Why risk offshore? Just pay some taxes

[hernanday]

I agree as I am in the same boat. My main concern is privacy and asset protection. I am still paying the same tax as everything is declared in my tax return. However, I am feeling safer that no ambulance chaser lawyer can trace my asset nor get any local jurisdiction order to reach my assets abroad.

I'm not sure how much of either you can get to be honest.
If a ambulance chaser lawyer sues you, he will subpoena your tax documents because he will assume you can pay more than you claim.
If everything is declared on your tax returns, guess who now knows where all your assets are, all your overseas accounts?

 

[JohnLocke]

If everything is declared on your tax returns, guess who now knows where all your assets are, all your overseas accounts?

That's actually some very good key information most won't have thought about already! Thanks for pointing that out for all of us.

So, for optimal asset protection you better use your wife and her name for any offshore setup or you find a middleman that will be the UBO of that structure which again can be risky. On the other hand, if it is a close family member or someone you can control it may be less risky compared to the benefit.

 

[hernanday]

That's actually some very good key information most won't have thought about already! Thanks for pointing that out for all of us.

So, for optimal asset protection you better use your wife and her name for any offshore setup or you find a middleman that will be the UBO of that structure which again can be risky. On the other hand, if it is a close family member or someone you can control it may be less risky compared to the benefit.

From what I've read the international trust seem to work. The lawyers know they can't crack them in many jurisdictions, especially if they are structured in certain ways. So sometimes will try to settle for tiny amounts or withdraw the case. If they are super aggressive, though, it could be time to leave the country. As they know they can't crack the trust, but they can use the judge to try to crack you with orders to repatriate/disclose funds/information and orders to the trustee and phone calls telling them to send the money, etc.

The wife loophole is common enough lawyers ask if you basically gave away money to them or hid it there. Plus many people file taxes jointly with their spouse. If we are talking about millions of dollars and the plaintiff has the money, the lawyer will gladly hound anyone in your social circle from your friends, wife, kids, parents, grand mother, etc. with subpoenas and examinations.

Even if you trust your friend, kid, parent, wife, do you trust them enough that they won't crack under a 5-10 hour examination from a skilled attorney? Even if they present evidence that suggest the person has a bunch of money registered in their name? I've seen people crack with very little evidence and simply assume they were caught and give up everything.

If I had to construct the perfect structure, you'd basically leave your country, obtain a 2nd citizenship in a low/no tax jurisdiction. Run your business as a non-resident servicing the high tax country clients. At least this way you will not be made to disclose all your trust income/assets in the haven to the taxman who will hand it over to any lawyer who subpoenas it. The worse part is when they subpoena these documents they won't even tell you and they'll be sitting there looking at your tax return, with all your trust information (income) disclosed, and then they'll ask you a question like "Are you sure your income is only $120k a year" "Are you as sure that your income is 120k as you are as sure you didn't (Insert bad thing you are sued for here)" Then they know they got you. If you tell the truth, they'll get you, if you lie, they'll get you infront of the judge.

The real problem is that if you lose a case, it is not really the lawyer coming after you, it is the judge, the sheriffs office, etc. It is the Sheriff's office who will be seizing your account, it is the sheriff office who will be searching your house for valuable to sell. So the trick is to be able to stay out of reach of them in the event you lose.

If I had to pick an asset protection structure where you stay in your high tax nation, I'd say, use foundations/non-profits like "Scientology" and add on some international trusts. This varies by jurisdiction, but in many jurisidictions, the foundations/non-profits don't have shares or members. Simply directors on paper and managers who may or may not be on paper. Be a manager who simply controls the bank debit cards and get the power of attorney documents to open the accounts without the directors present. Your directors don't even know where you bank so can't really cheat you. Foundations often times don't even pay taxes so there is nothing to be shared from a tax perspective that can truly give you away. The foundations money is technically all belong to the government anyways (hence why it is not taxable and there is no shares or shareholders in many high tax nations).

Even the most prying ambulance chaser would not normally ask if you are a manager in a church/foundation, but more importantly it is about proof. Even if you are, they can't really prove you intend to give yourself money from the foundation in the future, and you can just deny you will do so and claim to be a volunteer. It is hard for them to prove you are a manager somewhere overseas on a type of foundation that doesn't pay taxes normally so isn't caught up in the tax net and doesn't normally report to the high tax home nation.

