Source of funds question

[andrew28fl]

Hello,

Lurker here, first post, so hope I am not breaking any rules.

1. I am a Canadian citizen, non-resident of Canada. So I don't have any tax liabilities with my country of Citizenship.
2. I am a resident of Tbilisi, Georgia, which has a territorial tax system. Georgia doesn't care about or tax me on my income from sources outside of Georgia.

I have been getting by with a US Single Member LLC (Wyoming) and living tax free. Now I have started handling much bigger projects and I am looking to setup an Offshore entity (say a Seychelles LLC) and a Bank account (say Cyprus or Panama). My actual question is not about the specific jurisdictions though.

I provide miscellaneous IT related services to my clients, some of which are themselves Offshore entities. Some of these clients would prefer to pay me using money drafts or direct cash deposits into my offshore entity's bank account. The problem is they don't want to receive an invoice from me, and they don't want to have any paper trail going back to them from these payments.

With my specific situation, where neither my country of Citizenship or country of Residency is concerned with my foreign sourced income, what do I need to worry about if I can't explain the source of funds for some the payments I receive? If I am not required to file taxes or maintain accounts, do you see this being a problem with any jurisdiction (whether the country of offshore entity formation, or the country of banking)?

Thank you in advance for your time!

 

[GrumpyMess]

2. I am a resident of Tbilisi, Georgia, which has a territorial tax system. Georgia doesn't care about or tax me on my income from sources outside of Georgia.

Have you clarified this with a tax office or Georgian lawyers?

do you see this being a problem with any jurisdiction (whether the country of offshore entity formation, or the country of banking)?

It highly depends on amounts and your bank. If this money make up only a small part of your receipts on an account you're probably safe, however you'd better have a supporting documentation.

 

[Martin Everson]

The problem is they don't want to receive an invoice from me, and they don't want to have any paper trail going back to them from these payments.

Really? Avoid such clients

what do I need to worry about if I can't explain the source of funds for some the payments I receive?

Money laundering

If I am not required to file taxes or maintain accounts, do you see this being a problem with any jurisdiction (whether the country of offshore entity formation, or the country of banking)?

Problem is with bank that receives money unless you found a shady bank that allows undocumented money ALL of the time.

 

[andrew28fl]

Really? Avoid such clients

Money laundering

Fair enough. I think the clients main concern was to have a trail go back to them. I guess there is no way around this, so either will have to let go of some of this work, or insist on invoicing.

 

[andrew28fl]

Have you clarified this with a tax office or Georgian lawyers?

Yes, I have. Any particular part of my setup seems concerning? Territorial tax system is commonly used, where a person can establish residency and avoid taxation for income sourced outside the country or residency. This setup is not available to US citizens but others like Canadians, Brits have been doing this for a while.

 

[GrumpyMess]

Any particular part of my setup seems concerning?

Just the fact that without a source of funds documentation you can't prove that income has been earned out of the country.

 

[Martin Everson]

Fair enough. I think the clients main concern was to have a trail go back to them. I guess there is no way around this, so either will have to let go of some of this work, or insist on invoicing.

Just use an alternative non-bank way for them to pay you.

 

[NicolasMaduro]

I don´t get it. If they don´t want any paper trail, why are they even paying with bank transfers? Why not gold bars, cash or bitcoin?

 

[andrew28fl]

I don´t get it. If they don´t want any paper trail, why are they even paying with bank transfers? Why not gold bars, cash or bitcoin?

We are physically not in the same country, so gold and cash is hard to manage. Bitcoin, something to look into, but I think I would run into the same issues past a certain limit.

 

[JohnLocke]

Hi, I am a lawyer in Canada and I am looking for a friend in Georgia possibly to act as a personal representative . Maybe we could become business partners. Happy to help you in exchange etc..

You may open a new thread to ask for partnership or you check out the forum to find consultants from Georgia.

The short way is ofcourse the mentor group and the resource section https://www.offshorecorptalk.com/resources/ where you can find what you are looking for.