tho that depends often on personal and family circumstances - is to simply move offshore. You still remain a citizen of your own country and happen to live elsewhere, but can still return to your "home country" and visit family and friends etc - tho there is the tendency they may want to visit you instead :winkwink:

As an American, if I open a company in another country.. that company is taxed based on that countries tax laws. If I pay myself, then that money is part of my personal world wide income and is taxed.

I lived in Canada, I paid Canadian taxes and not American because Canadian tax is higher. If I lived in a country that had lower tax, I would have to pay the difference to the American Gov on the money I personally earned.

To bring money in, is were alarms are set off. The visa cards often aren't in your personal name, which is why it works as long as you don't go stupid.

2257, is a hitch.. If you own, even lets say .1% of a company that is adult but you are American, are you responsible? When do you become responsible? If you get a paycheck or a dividend?

And to end it all.. Isn't the proper way to do this to open a foundation, transfer the money to gold, move it to the foundation, convert it back and pay your self tax free?... Some shit like that.

Can you tell "Chad Knows Law" and his friend Eric that international webmasters have no obligation whatsoever to pay the slightest attention to US domestic law unless they host, live or operate any business within US territory.

Yea? :winkwink: I could never have guessed. How many times has this been already stated on this thread???

Fairly detailed and complex scenario man.... I'm not familiar with the exact IRS rulings on US citizens - it's a complex area and would need serious professional advice.

Maybe :) Depends if there is a dual taxation treaty in place. It would not be normal to have any such treaty where there was little or no taxation. There are allowances from the IRS for foreign residency - something like $80K/year, but annual filings of all foreign corps are needed.

To be totally legitimate - there is nothing wrong for any US person to live in a no tax area. By doing do, they will get the $80K allowance and just have to report any income and pay whatever tax is due on that. They would not be paying any local taxes in the no tax area.

It may not be a coincidence - and, seriously may be true, but noticed most US folks always seem to earn around $75K year when living abroad :)

Dangerous area and one which is being monitored regularly. Any cards used in US territory are easily tracked. They would be blocked at the OS bank level and no account information would be provided by any OS bank, but I'm sure they have other ways to deal with that without working a dead end elsewhere.

Can't say about 2257 - doubt they have included that element, but, rest assured, they would probably make it up as they proceeded with some action.

From a tax angle, yes, that .1% would be relevant on filings and you are responsible for declaring that interest. But...there are sub-clauses to this and can't get specific, but relate to the capital of the corp and a few more factors. This is something for a US tax accountant.

Wish it was the solution :winkwink: Na.. any "benefits" recieved would be taxable.

I know it from the American point of viewing living in Canada and working. I can't really say how it works in other places..


Not at all, very safe, won't ever get blocked, and legal if done correctly.



Lots of Americans own other companies offshore, why I asked this.. Yeah, going to be a tough one.


I don't have to declare what the company made, I'm not a majority share holder. And I think I would need to be a director, maybe.



Hehe, read up on it.. It's not taxable income.. I just don't remember all the ins and outs of it. Gold isn't traceable by the US Gov once it has been converted. Paying yourself I think by dividend by a foundation is where you get away with it.

On the last point first :winkwink: - Yep, there may be a legal loophole, but would think any tax authority would want evidence from a foundation and probably some paperwork to establish the true purpose of the foundation, who the trustee is and all kinds of stuff.

Back to point one - let's put it this way, - the problem is not so much other countries, but down to personal circumstances and what citizenship an individual may hold. If that happens to be a US citizenship - major problems. If it is citzenship of any other industrialised country - not a big deal. In for example... the UK, it's simply a matter of announcing "I'm leaving - don't send any more tax forms" and you then live elsewhere and pay whatever or no tax depending on your new jurisdiction.

The second point - not sure where you are going on this. The use of plastic and drawing funds from foreign banks accounts where these funds are "earnings", and, not declaring these funds in a high tax regime, is illegal. Was not saying the cards would be blocked at the ATM end, but that no information would be provided at the bank-issuing end if that was an offshore area - that is what was mean't by blocking.