You'd then essentially donate from the high tax nation foundation of scientology to Bermuda/tax free jurisdiction scientology church. Where you are also a priest/rabbi, or whatever they call their leaders over there. If you already have a judgement against you in America by this point, you really have nothing to lose by leaving if it is in the millions. I skipped a few steps, but you get the idea. Pay yourself what you please, since there are no income taxes in your new place from the Bermuda Scientology foundation and you can even effectively continue servicing your old clients with a new IBC company using a local manager from your old high tax nation, you just won't be returning there physically. The idea in essence is to make yourself judgement proof.

 

[Patrick846]

If a ambulance chaser lawyer sues you, he will subpoena your tax documents because he will assume you can pay more than you claim.
If everything is declared on your tax returns, guess who now knows where all your assets are, all your overseas accounts?

I don't believe that anyone could subpoena your tax record during the discovery phase. Once you lost your trial, then yes you will have to disclose your assets. But even then, good luck to have a judgment enforced in an offshore jurisdiction.

 

[pierino]

Thing is that for a EU Passport Holder, going outside EU and then getting back with money is never so easy... Also even outside there are some pains, 15/30% taxes, only -10 countries have no taxes but they have a lot of issues with decent countries in EU about information exhanging, CFC, etc. So I was thinkint about Potugal or Slovakia for 1 year to lower the pain..

Why isn't easy to come back with money? If you were legally residing abroad, where you earned your money, and you decide to immigrate back into EU, the law says you should move all your capital to your EU country of residence. So what problem would there be in complying with the law?

 

[hernanday]

I don't believe that anyone could subpoena your tax record during the discovery phase. Once you lost your trial, then yes you will have to disclose your assets. But even then, good luck to have a judgment enforced in an offshore jurisdiction.

Depends on the kind of case it is. If your ex-wife is suing you and claims your income is higher than it is for purposes of alimony/child support, and the other side decides to make it a bone of contention or basically raises the idea you are lying about your income the judge will typically allow them to subpoena pretty much any document related to you.

How is a judge going to make an order for alimony/child support without even knowing your income? Why would the ambulance chasing lawyer believe you properly disclosed your income when defendants generally under report in this process? A common tactic would be to ask your annual income, then ask your monthly income, then ask your bi-weekly income, then he'll ask if you had any other income or sources of revenues or assets. Typically people modify their answer because none of us are human calculators. They will claim you either hesitated or added the numbers inconsistently and they need to find the "Real answer".

Even if their claim is bogus, judges are typically pro-prosecution/plaintiff, so they are going to be inclined to give them whatever subpoena order they need to help prove their claim. All the other side has to do, is basically ask you any financial/income related question (which any ambulance chaser will do) and then accuse you of lying under oath (with no evidence as they normally do). They then go to the judge and say I need his tax records to prove he is lying about his income and that is relevant because if he lied about his income, he could be lying about other key facts of the case.

Anyone who sues you can subpoena your tax record, they'd just have to deliver the document to the tax authorities. It is likely the tax authorities would comply (without the actual order) because again, this is going through lawyers who are pro-prosecution/plaintiff and generally seek to exchange evidence of 3rd parties unless they think there are specific laws against doing so. Of course you could fight it. But often times lawyers will confirm or deny over the phone the figure.

https://www.npr.org/2019/11/15/7799...t-to-block-house-subpoena-for-his-tax-recordsBasically the house and a ny prosecutor successfully subpoenaed Trump's returns and he is trying to fight it through higher level courts and executive orders. These are at the START of the cases, nothing has even been proven against him.

But lets say I'm wrong on this point. We both agree the lawyer can get your tax return in the debtors examination right. And this occurs after you lose your case. If you win your case and never had to give your tax return it made no difference because the other side never had a chance to get at your assets anyways.

The idea that the lawyer is going to try to chase down your foreign assets is obscure to me. Once the case enters this phase it is not the lawyer you worry about, it is the judge who uses the local sheriff office to get compliance. The judge will order you to repatriate the assets to satisfy the judgements. If you do not do that = contempt order and you sit in jail for 10 years on a contempt charge that cannot be appealed. If you can do 10 years in prison and not get additional contempt charges, you might come unscathed financially if you don't get murdered in prison. Of course one could hypothetically use the order as a time to flee sign. And you better have a 2nd passport because judges can seize them, cancel them, order you to not leave the country, etc.

But I'd rather simply figure a way to legally not report assets I have access to so I don't have to deal with that potential headache.

