16 {{ upvoteCount | shortNum }}
16 {{ upvoteCount | shortNum }}

Using Offshore Company/Bank Account For Online Sales

by pseudo
12 replies
I've heard a few people talk about setting up offshore companies and bank accounts to do their online sales through... I was wondering if anyone here has actually done this? Basically as I've heard it, they setup a legal entity in a tax haven, get a merchant account for that offshore company and do their online sales through it to avoid paying US taxes. While this seems shady at best, and possibly illegal at worst, I know nothing about it. If there is a legitimate way to do this, I would love to hear about it.
#account #company or bank #offshore #offshore bank account #offshore company #online #sales
  • Profile picture of the author sparklers
    Sure, google does it.

    Google's Irish Solution to dodging tax
    {{ DiscussionBoard.errors[5353423].message }}
  • Profile picture of the author tropvik
    Originally Posted by pseudo View Post

    I've heard a few people talk about setting up offshore companies and bank accounts to do their online sales through... I was wondering if anyone here has actually done this? Basically as I've heard it, they setup a legal entity in a tax haven, get a merchant account for that offshore company and do their online sales through it to avoid paying US taxes. While this seems shady at best, and possibly illegal at worst, I know nothing about it. If there is a legitimate way to do this, I would love to hear about it.
    I know the owners of CupidMedia.com - A Market Leader in Online Dating

    From a conversation i had with them, they set up everything through Panama.

    Merchant Gateway, bank account, everything is set up in a Panamanian system.

    The only negative thing they told me is that they get charged around 12% per transaction.

    But that expense is much less than what they would pay in taxes if they do business through the United States.

    Im thinking of heading to Panama this year to really get to know how stuff works down there.
    {{ DiscussionBoard.errors[5353891].message }}
  • Profile picture of the author 3D
    Banned
    My advice would be to consult both a lawyer down there as well as a lawyer in the location you are in. The IRS is not one to mess with.
    {{ DiscussionBoard.errors[5354195].message }}
  • Profile picture of the author supermonster
    Hello,

    I have provided clients with offshore services for over 10 years and actually reside in an offshore country. Each Offshore jurisdiction has it's own strengths and weakness also the country central bank policies on different business methods on how they generate money all affects the decision on which jurisdiction to use.

    For eg: For Pharmaceuticals websites it best to use A jurisdiction, For online gambling its best to use B jurisdiction etc,

    In reference to the legalities of using offshore structures, tax avoidance is legal and tax evasion is illegal, for an individual who reside in a tax obligated country.

    The value of the asset protection can not be ignored, an offshore structure to protect $1,000 would be different from an offshore infrastructure to protect $10,000,000.

    For offshore asset protection on that scale an IBC, Trust and Foundation would be more beneficial than a singular IBC.

    I hope this answered your question.

    Yours Respectfully
    SuperMonster
    {{ DiscussionBoard.errors[5354379].message }}
  • Profile picture of the author MarkJonesCBDoctor
    dont mess with the IRS!
    {{ DiscussionBoard.errors[5354935].message }}
    • Profile picture of the author David-JP
      Not legal advice!!!

      Basically, where you do the work is where you get taxed.
      So if you do the work in California, but your company is listed as panama- you are still liable for taxes in california- with the added headache of all sorts of paperwork on having a foreign corporation...

      Now- if you move to panama and do the work while there for your panama company, or if you own the panama company, and have people in panama doing the work and you dont do any of it while in california, and fly down there for your AGM etc, then the corporation would be taxed only in panama.

      To make it more complicated- if your panama company hires someone in the US as an employee, you are once again liable for the taxes of anything sold in the US.

      This is a very complex subject- this is a good resource for it:
      The Hard Truth About Venturing Offshore

      Theres a lot of misinformation and BS on the subject so venture carefully.