Point three - yes, there are plenty US folks with OS corps and most likely a fair amount are being operated legitimately and with good justification. (There are plenty reasons for OS other than taxation). However, bets are that the majority are no more than an excuse to avoid taxation while the beneficiaries remain within the US. This has been the source of many investigations and legal action over years.

Point four - Can't really comment on this - it's kinda complex when you say you are a US citizen living in Canada etc and really depends on the specifics of whatever scenario - not something to be published on a board :)

Summary! *s* There are ways to do whatever and achieve a good result, but these depend on citizenship, real purpose of any structure etc and are sure complicated if there is US citizenship involved. I'm not into bending rules and deviating to avoid taxation - it's far easier to have this transparent and comply with all laws and avoid hassle. For non-US folks, it is a lot easier than it sounds, tho if structures are involved, - it prob takes about a week thinking over the possibilities then - the rest falls into place fairly well.

I replied in the context of what the original poster seemed to be getting at and what most people on this board consider to be "going offshore".

Sure, but not for a US citizen, unless they want to give up their passport and renounce their citizenship. Alot easier from other countries, I myself dont live in my home country and have residency rights in more than one other country which makes my situation very fortunate and easy to do what you have suggested - pay no taxes (or no more than you choose to for other reasons).

That is very different to most of the people on this board who live full time in one country, or are US citizens. Off shore, or companies outside their home country can still be very beneficial.

Thats just wrong with very few exceptions which cost more money than its normally worth to avoid. While it may have been regularly possible 5 years ago and its sometimes possible now you are just asking for trouble at some point in the future.

Which was the point of my first post. Alot of the bigger corporations in Adult run multi country operations, and I know from first hand experience they regularly arent using the right company setup and paying more tax than they should.

Ultimatley anyone who is trying to avoid paying taxes on money they are spending IN their country of residence is asking for trouble. Just as stupid is paying more tax than you should when you have legitimate reasons and ways to minimise it.

Jayson, you once said you were recommending some banks in the EU, which were rather adult friendly and offered complete online banking - which specific banks did you have in mind?

you told someone to e-mail you back then (about 1 month ago), I inquired out of curioisity as well, but you didnt reply to me

I thought I replied to everyone, though it wouldnt be the first time I have overlooked an email.

Whats your email, and I will shoot you the info. Its not something you can organise yourself, and obviously banks dont want their names plastered on adult message boards.

aristocrat at gmail dot com

thanks in advance :)

Sure.. hear you Jayson :thumbsup

Personally, it is a lot easier actually having residency elsewhere as you say and electing to do what you want :)

The comment was never intended to apply to US people - and have never become involved with any OS stuff with US folks simply because there are too many problems.

The rest of the world (almost) is fine and agree - there is a valid use for whatever structures depending on circumstances and tax legislation within "home countries".

Unfortunately there are a fair number of people who are only interested in tax evasion and usually along the lines of OS accounts and plastic cards at ATM's - This is kinda amateur stuff and boring :) Agree, there are a lot of other possibilities - even other than taxation - where foreign corps can have a use and all depends on how they can be applied to whatever circumstances.

When you consider that "webmastering" and other support type services can be mobile, it is surprising that there are not more people taking advantage of that. Tho - a good few are, and have been operating physically offshore for a number of years now.

thanks, got it




and a bump for this thread, im always interested in reading offshore banking discussions on gfy

Why? Why has it changed in the last 5 years? VISA US and VISA EU don't use the same banks, or follow the same rules. As long as you don't 'live off the card' they would have no way of every knowing, tracking or finding out what the card is doing. It's not like you use it to take out cash.

Nothing should change, you keep your US based income, pay taxes, ect.. But when it's time for a couch (not a car) you pull out your special card.

Lets just say... I don't have one of these cards but I know a few people that may. The way around things is pure amazing and as long as you keep the greed in check, you will be fine.

What has changed is the desire of numerous countries (US, Australia for example) to crack down on this.

Combine that with the advances in computer software that lets them match data alot better.

