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two questions about TIEAs and Offshore banking

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dpastco

Advance Member
Jun 11, 2013
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#1
Hey Guys,


i am currently in the process of setting a (rather simple) offshore company. Given what I read here Seychelles is the way to go (for incooperation) but better not for banking. I will be needing an offshore merchant account solution also.


I am still deciding between Belize and Seychelles and my first question evolves around the TIEAs.


Lets say there is a TIEA between Uruguay and Belize, does this cover only citizens of Uruguay? So would Belize only answer requests for Uruguayan citizens, or all requests based on this treaty. Secondly, is it based on citizenship or country of residence? So I am an U citizen but live in Panama, would Belize still need to provide the information? I tried to read through the treaty but got lost.


My second question evolves around offshore banking. For opening any bank account I need to declare myself, provide all information to the bank. But in reality this bank account is a company bank account, so it should be in the name of the company. What information does the bank provide (when it is obliged to), the name of the company who "owns" this bank account, or the person behind it?


Maybe as last one, a lot of incooperation companies have payment setup via credit-card/bankwire, isnt that stupid? it leaves the electronic trail right from the start. While there is a black box in between, are there better ways?


I hope i didnt miss out on anything which would be avilable by search, its my first company so lots of questions and information gathering.


thanks a lot
 
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#2
dpastco said:
HLets say there is a TIEA between Uruguay and Belize, does this cover only citizens of Uruguay? So would Belize only answer requests for Uruguayan citizens, or all requests based on this treaty. Secondly, is it based on citizenship or country of residence? So I am an U citizen but live in Panama, would Belize still need to provide the information? I tried to read through the treaty but got lost.
Click to expand...
These types of agreements use tax residency - not citizenship. Tax residency is usually where you live. If you travel a lot (for example, more than 50% of all days in a year), it may become more difficult to determine where you are tax resident.

dpastco said:
My second question evolves around offshore banking. For opening any bank account I need to declare myself, provide all information to the bank. But in reality this bank account is a company bank account, so it should be in the name of the company. What information does the bank provide (when it is obliged to), the name of the company who "owns" this bank account, or the person behind it?
Click to expand...
Banks must know who the ultimate beneficial owner of a company is when a company account is opened. Your name will not appear in any bankwires in and out of the bank, but the bank will have your name on record.

dpastco said:
Maybe as last one, a lot of incooperation companies have payment setup via credit-card/bankwire, isnt that stupid? it leaves the electronic trail right from the start. While there is a black box in between, are there better ways?
Click to expand...
A handful of providers accept payments in PayPal and/or Western Union and some resellers accept virtual currencies like BitCoins and the recently shutdown Liberty Reserve. You don't have many reliable options aside from card and bankwire.
 
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#3
What do you mean by the first one, i know that taxes are based on "tax residency" with various ways of honoring taxes payed outside), but what does that mean for the countries involved of the TIEA. Does the requesting country need to proof the tax residency or does the data providing country need to provide the data in any case (and is it for citizens of that state, for residents of that state)? Its hard for both sides to judge this really, especialle since the requesting country will most likely always assume that tax residency is the case, otherwise it wouldnt be taxable anyhow (or limted, well, if you are not a US citizen at least).


Regarding the bank account, yes, that its not on any transaction is clear. My question was based in case the bank is ordered to release the details of this bank account. While I would be the beneficiary of the company, the account itself is "owned" by the company. So do they release just the companie's name or the real beneficiary behind it? (if its latter, i dont see the point in having bank/company in two different jurisidictions)
 
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#4
Does the requesting country need to proof the tax residency or does the data providing country need to provide the data in any case (and is it for citizens of that state, for residents of that state)?
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Actually, it differs from country to country how they handle such cases. Most often it is you that need to proof the company, director etc. are resident of the offshore jurisdiction and not managed and controlled locally.
 
#7
If we can proof management to be in the offshore jurisdiction no TIEA apply??? Though it was DTT (double tax treaty) that apply..
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It's actually mandatory to have the control and management to be situated in Cyprus in order to get an approval from the tax authorities in your local country without to know the tax policy and regulations there.
 
#8
It's actually mandatory to have the control and management to be situated in Cyprus in order to get an approval from the tax authorities in your local country without to know the tax policy and regulations there.
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Cyprus if it's a Cyprus company otherwise the management and control must be in the jurisdiction / country of where the company is incorporated correct?
 
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