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International IM-ers: Offshore LLC?

by atvking
10 replies
Have any of you gone offshore?

My country has absurd taxes, everything is taxed and it compounds to over 60% + to hire a decent programmer and pay him 1000$ legally you have to give another 1900$ to the government this is almost 3K for 1K!

Inspired by some of the richest people in the world I'm going offshore. Two choices come to mind:

1) Wyoming USA ... Yes it seems a bit strange at first to think of the USA as a tax heaven but, for foreigners, Wyoming has no state income taxes for LLC, no information collected to be shared with IRS, privacy protection ect.


2) Singapore has basically the same setup as Wyoming no taxes at all for funds earned outside of Singapore

I would like to hear your opinions on going offshore, has anybody here got a similar offshore LLC company and how did it work out for you?

Thanks for any information.
#imers #international #llc #offshore
  • Profile picture of the author Linx99
    Re Wyoming - although no state income taxes, you'll still have to account to the IRS for federal taxes.

    Normally people associate 'offshore' with outside the US.

    If you're serious about operating offshore, typical attractive choices are Bermuda, Cayman, BVI etc. Get in touch with a reputable attorney - you don't want to mess this stuff up!

    Edit: just my $0.02 - I have no expertise in this - legal or tax!
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    • Profile picture of the author Joe Mobley
      I hear that Ireland has a favorable tax climate.

      If the financial situation continues to deteriorate here in the US, I will be moving to another country.

      This is my primary reason for building an Internet business.


      Joe Mobley

      I am not a tax guy or a legal guy!
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    • Profile picture of the author atvking
      Originally Posted by Linx99 View Post

      Re Wyoming - although no state income taxes, you'll still have to account to the IRS for federal taxes.

      Normally people associate 'offshore' with outside the US.
      Yes but I think I will pay no tax at all because I do not live in the USA nor am I a US citizen so it is offshore to me in any case I will consult a specialist about this. Just looking to maybe hear from others who have done the same.
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      • Profile picture of the author Joe Mobley
        I'm not sure I'm agreeing with you logic here.

        Your company, corporation, or LLC will be an established US legal entity and subject to appropriate US business taxes. By the way, US corporate taxes are 2nd highest on the planet!

        Joe Mobley

        I am not a tax guy or a legal guy!

        Originally Posted by atvking View Post

        Yes but I think I will pay no tax at all because I do not live in the USA nor am I a US citizen so it is offshore to me in any case I will consult a specialist about this. Just looking to maybe hear from others who have done the same.
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        • Profile picture of the author Tom Goodwin
          Originally Posted by Joe Mobley View Post

          I'm not sure I'm agreeing with you logic here.

          Your company, corporation, or LLC will be an established US legal entity and subject to appropriate US business taxes.
          Not necessarily. LLC's, unless the owner(s) elect to treat the entity as a corporation for tax purposes, is not subject to US business taxes as LLC's are considered pass-through entities for US tax purposes. LLC income (except if the election above is made) is treated as ordinary self-employment income by the owner(s) of the LLC and is subject to personal income tax (which is based upon residency and work contacts),
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          • Profile picture of the author atvking
            Originally Posted by Tom Goodwin View Post

            Not necessarily. LLC's, unless the owner(s) elect to treat the entity as a corporation for tax purposes, is not subject to US business taxes as LLC's are considered pass-through entities for US tax purposes. LLC income (except if the election above is made) is treated as ordinary self-employment income by the owner(s) of the LLC
            Can you please explain what it means to "treat the entity as a corporation for tax purposes"?

            Thanks
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            • Profile picture of the author Tom Goodwin
              Originally Posted by atvking View Post

              Can you please explain what it means to "treat the entity as a corporation for tax purposes"?

              Thanks

              The profits of a US corporation gets directly taxed. Then, any income you derive from that corporation (whether by way of dividend or a salary), is taxed as well. This is referred to as double taxation and is a hallmark of corporation taxation.

              If you have an LLC, you may elect to have it treated as a corporation, in which case the LLC would be subject to income tax on its profits, and then the owners of the LLC would also be subject to taxation on money they pull from the LLC. Again, double taxation.

              Otherwise, the income of an LLC is not taxed directly. The income of the LLC is simply attributed to the owners of the LLC and they pay taxes on the income.
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  • Profile picture of the author Anonymous Affiliate
    Panama, Belize, Seychelles, Bahamas, Cayman, BVI... they all offer super-easy-to-setup, zero-headaches and almost zero-tax LLCs.

    A quick Google research on "offshore corporation" will point you in the right direction. There are online law firms who can set the whole thing up for you within 2 weeks for as little as $2000, and all you'd have to do would be to sign up and fax a few documents.

    However, make sure to do a due diligence research on both the law firm you choose, and also on the long-term implications in your home country: in the future, you might have problems bringing a serious lump of money from an offshore destination to your home country if, for example, you wanted to buy a house. If your business finally takes off and you make serious money, you might run into problems spending that money in your home country while staying "under the radar"...

    Disclaimer: I'm not a lawyer, I don't know crap about tax and I'm talking out of my butt without any knowledge or experience whatsoever.
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  • Profile picture of the author DogScout
    Nevada is the ONLY US State that has not ignored the protection of an LLC when it is owned by one person. (In every other state, there are precedents where a judge has ruled the LLC protection was not applicable in single entity owned LLCs). ***They also have no State tax as long as you distribute all profits at the end of the fiscal year.***

    With that said, Nevis and/or St Kitts have the most secure guards as to info divulged and taxes levied, AT THIS TIME. (The best place changes from time to time. Once Switzerland was best, then Bermuda, The Caymans, and so on). Incorporating a blind trust is obviously the best option, but you will be looked at, (though no one will be able to know who they are looking at). Lol. If you use a blind trust, as long as it is not in your country of residence, you are mostly OK. (Of course, the country you incorporate in has to have blind trusts available).
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  • Profile picture of the author Tom Goodwin
    Originally Posted by atvking View Post

    Have any of you gone offshore?

    My country has absurd taxes, everything is taxed and it compounds to over 60% + to hire a decent programmer and pay him 1000$ legally you have to give another 1900$ to the government this is almost 3K for 1K!

    Inspired by some of the richest people in the world I'm going offshore. Two choices come to mind:

    1) Wyoming USA ... Yes it seems a bit strange at first to think of the USA as a tax heaven but, for foreigners, Wyoming has no state income taxes for LLC, no information collected to be shared with IRS, privacy protection ect.
    I have a few Wyoming LLC's and they work well. Cost of formation + monthly expenditures on them are reasonable.
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