More and more banks outside the US wont touch accounts that have a US citizen anyway associated with them because they dont want to deal with the data requests.

If you are tax resident in a country and spending money there then you should have paid tax on it.

If you are lucky you may get away with it for years, or you may not. The one thing it is not is 100% safe.

It has little to do with VISA US, VISA EU or VISA Mongolia, although there is monitoring on at least the first two regions.

You appear to be referring to the US, so - irrespective of the card, there is no problem tracking that card if this was a source of interest. There definately is an interest in any US citizen who appears to be have control, connected to an offshore corp or who is using an offshore credit card.

To quote "it's not like you use it (the card) to take out cash" but may use it to buy a couch. Do you not think, forgetting the cash part, that is more concrete evidence of a specific individual using a specific card at a specific location???

To quote, "The way around things is pure amazing and as long as you keep the greed in check, you will be fine." There is nothing amazing about it - it's called tax evasion.

In the last five years, - actually happened earlier than that - there have been various operations set up in both the US and EU to address the abuse of offshore scenarios being used illegally for tax evasion in the countries of the beneficiaries. Several prime cases have established principles involved, other action has been taken against, eg VISA International. In the EU laws have been amended to adopt these principles and in the US card monitoring is commonplace (for various reasons, not just related to tax evasion). On specifically US citizens using cards for tax evasion, there are monitoring facilities doing just that. Particularly with the US, there are MAT's (Mutual Assistance Treaties) in place for cooperation in financial crime and a range of other issues.

In the last 10 years or less there have been a series of rulings/enforcement by OECD imposed on what can be described as offshore's as well as industrialized countries. Almost all jurisdictions now comply with OECD rulings. (Will say, I don't agree with a number of these rulings for various reasons, but, it is not of great relevance as long as there is no illegal conduct.)

The core weakness in people using offshore facilities to attempt to evade taxation rests with one factor - "Where do they reside when operating these offshore facilities?" If they reside within a high tax regime country where they are obliged to follow the laws of that country - that is an obvious problem. Several EU countries now have rights to formally demand any other country open the banking accounts of any of their citizens who are involved in illegal activity. In the US, and relating specifically for US citizens, the tax laws are very clear already and annual reporting of all foreign income is mandatory. Failure to disclose is an offense.

Generally offshore banks have no interest in the tax arrangements of their clients - it is not their business. However, misuse of the laws of offshore areas to specifically commit financial crimes in other jurisdictions is not the type of business they want. They have all been there, done that and tired of hearing about it.

Summary - Re your quote - "Not at all, very safe, won't ever get blocked, and legal if done correctly." There is nothing "legal" about tax evasion and how safe this is depends on what level you like to gamble.

Totally agree Jayson.

You guys aren't even worth talking to about this. Everyone knows it isn't legal, that's the entire point. And you do pay taxes on the purchase, you don't pay tax on the money it ads to your possible income.

And you shouldn't have to pay taxes on it.. Since the entire tax code says corporations have to pay taxes with the US corporation, and the last time I checked, my ass wasn't a corporation, and you can't find anywhere that it says a human has to pay taxes.

The person with that card doesn't own the company, the card is simply issued to them. I can have a credit card for 100 different companies and I don't have to report crap.

Anyway, it's pointless to talk to you people. This entire thread is about off shore and paying less taxes.. It's not 'clean and cut' like YOU think.. Their are 100's of options, including foundations.

I am in same boat as yr friend and would love to hear from anyone regarding visa compliant processing from EU
I would stay away from the tax avoidance part though because the penalties can be severe

:1orglaugh

OK.. First para... If it is not legal under whatever jurisdiction you are obliged to comply with, you expect anything other than pointing out the obvious? Only my :2 cents:, but have no interest in encouraging/misguiding other people into an area of tax fraud, which will, most likely be detrimental to them.

This thread has outlined many possibilities (and sure, there are more) where there is a valid use of "legal" offshore facilities. To enter this area with a mentality of heading towards tax evasion is not healthy and very amateur. There are many valid uses of offshore - and any other structures - other than with an attutude of greed/fraud and these have several benefits, and, we take up these options where there is no personal or corporate taxation or form-filling. The difference is it is legal and there is no requirement to hide behind nominees (although - for other reasons, nominees can be useful), form vague foundations or use plastic cards to defraud.

