Expert advice needed!

[amrabushullaih]

Hello,


I'm new to offshore incorporation and have some questions and need some help. Here is the situation, I am a US citizen however I live in Egypt and never lived in the US or even visted and not planning on visting it soon, also never filed any tax reports. I'm starting an export and import business were I supply Commodities (Rice, Cotton, Wheat, Crude Oil, Coal, etc.) on a global basis. Our business model will be based on being the middleman and taking our commission. My dealings will be with reputable suppliers, so I require an offshore jurisdiction that can offer me the ability to deal with top suppliers without looking shady.


I'm considering a BVI company because it's british territory and I want to bank in London, UK (I wont be visiting london soon, is it possible to open an account remotely?) The reason is I visit London every once in a while and it being near Egypt makes it's logistically more efficient to have an account there if needed to visit the bank, than having it offshore also I'm renting a virtual office space in London as I think it will look reputable to have an office there when dealing with suppliers and customers.


Will I be pursued by the US governmet to pay taxes if I open an account in the UK? Is BVI a good choice to be able to bank in the UK?


Thanks for your help in advance

 

[Zqq]

My dealings will be with reputable suppliers, so I require an offshore jurisdiction that can offer me the ability to deal with top suppliers without looking shady.

I understand how you, due to the current political instability of Egypt, may want to seek a foreign entity as your company. However, BVI and other IBC jurisdictions are not considered reputable. It is true that established companies use BVI, Bahamas, and other offshore jurisdictions to do business with other companies but this is difficult to do as a new brand with no established trust and relationships.


For your business idea and considering your location, a Dubai, RAK, or other UAE free port company would make sense. Zero taxation, lax if any controls on imports and exports, and very easy to do business in. Other options could be Hong Kong and Singapore. A lot of import/export companies are registered there.

I'm renting a virtual office space in London as I think it will look reputable to have an office there when dealing with suppliers and customers.

I don't know where this whole idea of virtual offices being something good came from. They are not. Virtual offices are frowned upon greatly by established companies and financial institutions.


Basic due diligence of your company would reveal that you are using a virtual office. You might even share address with fraudsters or criminals. Your potential business partner, lender, or investor would then have to ask themselves why and from what you are hiding.

Will I be pursued by the US governmet to pay taxes if I open an account in the UK?

In order to be FATCA compliant, the UK bank will report all your income to the IRS.

Is BVI a good choice to be able to bank in the UK?

Not really, but it is easier - though not easy - to get a UK bank account with entities in UK territories.


Import/export and shipping companies often use specialized banks, such as The Bank of Tokyo-Mitsubishi UFJ, Ltd.

 

[amrabushullaih]

Thank you Zqq for your tremendous insight. Yes, the political and economical situation in Egypt is bad so I had to find another option even though I have a company incorporated here.


The problem is incorporating a company in the countries you listed is priced really high for me at the moment, and also I read that opening a bank account in HongKong requires me to be there (is this right?) so what are the other next cheaper options?


Let's say I incorporate in BVI, which countries (preferably european) can I open a bank account that is "onshore" and will not report my income to the IRS or have a problem with the company being a BVI entity? Also, is it possible to open a bank account in the Dubai without being reported to the IRS?


Sorry for asking alot of questions, as I am new to all this.

 

[Zqq]

The problem is incorporating a company in the countries you listed is priced really high for me at the moment

It's important to compare the short-term costs with the long-term benefits. There is no easy answer here.

and also I read that opening a bank account in HongKong requires me to be there (is this right?)

There are ways to open bank account in Hong Kong without visiting Hong Kong, if you for example use nominee directors for the company.

so what are the other next cheaper options?

If you all you care about is price, you probably can't find anything cheaper than a Belize or Seychelles IBC with a bank account in Belize, Mauritius, Latvia, or Cyprus. BVI tends to cost a little bit more than Belize and Seychelles.

Let's say I incorporate in BVI, which countries (preferably european) can I open a bank account that is "onshore" and will not report my income to the IRS or have a problem with the company being a BVI entity?

There are quite a few. Cyprus, Malta, Latvia, Switzerland, and Liechtenstein are among the most popular in Europe.

Also, is it possible to open a bank account in the Dubai without being reported to the IRS?

That depends on how the bank chooses to comply with FATCA in your case, but the way banks are currently assessing FATCA would mean that assets held in your own name would be reported to the IRS. A corporate bank account would (probably) not fall under FATCA for a non-resident.