 

[hernanday]

Why isn't easy to come back with money? If you were legally residing abroad, where you earned your money, and you decide to immigrate back into EU, the law says you should move all your capital to your EU country of residence. So what problem would there be in complying with the law?

eu blacklist = eu banks told to give you a hard time in sending your money that gone through a blacklist (low tax) nation.
I think another poster implied that some European countries make it a crime to basically have large amounts of cash. But I am interested in the answer to this question from people in europe.

 

[exprtadvisrdev]

It's funny to me read sentences like "how can you live in Panama" or "they are in the s**t hole"... I mean, I was born in the hell (Venezuela) and I grew up in one of the most dangerous cities in the world. I have visited some South American countries like Panama, Argentina, Chile and Colombia and Panama is by far the safest place I have visited because is like many places: there are bad and good areas but with lot of rich foreigners...

But, some people that choose to go offshore not only do it for tax savings. For example I went offshore just to avoid paying an accountant, also I don't need to pay social expenses or state obligations; I still need to pay my taxes but I reduced the percentage by almost 15%. Some of us choose to go offshore and reduce the amount of taxes because we want to give less to a corrupted government, we don't want to fund a useless retire plan, etc.

And of course sometimes we just go offshore for fun just to learn something new. I think that once you like to do this kind of stuff then you forget about saving in taxes (but you also reduce the amount of it) and you only care on trying something new.

 

[iloveyouguys]

From what I've read the international trust seem to work. The lawyers know they can't crack them in many jurisdictions, especially if they are structured in certain ways. So sometimes will try to settle for tiny amounts or withdraw the case. If they are super aggressive, though, it could be time to leave the country. As they know they can't crack the trust, but they can use the judge to try to crack you with orders to repatriate/disclose funds/information and orders to the trustee and phone calls telling them to send the money, etc.

The wife loophole is common enough lawyers ask if you basically gave away money to them or hid it there. Plus many people file taxes jointly with their spouse. If we are talking about millions of dollars and the plaintiff has the money, the lawyer will gladly hound anyone in your social circle from your friends, wife, kids, parents, grand mother, etc. with subpoenas and examinations.

Even if you trust your friend, kid, parent, wife, do you trust them enough that they won't crack under a 5-10 hour examination from a skilled attorney? Even if they present evidence that suggest the person has a bunch of money registered in their name? I've seen people crack with very little evidence and simply assume they were caught and give up everything.

If I had to construct the perfect structure, you'd basically leave your country, obtain a 2nd citizenship in a low/no tax jurisdiction. Run your business as a non-resident servicing the high tax country clients. At least this way you will not be made to disclose all your trust income/assets in the haven to the taxman who will hand it over to any lawyer who subpoenas it. The worse part is when they subpoena these documents they won't even tell you and they'll be sitting there looking at your tax return, with all your trust information (income) disclosed, and then they'll ask you a question like "Are you sure your income is only $120k a year" "Are you as sure that your income is 120k as you are as sure you didn't (Insert bad thing you are sued for here)" Then they know they got you. If you tell the truth, they'll get you, if you lie, they'll get you infront of the judge.

The real problem is that if you lose a case, it is not really the lawyer coming after you, it is the judge, the sheriffs office, etc. It is the Sheriff's office who will be seizing your account, it is the sheriff office who will be searching your house for valuable to sell. So the trick is to be able to stay out of reach of them in the event you lose.

If I had to pick an asset protection structure where you stay in your high tax nation, I'd say, use foundations/non-profits like "Scientology" and add on some international trusts. This varies by jurisdiction, but in many jurisidictions, the foundations/non-profits don't have shares or members. Simply directors on paper and managers who may or may not be on paper. Be a manager who simply controls the bank debit cards and get the power of attorney documents to open the accounts without the directors present. Your directors don't even know where you bank so can't really cheat you. Foundations often times don't even pay taxes so there is nothing to be shared from a tax perspective that can truly give you away. The foundations money is technically all belong to the government anyways (hence why it is not taxable and there is no shares or shareholders in many high tax nations).

Even the most prying ambulance chaser would not normally ask if you are a manager in a church/foundation, but more importantly it is about proof. Even if you are, they can't really prove you intend to give yourself money from the foundation in the future, and you can just deny you will do so and claim to be a volunteer. It is hard for them to prove you are a manager somewhere overseas on a type of foundation that doesn't pay taxes normally so isn't caught up in the tax net and doesn't normally report to the high tax home nation.

