Hello all,
I'm looking for a bit of feedback and/or guidance in order to best protect a few things, namely:
1. Physical assets (equipment/machines);
2. Intellectual property (digital/code);
3. Ownership Interest in business(es);
For all purposes, the companies which I want to protect ownership interest in are US-based (C-Corp, LLCs). The intellectual property is all code, belonging to me in a personal capacity but will soon be licensed to be used by businesses. There is a significant amount of equipment/machines that are physical assets (mainly within US, Canada, NL, NZ) that I'd like to protect as well. I understand that the physical assets are more a law of the country versus a law of the owners jurisdiction, but, nevertheless I want to bundle them all up in a protected structure.
I have no real threat model that someone would attack my interest in them or rights, it's more to just shield myself (future proofing planning), and to add a layer of privacy. My geographical region is Canada currently, I intend to re-locate to Europe (Ireland) or UAE (Dubai / Abu Dhabi) in the next 1-2 years. I'm not 100% set on where I'll be relocating to as of yet.
I've spoken with Sinclairs law firm on Grand Cayman, I spoke with CEC as well as some others in the Caymans, they all said that it's a great region for protecting assets, property and ownership interest, but banking would be nearly impossible, so any dividends/distributions would be difficult to do (except, of course, if distributed using crypto but that opens a whole new set of potential issues).
I spoke with Flag Theory who provided some more (than I already knew) insight in Seychelles, Nevis and some other regions. I was fairly impressed in their rundown, but again they gave me a "SVG would work, BVI would work, Caymans would work, ... would work, etc", in effect any region would work but not overall helpful. So I did a lot more research and I've dug into two ideas, and please let me know if I'm off base, or if this would work:
1. I register a SEZ or LLC in Caymans or Mainland UAE company, then register a WY/DE/NM LLC owned by the SEZ/KY LLC/Mainland company. That LLC holds the ownership interests, and the rest (assets/IP) is owned by the parent, which would be the SEZ/KY LLC/Mainland. The LLC would receive a license to use, and re-license the software appropriately including collecting fees, the parent company would invoice for the license fees, the LLC would turn a reasonable operating profit but not significant. This would mean on the surface, everyone is doing business with a US company, even if it's owned by another corporation.
2. I do similar to the above, but for the parent company I either us an LLC or similar as the parent, or use a European company (eg, NL) to hold my interests, with the child company being the foreign entity. On the surface, they're materially similar.
My questions really are:
1. Does this approach make viable sense?
2. Is it better to have an 'onshore' company (eg, US LLC, ON/BC LP, etc) hold the direct interest in businesses and receive the license rights, while the 'offshore' one holds the ultimate ownership?
3. Is there anything I should be mindful of that I didn't cover here? Ultimately, if there is a banking issue with the parent company, I could use the direct company (eg, US LLC) to receive fiat, convert to crypto and transfer to the parent company, from there I'd invoice as appropriate to pay myself, paying taxes as a self-employed business owner/contractor (whatever is the better one tax-wise).
4. I'm aware of CFC/FAPI rules, and right now FAPI would not apply as it wouldn't be deemed passive income. It would be work performed ('services rendered'), which is active income and under FAPI wouldn't become a tax resident as far as I've spoken to accountants here. This might change when I move, but that's a bridge I'll cross when it comes to it.
5. Is there a better route to achieve what I'm after?
I'm looking for a bit of feedback and/or guidance in order to best protect a few things, namely:
1. Physical assets (equipment/machines);
2. Intellectual property (digital/code);
3. Ownership Interest in business(es);
For all purposes, the companies which I want to protect ownership interest in are US-based (C-Corp, LLCs). The intellectual property is all code, belonging to me in a personal capacity but will soon be licensed to be used by businesses. There is a significant amount of equipment/machines that are physical assets (mainly within US, Canada, NL, NZ) that I'd like to protect as well. I understand that the physical assets are more a law of the country versus a law of the owners jurisdiction, but, nevertheless I want to bundle them all up in a protected structure.
I have no real threat model that someone would attack my interest in them or rights, it's more to just shield myself (future proofing planning), and to add a layer of privacy. My geographical region is Canada currently, I intend to re-locate to Europe (Ireland) or UAE (Dubai / Abu Dhabi) in the next 1-2 years. I'm not 100% set on where I'll be relocating to as of yet.
I've spoken with Sinclairs law firm on Grand Cayman, I spoke with CEC as well as some others in the Caymans, they all said that it's a great region for protecting assets, property and ownership interest, but banking would be nearly impossible, so any dividends/distributions would be difficult to do (except, of course, if distributed using crypto but that opens a whole new set of potential issues).
I spoke with Flag Theory who provided some more (than I already knew) insight in Seychelles, Nevis and some other regions. I was fairly impressed in their rundown, but again they gave me a "SVG would work, BVI would work, Caymans would work, ... would work, etc", in effect any region would work but not overall helpful. So I did a lot more research and I've dug into two ideas, and please let me know if I'm off base, or if this would work:
1. I register a SEZ or LLC in Caymans or Mainland UAE company, then register a WY/DE/NM LLC owned by the SEZ/KY LLC/Mainland company. That LLC holds the ownership interests, and the rest (assets/IP) is owned by the parent, which would be the SEZ/KY LLC/Mainland. The LLC would receive a license to use, and re-license the software appropriately including collecting fees, the parent company would invoice for the license fees, the LLC would turn a reasonable operating profit but not significant. This would mean on the surface, everyone is doing business with a US company, even if it's owned by another corporation.
2. I do similar to the above, but for the parent company I either us an LLC or similar as the parent, or use a European company (eg, NL) to hold my interests, with the child company being the foreign entity. On the surface, they're materially similar.
My questions really are:
1. Does this approach make viable sense?
2. Is it better to have an 'onshore' company (eg, US LLC, ON/BC LP, etc) hold the direct interest in businesses and receive the license rights, while the 'offshore' one holds the ultimate ownership?
3. Is there anything I should be mindful of that I didn't cover here? Ultimately, if there is a banking issue with the parent company, I could use the direct company (eg, US LLC) to receive fiat, convert to crypto and transfer to the parent company, from there I'd invoice as appropriate to pay myself, paying taxes as a self-employed business owner/contractor (whatever is the better one tax-wise).
4. I'm aware of CFC/FAPI rules, and right now FAPI would not apply as it wouldn't be deemed passive income. It would be work performed ('services rendered'), which is active income and under FAPI wouldn't become a tax resident as far as I've spoken to accountants here. This might change when I move, but that's a bridge I'll cross when it comes to it.
5. Is there a better route to achieve what I'm after?