Para two - "And you shouldn't have to pay taxes on it.." What you shouldn't do and what you are obliged by law to do, are two different things. I'm sure an IRS audit team will be pleased to explain - opinions don't matter.

Regarding the rest of para two, - the tax laws of the US are clear, and, I know some folks contest them, but they are the laws which are being applied now and those on which any tax evasion offenses would be based.

Summary - The type of activity you are suggesting has been the subject of enforcement operations in numerous countries, including the US, and it is not the type of business any offshore jurisdiction wants to attract. From an OS banking angle, all banks in offshore areas have regulatory authorities, and, just trust me on this - they know a lot more information than most banks as to what transactions pass thru these banks. Their job is to keep all banking "clean" and maintain the reputation of whatever OS jurisdiction - they don't like fraud/evasion too much :)

If you wish to take advantage of OS legally - there are other ways and this involves investing mainly time and some funds with experienced professionals and where there would be a need for complete disclosure of your background scenario since each person will be different. For US citizens, this is harder and may, or may not, be possible - many offshore lawyers feel they are unable to handle US folks because of this, but others can be just greedy enough to sell a few meaningless corps to them (as may have been the case with Richard Schueler). Other offshore lawyers will not enter US territory or give any advice within those territories.

Bottom line - it's all about *you* and what citizenship is held. That will dictate the laws applicable.

PS... Relating to Mr Schueler's demise/problems, since this is a classic example of what not to do. Mr Schueler elected to live in Panama for reasons well-known to him. He remains a US citizen with an obligation to comply with certain US laws irrespective of where he lives.

By moving to Pamana, this, in reality mean't he moved to a location which has a MAT (Mutual Assistance Treaty) with, specifically the US, and this enables an information flow direct to US authorities.

Very unwise move, but that is a common situation when the background personal circumstance have not been thought thru and not "clean", but with an ulterior motive. It is far easier to stay "legal" and avoid hassle.

I did say it was illegal, not legal. And it's bullshit that America and Israel are the only two countries that have to continue paying taxes even after you choose to work and live within another country.

Sure.. agree - you did say that :)

You are correct - there are around four countries where this applies. Prob the only "western" country which would be applicable to most people on this board is the US. The others are places like Lybia, Saudi etc.

It's probable that Pornguy was referring to the US citizen foreign resident allowance. There is an IRS allowance of around $80K for US folks who are resident in another country :thumbsup

Outside of my rants, this thread does contain a good deal of info. Overall it's just easier to stay and pay.

And for the record.. I don't have one of these cards, and like the rest of the sheep I pay my personal taxes, and of course I pay my corporate taxes which is law.

:) Sure - everyone is different and each probably have personal family issues and other factors to consider - and it's not always about taxes. In reality, I don't mind paying taxes, tho obviously prefer to minimize these. The main factor is not having to waste time accounting for taxation - did that for years and sick of it *lol*

The other major benefit is more lifestyle (you get used to no taxation when it's a "norm") - lifestyle is generally far higher than in industrialized countries and it would be hard to go back to that scenario without whining and moaning. Would also doubt it's just my experience (in fact, know it's not) - there are a wide range of interesting people "offshore" - this may be because they have achieved whatever in their own field of expertise and elected to plan a future life in "paradise world" locations. The chances of meeting that range of people in an industrialized society would probably be remote.

Other biz aspects are "opportunity" when that is blended with the concept of offshore. Some opportunities would just not have been feasible in an industralized country, but mean many millions when allied with offshore - and no taxation on these funds.

There is probably one golden rule which is - "Always comply with all laws in the jurisdiction in which you reside" - this applies to both on and offshore, but there is total freedom in the choice of that jurisdiction :)

I can set you up with a merchant account in EU, Netherlands based. You can email me jayson @ 2fpm com

You would want to be doing around $25K per week to make it worthwhile.

Jayson