Offshore tax planning regarding digital property

[Nafali]

I have developed a software that I plan to own through an offshore company, as intellectual property, located somewhere with a favorable corporation tax. Clients using the software will pay a monthly fee and they will strictly be based in the US (and the software will strictly be used in the US). Monthly fees may be paid in cryptocurrency if favorable for me.

I plan to either host the software on servers in the US rented by the offshore company or allow the customers to host the software themselves (thus the company is 100% self-sufficient by only owning intellectual property and receive monthly payments). But I was thinking it could perhaps be beneficial to own assets through the offshore company to prove permanent establishment in the US if I form a Delaware LLC for example (virtual office and rented servers etc)? I then plan to receive dividends from the offshore company and thus pay lower taxes in relation to what I would pay if I setup the company in my EU country. Am I correct?

The software is also modular-based which means the clients can have addons created (by themselves or hiring coders) that the software then uses. The addons are independent in relation to the offshore company and are in no way directly related. If the clients choose to they can hire me or other private contractors to create these modules/addons for them. The offshore company does not create the addons so the permanent establishment can not be in my residential EU country if I were to be hired as a private contractor to create these addons.

Does this sound feasible and like a good setup? Thank you in advance.

 

[TurnedToRobot]

Do you spoke to a US tax advisor. When I just write what I think right now, so I will come to the conclusion that the USA must have entities to hold IP rights at no or very low tax.

Second thought would be to hold the IP rights in Seychelles or Belize and open a crypto account at kraken for it. Get paid in BTC only and use the kraken account to transfer the money to the Seychelles or Belize business account. so it is tax free. Alternatives which are more expensive are Malta and Cyprus.

 

[Nafali]

Do you spoke to a US tax advisor. When I just write what I think right now, so I will come to the conclusion that the USA must have entities to hold IP rights at no or very low tax.

Second thought would be to hold the IP rights in Seychelles or Belize and open a crypto account at kraken for it. Get paid in BTC only and use the kraken account to transfer the money to the Seychelles or Belize business account. so it is tax free. Alternatives which are more expensive are Malta and Cyprus.

Thank you for the response, I will look into both Seychelles and Belize.
I have looked into Cyprus and it seems like an attractive location since the IP tax will be 2.5% for royalty profits.

My primary worry is that my EU country will "CFC-tax" me because they claim my real establishment is in my country even though I am not doing any work actively for the offshore company.
I presume purchasing a virtual office and nominee director will counteract this? Or maybe that is not required.

 

[TurnedToRobot]

I have looked into Cyprus and it seems like an attractive location since the IP tax will be 2.5% for royalty profits.

true there are lots of such companies in Cyprus.

I presume purchasing a virtual office and nominee director will counteract this?

that's minimum. If you have the money you want to rent a real office and some sort of staff so you can proof management and control to be in Cyprus.

 

[Nafali]

true there are lots of such companies in Cyprus.


that's minimum. If you have the money you want to rent a real office and some sort of staff so you can proof management and control to be in Cyprus.

That is recommended even for IP holding? Money is not an issue so I am looking into all possibilities.
I do not plan to do any work. Own the IP to the software and receive royalty payments, that's it.

I really appreciate your input by the way.