      David
      Singapore
      Signature
      Free Report: How IM Gurus Pull in 100k-$2mil A Year (Its Not What They Teach You)
      ---------------------------------
      The Nuts and Bolts of Starting-Up and Running a Successful Membership Site
      ==Membership Academy== aMember/Wishlist Hacks and How To Videos
      {{ DiscussionBoard.errors[5355161].message }}
  • Profile picture of the author ErikNilsson
    Best options for offshore

    1)Panama
    2)Singapore
    3)Mauritus
    Signature
    USA Bank Account + ATM Card for Non-USA Residents Service PM me
    {{ DiscussionBoard.errors[5357720].message }}
  • Profile picture of the author Mantasmo
    Simplest and 100% legal way to go about this:

    1. setup in a state with no corporate tax.
    2. employ yourself as a director and pay a reasonable salary (and all taxes on it).
    3. keep the rest of the money in the company and payout dividends when needed (lower tax).

    There's obviously more to it, but this should get you on the right track. There aren't that many easy and legal ways to avoid paying taxes.

    Consult a tax lawyer before doing any of the above.
    Signature


    {{ DiscussionBoard.errors[5357834].message }}
  • Profile picture of the author gerkin
    Indeed no need a physical establishment in your country to process online businesses therefore most of people (if not all of them) set up their company in specific offshore jurisdictions.
    Feel free to contact me at anytime
    {{ DiscussionBoard.errors[5768375].message }}
  • Profile picture of the author Mantasmo
    Here's another good way to go about this:

    1. Move to a country that only taxes remitted income (such as Malta). Establish residence there.
    2. Do business through a company in a respected jurisdiction (Gibraltar, Cyprus or similar).
    3. Get a personal account somewhere in Swiss or UK or whatever.
    4. Get a bank account in the country of residence (say Malta).
    5. Pay dividends to yourself - most into your Swiss account, the rest into your Maltese account.
    6. Submit tax forms and pay income only on your Maltese bank statements (remitted income).

    There's a bit more to it and you must consult a tax accountant/lawyer before doing anything stupid. I know quite a few people do this and it's 100% legal. In some countries (like Malta) last years income becomes capital and isn't taxed when brought into a country... But the rules are a little tricky and you best use a good accountant for this.

    Good luck!

    edit: also be careful when setting up in Belize, Seychelles and similar places. Paypal won't work with you and many other traditional payment processors will be suspicious or refuse you. You can sometimes get merchant accounts in those jurisdictions, but then again some people require Paypal or 2co so...

    Just setting up in Belize while you reside in the UK (for example) doesn't mean that you won't have to pay UK taxes. Not even close.
    Signature


    {{ DiscussionBoard.errors[5768411].message }}
    • Profile picture of the author milla04
      To be quite honest, having an offshore bank account is very pricey, why? 1. When a customer purchases something your site they will be charged an extra fee to process the payment, which will be a pain to explain to the customer and why that fee has been added to their credit card bill.
      2. You are wired payments into your account once every 2 weeks, however in some cases you are charged $10-$20 to wire YOUR own money to yourself.
      3. Merchant fees start from anywhere like 5%-10%, and lets not forgot banks change and extra fee ON TOP depending on the card you payment that has been made. I have seen an extra fee of 1.99%-7.99%. Banks qualify credit cards in certain categories "semi qualified, non qualified..ect"

      The simplest way would be to create an entity in the US that is not required to pay taxes and annual fees, set up your then open a bank account and merchant account. After that get an EIN from the IRS so its all legal and above broad.
      Signature
      EPX Body GUARANTEED income, Can't Recruit? BUY Your Downlines with PROOF and BONUSES
      {{ DiscussionBoard.errors[6008286].message }}
  • Profile picture of the author Vincentasht
    Offshore companies-it is individual choice for each entrepreneur. A lot of offshore countries and can be confusing. My friend found a offshore company formation, that is completely gave all information step by step. About all jurisdictions, and he was able to choose the one that he liked best. You can contact them.
    Very good, educated staff who will answer all your questions you are interested in, they will help in registration, and will contact and help you if necessary.
    {{ DiscussionBoard.errors[10090876].message }}

Trending Topics