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Anonymous (or with nominee) company in Europe
- Thread starter eklia
- Start date
Use translate in your browser. Certain features are widely used outside the English world. That's when English literature becomes scarce.
I'd say; mostly monetary. (I never came across silent partners that invested in the form of work.)
Also, if you are broke but have a good idea, maybe some Joe Doe wants to invest in you but without appearing anywhere. You then make him a silent partner.
In any case, the silent partner is never the one you need to find. It is always the official partner that you need to find.
Ill copy here a binding tax assessment issued by the tax authority (google translated)
application:
The applicant plans to start offering cross-border remote gambling services (which are exempt from VAT according to the VAT Act) to end consumers of another member state via an online platform and applies for a corresponding license from the supervisory authority there. Although one of the applicant's three board members resides in another Member State, it only has a representative role. All important decisions are made in Estonia, where all key employees of the applicant are also located. To mitigate business risks, the applicant plans to cooperate with a third-country company in the form of a joint venture (partnership). The applicant would contribute to the partnership by organizing gambling and guaranteeing the requirements submitted to the gambling organizer, while the other side of the partnership would provide the IT support necessary for the provision of services. The costs incurred by the parties shall be borne by them. Profit sharing and loss coverage based on the partnership agreement is done according to the contribution of each party. The applicant asks the tax authority to confirm that the applicant does not have an obligation to register for VAT in Estonia as a result of providing the remote gambling service and has a permanent place of business in another member state, that the distribution of profits and the covering of losses based on the partnership agreement are excluded from the applicant's VAT calculation and that the applicant is not obliged to declare the profit distribution payments made to the other party of the partnership for reverse charge taxation as a related acquisition.
tax office:
The Tax and Customs Board considers that the provision of a cross-border VAT-free remote gambling service to end consumers located in another Member State, as described in the application, does not result in the applicant being required to register as a VAT subject in Estonia. Nor does he have a permanent place of business in another Member State in the sense of the VAT Directive, Implementing Regulation No. 282/2011 and VAT Act. The tax authority considers Estonia to be the location of the applicant and the place of provision of services. At the same time, the creation or non-creation of a permanent place of business in another member state is primarily for the local tax authority to assess and identify. The sharing of the partnership's profits and the covering of losses based on the partnership agreement is completely excluded from the applicant's VAT calculation, provided that each party bears its own costs and gets the right to the partnership's profits (or the obligation to cover its losses) according to its contribution to the partnership. That part of the profit-sharing or loss-covering payment, which exceeds the contribution of the payee, is considered as payment for the service provided by him to another partner, and it generates turnover for the payee. The applicant does not have to declare the profit-sharing payments to the other partner in the VAT return as an acquisition subject to reverse taxation (reward for the last service received), provided that these payments correspond to the contribution of the other partner. In the case of sums transferred to another partner, the applicant becomes fully or partially liable for reverse taxation in situations where the distribution of profits on the basis of the partnership agreement cannot be clearly separated from the applicant's usual business, where, regardless of the conclusion of the partnership agreement, the economic content is a covert payment for the goods and services received by the applicant from the other partner, or where these are profit sharing payments, but the applicant makes payments to the other partner more than the latter's contribution to the partnership would expect that.
application:
The applicant plans to start offering cross-border remote gambling services (which are exempt from VAT according to the VAT Act) to end consumers of another member state via an online platform and applies for a corresponding license from the supervisory authority there. Although one of the applicant's three board members resides in another Member State, it only has a representative role. All important decisions are made in Estonia, where all key employees of the applicant are also located. To mitigate business risks, the applicant plans to cooperate with a third-country company in the form of a joint venture (partnership). The applicant would contribute to the partnership by organizing gambling and guaranteeing the requirements submitted to the gambling organizer, while the other side of the partnership would provide the IT support necessary for the provision of services. The costs incurred by the parties shall be borne by them. Profit sharing and loss coverage based on the partnership agreement is done according to the contribution of each party. The applicant asks the tax authority to confirm that the applicant does not have an obligation to register for VAT in Estonia as a result of providing the remote gambling service and has a permanent place of business in another member state, that the distribution of profits and the covering of losses based on the partnership agreement are excluded from the applicant's VAT calculation and that the applicant is not obliged to declare the profit distribution payments made to the other party of the partnership for reverse charge taxation as a related acquisition.
