requires the guy to relocate to Panama. I don't know with him, but for me not an option. Is there a better place to move to ?
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Setting Up an Anonymous, Low-Cost Tax-Free Company Globally in 2024 with Minimal Compliance Requirements?
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exactly setup in Switzerland a few years ago, all my income and wealth is taxed, never regret to have made the decision, finally I have fully legal money with SoF which I can invest in whatever I want.
great explanation - really something useful to read for people still living in 2010Those are increasingly outmoded requirements. If you keep holding on to the past, the present won't wait for you, and then the future will hit you like a bag of bricks to the face.
Don't start a business if you can't afford accounting or other basic things.
It costs very little and it can help you in many ways (banking, PSPs, taxes). What are you doing running a business if you can't even budget some basic paperwork to be done for it?
I can understand pushing back against audits, but just pure, simple, basic accounting...
Raise money if you need to in order to meet your business needs. Friends and family. Bank loans. Angel investors. Seed investors. VC/PE. You have the drive — go out and find them. OPM is great. Just pay them back and give them value.
Don't start a foreign company if you can't afford to meet substance requirements.
Very few jurisdictions haven't implemented substance requirements yet (for example Samoa), but they are a dying breed. OECD comes for all.
The degree of substance requirements vary but don't look at the relaxed requirement in jurisdiction X today and expect them to stay that way. Be smart. Look at what's going on and deduce what the next move is going to be. Prepare for that. Monitor the situation.
Don't commit tax fraud/tax evasion.
This includes VAT fraud in EU/EEA/UK.
Without a doubt the dumbest crimes you can commit, because the burden of proof is often reversed. You'll probably end up paying the tax you should have, and more in penalties and loss of opportunities.
This brings us to...
Residence is key.
If you don't like the taxes where you live, don't live there. I swear there is pure tax-brain-rot in the Spanish tap water.
Go live somewhere else. The world is big and you can find different tax incentives all over the world.
The Perpetual Traveller dream is just that: a dream. I can't deny there are people out there who do it. But it's getting harder. More and more are opting for genuine, bonafide tax residence somewhere.
Be OK with paying more than zero tax.
It's possible (see 0% tax for digital nomad achievable?), but to a lot of people, simply paying less tax leads to a better quality of life than striving for zero tax.
Paying even just a modicum of tax gives an air of legitimacy that can helpful.
Banking secrecy is dead.
Banking secrecy is gone. You can run around the world chasing non-CRS territories but they are running out, and the last ones standing are going to be places you probably don't want to put your money anyway.
Establish your residence and business in such a way that secrecy is a non-issue.
Corporate secrecy is dying.
Forget anonymity. Instead, understand what is public, what is limited, and what is private.
Public = anyone can view.
Limited = some information is public, some is limited (to law enforcement, to media with good cause, to government).
Private = only you and the government know.
Consider that data leaks, both from service providers/lawyers and from corporate registers themselves.
Use nominees cleverly and carefully.
Asset protection is alive.
Don't buy off-the-shelf solutions. Get something bespoke, set up with the help of people who understand all applicable laws and risks. Don't google "cheap cook islands trust fast instant setup i'm being sued". Plan ahead. Understand your risks. Be realistic.
Good asset protection usually doesn't rely on secrecy (see previous two points).
Pay peanuts, get monkeys.
There are times in life when monkeys are great. They can be great companions at your jungle villa in Costa Rica or fun to encounter in the wild or just walking around Gibraltar or Singapore.
What they are not good for is setting up companies, opening bank accounts, and tax planning.
Just like you don't sell your own time and skills for cheap, neither should you expect others to. Experience costs.
Don't get ripped off, though. Perform due diligence on service providers. And explain your scope to them clearly. Even a good, trustworthy lawyer can go above and beyond racking up billable hours if you don't tell them exactly what to do (ideally agree on pricing in advance).
Paralysis by analysis.
I see so many OCT users fall for this.
Are you entrepreneurs or wannapreneurs?
Asking questions, doing research, and analysing options are good things that you should be doing.
But too often I see people get stuck in hypotheticals and — by the looks of it — getting nowhere, instead worrying about to cash out their 6 trillion USD in crypto using their Cambodian passport while residing in Paraguay. In reality, the business is either non-existent or just puttering by.
Grow your business.
This is probably the most important part. If you have a business that's doing well, focus on growing it if you can continue to scale it up.
