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Off Shore Company Solution if Business Activity is Illegal in Resident Country

K

Keefington

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Dec 20, 2024
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#1
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Hey OCT,

If a business activity is illegal in Country A (resident country) but perfectly legal in Country B (offshore jurisdiction) will I be removed of liability?

For example if the sale and advertisement of Coffee was illegal in Country A could I incorporate in Country B and sell products through this offshore jurisdiction. All stock would be held in the offshore jurisdiction but products would be advertised and shipped to Country A (assume no customs issue).

What are the chances of the corporate veil being pierced and being prosecuted myself in this case?

Can someone point me in the direction of legal advice/consulting that would be helpful in this case?
 
#2
Its possible to work. However the type of business you do is important in assessing whether any of those illegal elements of the business could spill into your jurisdiction of residence. Analysing the business operation in conjunction with the law is paramount.
 
#3
#8
daniels27 said:
Temu has had good success with this. You can do it for a couple of months and if you have no connection to the country where it is illegal. Just beware that you may face criminal charges when you enter the country, depending on what and how it is.

https://www.nzz.ch/wirtschaft/weihn...orteurin-illegaler-waffen-mutierte-ld.1858355
In this case, nothing happened.

In other cases, which are more serious, you may face charges as a sender.

I would probably advise against doing it when you are living in the country you are shipping to.

Do you maybe have more details about the goods and the country?
Click to expand...
Thanks for the reply.
Nicotine pouches shipped to Australia.
Therapeutic Goods Administration website on these products: https://www.tga.gov.au/products/unapproved-therapeutic-goods/vaping-hub/nicotine-pouches
All stock would be shipped from Sweden in a completely legal way.
 
#9
I think in this case, the safest is to set up a company somewhere and ship those goods from Sweden to Australia. I would ensure that it does not look like you deliberately try to sell it illegally to Autralia. You just ship anywhere and Australia is your biggest customer base.

The goods are not illegal per se, it just cannot be imported that directly and not without prescription. As long as they cannot claim that you deliverbately were targeting Australian customers, I would not see too much issues. Of course, it is not a truely sustainable business that is legal. But you may get along with it for at least some time.

But what about GST? If you ship goods to Australia, you need to register for GST if you ship low amount shipments. If you do not do this, they have something they can hold you liable for not doing it. And if you do register, you must disclose a lot of company details and your offshore construct may be busted and your personal details revealed. If you live in Australia, they may approach you if they find out you deliverarely were running this business to circumvent their rules.
 
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