tax office:
The Tax and Customs Board considers that the provision of a cross-border VAT-free remote gambling service to end consumers located in another Member State, as described in the application, does not result in the applicant being required to register as a VAT subject in Estonia. Nor does he have a permanent place of business in another Member State in the sense of the VAT Directive, Implementing Regulation No. 282/2011 and VAT Act. The tax authority considers Estonia to be the location of the applicant and the place of provision of services. At the same time, the creation or non-creation of a permanent place of business in another member state is primarily for the local tax authority to assess and identify. The sharing of the partnership's profits and the covering of losses based on the partnership agreement is completely excluded from the applicant's VAT calculation, provided that each party bears its own costs and gets the right to the partnership's profits (or the obligation to cover its losses) according to its contribution to the partnership. That part of the profit-sharing or loss-covering payment, which exceeds the contribution of the payee, is considered as payment for the service provided by him to another partner, and it generates turnover for the payee. The applicant does not have to declare the profit-sharing payments to the other partner in the VAT return as an acquisition subject to reverse taxation (reward for the last service received), provided that these payments correspond to the contribution of the other partner. In the case of sums transferred to another partner, the applicant becomes fully or partially liable for reverse taxation in situations where the distribution of profits on the basis of the partnership agreement cannot be clearly separated from the applicant's usual business, where, regardless of the conclusion of the partnership agreement, the economic content is a covert payment for the goods and services received by the applicant from the other partner, or where these are profit sharing payments, but the applicant makes payments to the other partner more than the latter's contribution to the partnership would expect that.
So in other words, we’re right back to what we’ve always talked about, both in public forums and in Mentor Group Gold. You need to go out and find an imaginary friend, a homeless person, or someone similar who then officially owns the company.
One would think you were trying to sell something here, but there’s nothing new under the sun about having a "silent partner." I honestly don’t see what use this would have, other than the fact that I could inject capital into the company, lend money to it, or borrow from it.
Do you really think the tax authorities are so stupid that they wouldn’t see right through this, just like with many other setups, if they’re not properly thought through?
This so called "brilliant idea" is hardly something I hope anyone spent much time coming up with.
One would think you were trying to sell something here, but there’s nothing new under the sun about having a "silent partner." I honestly don’t see what use this would have, other than the fact that I could inject capital into the company, lend money to it, or borrow from it.
Do you really think the tax authorities are so stupid that they wouldn’t see right through this, just like with many other setups, if they’re not properly thought through?
This so called "brilliant idea" is hardly something I hope anyone spent much time coming up with.
Well it works well.
How otherwise there are cases like where just one employee of the Panamanian law firm, Jacqueline Alexander, was a
nominee director or shareholder of more than 17,000 shell companies.
Silent partner is just an alternative structure compared to trust jurisdictions where you can have nominee shareholders.
No, and its not always about tax but it can be about privacy.
So, may I ask, what’s the difference between this setup and simply registering a company in the name of an imaginary person while not being involved in the company in any way? It’s basically the same thing.
And as for signatures, video verification, etc., that’s a different discussion we should keep within Mentor Group Gold, but it can easily be handled.
What exactly is the advantage of this setup?
And as for signatures, video verification, etc., that’s a different discussion we should keep within Mentor Group Gold, but it can easily be handled.
What exactly is the advantage of this setup?
Silent partners is something else then nominees. She was just a nominee. Like there are hundreds of people in Europe doing similar things. In a previous life I've been one myself. Its part of the job so to say.
Not really, but hey, you do you. Let me know how it goes because it wont be a walk in the park. Expect continuous problems with your banks for instance.
Also not true. The details of silent partners are known at all banks, and depending on jurisdictions at the companies register and in UBO registers. UBO registers are not in every jurisdiction publicly accessible. In most countries the companies registers are. There is not a lot of digging required to find out who is the silent partner.
The silent partner structures are not for nothing slowly being phased out and or banned. It's an obsolete entity form which in very specific cases only has some use left.
Yes they are different concepts, but share some similar characteristics. The point is, you can use different legal arrangements to achieve the same objective in the end.
Other similar concepts include:
German Treuhand is a contractual relationship wherein a person (the Treuhänder ) is entrusted with certain property (the Treugut ), which he has to administer or dispose of, not in his own interest but in the interest of another person (the Treugeber ) or for a specific purpose.
French Civil Code defines the fiducie as a transaction with which the constituant transfers things, rights, or securities to the fiduciarie , who, keeping them segregated from his own patrimony, acts so as to further a particular purpose for the benefit of beneficiaries.
Banks are indeed often frustrating to deal with, but I do know this to be working in thousands of cases.
And if you don't like banks you can use crypto instead.
I generally agree, but it doesn't apply to all jurisdictions.
You are talking about ... drum roll... the trust. And if you have been following what is happening with trusts globally then you know that the concept is also slowly disappearing. Again because of the KYC/CDD/Compliance. New structures are hardly able to fulfil all obligations. Current/existing structures are getting the benefit of the doubt.
I think its fair to say that the penetration of crypto in day to day business is far from being accepted.
It's perfectly fine if @Don believes he has a solution that can work the way he describes. However, for now, I have to agree with @happyjohn that he is posting in riddles, and one has to guess how this could be put together, if it is even possible at all.
True. Many solutions have become redundant.
Yes, I can though I think it deserves to be at least in the mentor group section of this forum.
I believe its quite valuable information, especially when supplemented with legal references, and I'm normally quite happy to charge for sharing this.
Yes, its not effortless to get banking these days.
There are also more and more reasons why such structures are not so openly marketed or effective anymore, such as GAAR, BEPS MLI, and coming Securing the activity framework of enablers (SAFE) proposal, to name a few.
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