Archive for category Starting an Offshore Company

Hong Kong Company – OECD Tax Sharing Treaty Update, Part 4 of 7

Posted by admin in Hong Kong Banking, Starting an Offshore Company, Swiss Banking Alternatives, asset protection, offshore asset protection on May 16th, 2010

Continued from part 3 of 7, Belize – OECD Tax Sharing Treaty Update.

Hong Kong:  Absolutely the best option out there that we know of for a multi-currency (10 different) corporate account with internet banking with one of the largest banks in the world in one of the world’s premier and largest offshore banking jurisdictions.  Their business integrated accounts combine  efficient low cost online multi-currency banking with a sophisticated online trading platform for securities in multiple markets and forex.  No physical presence and even no bank or reference letters required under this program! Only US$700 is needed for the minimum account opening balance. Bank account opening accomplished within 3 business days and requires the formation of an HK Private Limited Company which can be joined to a Panama foundation and with the use of a nominee director can give you the best of all worlds – anonymity and privacy without having to sacrifice service and pay high fees. One of the most hassle-free bank account opening options we know of unless you are already an HSBC premier customer in another country.  Even then you will find it possible only to open a personal account in Hong Kong through your local branch’s international department and expect it to take weeks and probably months.

The simple requirement is to take your account opening paperwork which will be provided to you, along with your passport and utility bill and have your signature and documents witnessed by an HSBC bank officer in any branch anywhere in the world. That’s all there is to it along with the submission of a simple 2 page business plan according to a pre-approved format we will provide you with.

Hong Kong has an incredibly sophisticated financial services sector with over 160 major banks established there, who are liquid and robust.  Couple that with fact that China owns Hong Kong and will not be pushed around by the OECD countries means that there will probably never be any tax treaties on the horizon with the rest of the world.  Also all deposits in the territory are 100% covered by deposit insurance. Banking secrecy while not enshrined into law like Panama’s and therefore not as robust is still adequate and respected.  We can’t recommend it enough which is why we have moved much of our own business banking to the territory. For more information on our Hong Kong incorporation and banking packages go to our Hong Kong Corporation page.

To continue reading, see St. Vincent Company – OECD Tax Sharing Treaty Update, Part 5 of 7.

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Panama – OECD Tax Sharing Treaty Update – Part 2 of 7

Posted by admin in Panama Taxes, Panama banking, Starting an Offshore Company on May 4th, 2010

Continued from part 1 of 7, “OECD Tax Sharing Treaty Update Overview.”

Panama:  we have cemented a new banking relationship in Panama that will allow our clients the ability to open bank accounts without having to travel to Panama.  The requirements are quite strict compared to many other countries but if you want the best banking privacy likely to remain intact this may be a good option.

It is becoming increasingly hard for foreigners to open bank accounts in Panama, especially without visiting first, because of the Superintendant of Banking’s compliance crack down to make sure that the banks have a rigorous “know your customer” policy in place.  In part this is a governmental reaction to the fact that they do not intend to be signing any one sided tax information sharing treaties, so the banks have been told to keep an extra clean house by the government.  Panama’s policy is to only sign selective and advantageous double tax sharing agreements with countries where there are mutual business interests and advantages to both sides to do so.

There are going to be no one-sided agreements, which is the problem with the normal Tax Information Sharing agreements.  Also, the burden of proof to show that a fiscal crime has taken place is quite exacting.  This is designed to prevent the “fishing expeditions” that would otherwise be the end result.  Panama and Mexico have signed such a treaty with more in the works with Italy, Belgium and Spain.  Expect Panama to do as little as minimally possible and avoid putting anything in place with the U.S. or Canada, while at the same time possibly causing local banks to react by be overly cautious due to heightened compliance and inspections by the Superintendant of Banking’s  office.  For more information on banking in Panama, see our Offshore Banking in Panama page.

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Start a New Offshore Business or Internationalize an Existing One

Posted by admin in Panama banking, Starting an Offshore Company on December 9th, 2009

Starting an enterprise that will do business globally or restructuring an existing one by setting up an offshore subsidiary to handle all non-domestic business is probably the most effective way to reduce and/or defer taxes for any business that can market its products and services overseas.  The strategy is to set up the company in a country that does not tax income derived from outside of its borders.  Any country like Panama, which only taxes income generated from domestic sources, becomes the perfect location either for your international subsidiary or global headquarters.

For U.S. taxpayers this is probably one of the few and best loopholes to take advantage of.  The Obama administration has recently abandoned its plans to go after overseas corporate income.  Current tax code allows US corporations to defer paying taxes on income earned overseas until that money is repatriated to the United States.  Obama wanted to change this law, but has recently abandoned his plans.
Entrepreneurs with overseas income can greatly benefit from this tax rule.  With a properly planned business structure, businesses can defer paying taxes on overseas income, indefinitely, until the funds are brought back to the US.  The same rules apply if you are a taxpayer from any other country of the world that we know of where income derived from overseas operations can remain tax free until repatriated.  The reason why the U.S. government backed down on this is that US companies forecasted another round of deep job cuts if the tax hike were passed, citing the fact that companies from other countries enjoy these same tax benefits, and it would put them at a severe competitive disadvantage were they to be put in place.

For U.S. taxpayers there are still some reporting requirements involved if you have an ownership interest in the business in excess of 50% so we recommend forming a foundation to place the shares into, and for the foundation beneficiary to be someone other than yourself and family members.  Also there are much more complicated and cumbersome rules if some of the business income is derived from passive investment sources. More guidance on this strategy can be found in our IBC/Panama combination section.

If you are ready to go global, all that needs to be done is to choose one of our quick and easy offshore corporation and banking packages and you can be ready to start operations in as little as two or three weeks. In the event of an audit the tax authorities in some countries like the U.S. and Canada may require actual proof of a physical office structure as well as other domiciliation documents as evidence, such as a company utility bill, although an offshore virtual office arrangement ill usually suffice for most uses. In the case of internet businesses web hosting should be contracted for overseas and anything else that would show a domestic connection on the website should be as far as possible avoided.  See our offshore E-Commerce solutions page for information specific to setting up a global e-commerce related business in an overseas location.

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