
Anyone have the skinny on incorporating offshore?  Say, Bermuda? - kingkongrevenge
Delaware vs Bermuda, or somewhere else offshore.  Has anyone sussed the pros and cons?<p>Obviously it doesn't matter if you have no revenues and are just shooting for the liquidity event.  But let's pretend we're talking about a profitable private concern that will stay private.
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dazzawazza
A poker company I worked at created a second company off shore and it licensed
the poker software from the UK registered one or some such shenanigans.

You definitely need a good lawyer that does this sort of thing. There are a
lot of complications (in the UK at least) for share holders and their tax
liabilities. A good lawyer needs to structure the company in such a way as to
make it as simple as possible.

There are overheads. Host territories require 1 or more people to be employed
within the host state for full incorporation. The more dodgy the place, the
more reliable people cost. If you get it wrong they walk away with all your
money and the host country doesn't really care.

To be fair the the poker company PKR.com incorporated in Guernsey (small
island of the cost of france) and AFAIK it's all gone well for them so it can
work. The thing is they see millions of dollars a day going through their
account so it's worth it. They are a very legit Poker company and DO pay taxes
in Guernsey but none to the UK government which are at a higher rate.

You definitely need a specialist lawyer. It's a moving goal post as countries
change laws to try to stop this sort of thing. As goal posts move lawyers
costs add up. You are looking at legal costs in the 25-50 thousand uk pounds
(obviously I wasn't privy to the exact costs at PKR but I remember seeing the
bosses face when the legal bills came in!).

Good luck.

~~~
swombat
In terms of tax liability, afaik, if you control the company from the UK and
you take money in and/or pay money out in the UK, you are subject to UK tax
law, even if you're incorporated in Belize or something.

~~~
dazzawazza
That matches my understanding. That's why PKR (the money side) is a seperate
company from PKR (the development/services) side. One hires the other to do
work.

I'm sure this is an over simplification of how it really works but that's how
it was explained to me.

Anyway as the development company doesn't get much more then the
development/support costs so doesn't pay much in taxes.

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icey
Instead of over-complicating the fact that you want to pay as little taxes as
possible, you ought to consider hiring a competent tax accountant who could
likely give you nearly the same benefits by incorporating the appropriate
location inside the US, without having to get into the considerable overhead
of incorporating overseas.

~~~
j2d2
Consider Delaware.

~~~
josefresco
Las Vegas Nevada is also another consideration. Get yourself a bank account,
'office space' and it's a done deal.

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icey
You don't need either of those things for a Nevada corporation. You just need
a registered agent; which can be had as a service for like a hundred bucks a
year.

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staunch
I'd rather have $2 million and be able to relax about my taxes than have $4
million and be constantly in fear that I'm breaking some law I don't fully
understand and could lose it all.

The more money it is the less I'd be willing to take the legal risk. And don't
ever kid yourself that it isn't legally shady and risky.

~~~
josefresco
Even if the IRS comes after your business, you can typically pay them off.
Typically IRS agents deal on a very personal level, and the IRS is simply
another business (masquerading as a government agency). They'll take money to
settle and move on to the next target.

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bdfh42
If I was thinking about becoming a trading partner of a business that was
incorporated in an "offshore haven" then I would think twice. I would ask
myself if I would still have the protection of contract law and if there was
likely to be anything else slightly "rum" about an organisation that did not
want to pay it's dues to society.

~~~
kingkongrevenge
Give me a break. A big fraction of the DOW is offshore. Tax avoidance is a
reality of business.

~~~
gojomo
Do you have a reference for "a big fraction of the Dow is offshore"? Your
claim motivated me to try to find facts, and I couldn't find a summary either
way.

~~~
johnyzee
If they are not offshore I assure you that it is only because they can get
away with even less taxes by having a registered charity as a holding company
for their assets, or whatever other shell game company structure is more
profitable these days.

<http://www.mentalfloss.com/blogs/archives/14675>

~~~
josefresco
Exactly, see IKEA

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fizz
Vanuatu sounds the kind of place you are asking about.

This link:

<http://en.wikipedia.org/wiki/Vanuatu>

Has this quote:

"Vanuatu is a tax haven that until 2008 did not release account information to
other governments or law-enforcement agencies. International pressure, mainly
from Australia, influenced the Vanuatu government to begin adhering to
international norms to improve transparency. In Vanuatu, there are no income
tax, no withholding tax, no capital gains tax, no inheritance taxes, or
exchange controls. A disproportionately large number of ship-management
companies choose to flag their ships under the Vanuatu flag, because of the
tax benefits and favorable labor laws. Several file-sharing groups, such as
the providers of the KaZaA network of Sharman Networks and the developers of
WinMX, have chosen to incorporate in Vanuatu to avoid regulation and legal
challenges."

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gommm
I'm currently in the middle of trying to incorporate offshore.

I'm going the offshore way because: \- Creating a company in my home country
(france) is way too complicated and I don't want to pay tax to support a
government I hate (sarkozy) \- I'm currently living in malaysia on a tourist
visa and as such it's difficult to create a company there \- Since creating a
company is going to be difficult anyway I might as well spend the time to find
out what is the best place to incorporate without having to pay too many
taxes...

Now I've just started to search for information so if you want we can share
what we find about this.. You can contact me at pm -at- gom-jabbar.org

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aquaphile
If you go offshore, I recommend Bermuda or the Caymans. If, however, you're in
the U.S. use Delaware and avoid offshoring. The legal and administrative
complications and expenses associated with an offshore registration are
considerable. In my opinion, if you are a U.S. business then offshore
registrations only make sense if you have a large amount of profit/capital for
which you wish to minimize Federal income taxes. You can let your capital
accrue offshore -- sans 35% FIT -- and then repatriate the profits every 5-8
years when the U.S. government provides an amnesty (usually unlimited, with a
15% FIT).

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xccx
afaik, assuming you are u.s. citizen living 330 days/year outside of u.s., you
can earn $80k/yr under "foreign earned income exemption".. so an offshore
corporation could pay you a good salary and maybe even pay some expenses if
you wanna push it..

personally, i'd prefer to avoid u.s. taxation because i don't feel at all
represented, ie 50% of my taxes are invested in a war machine that is addicted
to oil and is on a rampage to get it.. there are much smarter ways to create
wealth..

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terpua
For offshore incorporation, get a lawyer. Worth every penny.

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davidw
Why bother, if you're on the up and up?

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kingkongrevenge
Avoid taxes. It's legit. I'm sure there are catches and that I don't
understand all the dynamics.

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inovica
How much money are you currently making? It's only worth it once it becomes
significant. One other thing to point out is that if you are a US Citizen then
you are responsible for paying taxes no matter where you are

~~~
kingkongrevenge
US citizens pay taxes on salary and capital gains, which don't necessarily
have anything to do business taxes. There are many perfectly legit as well as
gray ways to get money from owners equity into a form you can enjoy it with
much lower taxes than you'd get if you just paid yourself salary.

I think the importance of this area of discussion will increase when Obama
starts raising taxes.

~~~
rw
Golly, we wouldn't want Obama to spend public money on society-wide problems
like poverty and food scarcity.

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josefresco
On the topic of paying taxes (or not): [http://www.amazon.com/America-Freedom-
to-Fascism/dp/B000JVSU...](http://www.amazon.com/America-Freedom-to-
Fascism/dp/B000JVSUSE)