Don't take your 500,000 USD/year business offshore just to save on taxes. You probably can't save on taxes (legally) and even if you do, I'd bet the costs of doing so aren't that much different from the costs of paying tax.
Instead, grow your business. Get it big enough that going international starts making sense, factoring in all the costs and complexities thereof.
KYC: Banks are banks are banks.
View attachment 5980
— Look at all those ducks and what a nice row they form! #inspirational
This comes back to basic accounting. Companies with basic accounting don't struggle with showing invoices and agreements when banks ask.
If you want to use fiat money, you have to play by the fiat money rules. This means SOF (Source of Funds) and SOW (Source of Wealth) checks and disclosure.
Keep all statements, invoices, agreements, receipts. Maintain fresh bank statements and utility bills/proof of address. File your taxes. Keep copies of the returns. Store it all safely and redundantly.
Things are tough already and will only get tougher. Be prepared for that.
The End
That doesn't give you much secrecy though? CRS, information exchange through the OECD Convention and other tax information exchange agreements?
Does that mean, they should care but they Don't? So it is just a matter of time?
As far as I know, Panama got PE rules. Does that mean the US LLC should be taxed in Panama according to the law?
In other words, you just hope that Panama continues to not care? What happens the day they change their opinion? Tax due for the past 5 years and other penalties/charges?
What makes you think that this would be an eventuality?
Panama is one of the few countries worldwide that have positioned itself as the offshore business center.
It was Panama Papers, not UAE papers.
Panama means “offshore” since at least 50 years.
It will continue to be perceived as the place to go for anything offshore.
I think the argument here is that Panama does not really comply with all the regulations and laws, but it is kind of hype around it right now. For some reason, people believe Panama is the only country that is not complying. But I think these people are up for a surprise in the future because things change
US isn't part of CRS so there's no automatic exchange of information.
They are part of FACTA which is mainly unidirectional information gathering of US citizen's assets outside of US.
I don't get the logic behind "they don't care now so it's just a matter of time?"
Panama is part of CRS and comply with OECD regulations so why it's just a matter of time?
Technically managing a US LLC from Panama could be considered having a fixed place of business in Panama but unless you do business with locals how do you think they will be able to identify a solopreneur operating a shopify store from his laptop or a consultant doing zoom calls?
There is no automatic exchange of information but they have other tax information sharing agreements where they share on request.
However, my point was not regarding the US but that Panama is part of CRS etc.
This is interesting in itself and I will need to think about it! I always thought it was a matter of time until Panama starts using the PE rules but this actually turns to the question of how it is proved. I guess there would need to be some kind of government operation. The only way is probably surveillance? Can they use your place of registered address as an argument that this is where you live and carry out your business interests?
If you do business through a US LLC and have a US bank account like Mercury there will not be any automatic exchange of informations from US to Panama because US isn't part of CRS.
If you don't do anything extremely wrong and you don't do any business with locals nobody will surveil because they don't have any reason to do so.
Surveillance costs money and time
Every tax agency has limited resources so unless you go around with a t-shirt that says "i'm evading taxes in Panama" on your neon green Lambo in front of the Panama tax agency, they will not be interested in you.
Are you Shakira that you are so worried?
As a non US resident you may not get reported under FATCA right? I mean if you setup a company in the US as an foreigner.
That is a question I have also been pondering. Also, what happens if you get an ITIN and declare a UAE Address. Will FATCA share information with your passport country (Where you are not living) or UAE?
Did you actually read what FATCA is?
The Foreign Account Tax Compliance Act (FATCA) requires that foreign financial Institutions and certain other non-financial foreign entities report on the foreign assets held by their U.S. account holders.
https://www.irs.gov/businesses/corporations/foreign-account-tax-compliance-act-fatca
The first letter of FATCA is FOREIGN
They do not care about non resident US assets, they care about US tax residents FOREIGN assets.
The Foreign Account Tax Compliance Act (FATCA) requires that foreign financial Institutions and certain other non-financial foreign entities report on the foreign assets held by their U.S. account holders.
https://www.irs.gov/businesses/corporations/foreign-account-tax-compliance-act-fatca
The first letter of FATCA is FOREIGN
They do not care about non resident US assets, they care about US tax residents FOREIGN assets.
So does it mean if you manage as a n EU citizen to keep the tax office unknown to your panama setup there will be no reporting and you can forget about it?
Russia may be better right, there is no information exchange at all between Russia and the rest of the world.
Russia may be better right, there is no information exchange at all between Russia and the rest of the world.
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