You'd then essentially donate from the high tax nation foundation of scientology to Bermuda/tax free jurisdiction scientology church. Where you are also a priest/rabbi, or whatever they call their leaders over there. If you already have a judgement against you in America by this point, you really have nothing to lose by leaving if it is in the millions. I skipped a few steps, but you get the idea. Pay yourself what you please, since there are no income taxes in your new place from the Bermuda Scientology foundation and you can even effectively continue servicing your old clients with a new IBC company using a local manager from your old high tax nation, you just won't be returning there physically. The idea in essence is to make yourself judgement proof.

You think this strategy would work out a decade or two later?

I think most charities exist to exploit people or for wealth protection.

The problem is that requirements to set up a non-profit is difficult. It needs a lot of people e.g board of directors, complicated documentation requirements and it takes a long time be approved. Unless there's an easier way somehow?

 

[hernanday]

You think this strategy would work out a decade or two later?

I think most charities exist to exploit people or for wealth protection.

The problem is that requirements to set up a non-profit is difficult. It needs a lot of people e.g board of directors, complicated documentation requirements and it takes a long time be approved. Unless there's an easier way somehow?

I cannot predict what would/could work in a decade or two, it is literally impossible in this environment to predict anything. With a series of AML, OECD BASE erosion and profit shifting and OECD bending over backwards to basically break the ability to legally minimize taxation. In 1979, a swiss numbered bank account was basically impenetrable. Now it is subject to facta, crs sharing, AML, KYC, and there is zero bank secrecy and the next target is going to be nominee directors/shareholders and eventually elimination of tax havens. In the 1970s you could literally walk with $4 million USD in two large suitcases stuffed to the brim in cash, and book a flight on a commercial carrier to Panama or Cayman islands and the government couldn't do s**t about it. That obviously won't work today.

10 years ago the Irish loophole worked, in 2023, that loophole will be closed but new ones will open up.

The non-profit loophole will be hard to close, because it means declaring war on organized religions who are headquarted overseas but have massive holdings in other nations like the Catholics, the Anglicans, etc. Like what are they going to do, tell the Catholics they can't send money to the Pope and the Vatican anymore? Do you understand the Holy Hell that would unleash? It might just be enough to get the backlash we been waiting for.

The main problem I found was to co-ordinate a time with the bank and my 3 directors when we could all come in (they won't open your account without all 4 of you there).

It goes faster if you put the non-profit that doesn't issue tax deductible receipts for donations in your jurisdiction ie. non-profit vs charity. The charities who issue the tax receipts get far more scrutiny and take way longer.


Of course charities/foundations exist to exploit people and for wealth protection, why do you think Donald Trump had one. It was not to help people, he doesn't give a s**t about people, it was to protect himself and enrich himself. And who can blame him, everyone is only out there for themself, you, me, the government, Trump, etc. There are no altruistic people except mother Teresa, the Pope and few other religious people and half of them diddle little boys so don't count.

99% of the time you listen to these charity people talk and their motivations are all about themselves and not about the person they are helping. Most of those large charities like unicef spend more on the executive salaries and marketing than helping the poor dying people they put on tv every five minutes.

https://globalnews.ca/news/6141289/trump-foundation-charity-fine/"“I am the only person I know, perhaps the only person in history, who can give major money to charity ($19M), charge no expense, and still be attacked by all the political hacks in New York state,” he said. “No wonder why we are all leaving!” "


"The president admitted, among other things, to improperly arranging for the charity to pay $10,000 for a 6-foot portrait of him. He also agreed to pay back $11,525 in foundation funds that he spent on sports memorabilia and champagne at a charity gala. "

"Trump Foundation lawyer Alan Futerfas said the non-profit has distributed approximately $19 million over the past decade, including $8.25 million of the president’s own money, to hundreds of charitable organizations "

"Trump also admitted in the agreements to directing that $100,000 in foundation money be used to settle legal claims over an 80-foot flagpole he had built at his Mar-a-Lago resort in Palm Beach, Florida, instead of paying the expense out of his own pocket. "

"In addition, the foundation paid $158,000 to resolve a lawsuit over a prize for a hole-in-one contest at a Trump-owned golf course, and $5,000 for ads promoting Trump’s hotels in the programs for charitable events. Trump admitted these transactions were also improper. "

Its not like you go to jail if you are caught, worse case scenario you get a slap on the wrist fine like Trump did.

 

[speedster]

I cannot predict what would/could work in a decade or two, it is literally impossible in this environment to predict anything. With a series of AML, OECD BASE erosion and profit shifting and OECD bending over backwards to basically break the ability to legally minimize taxation. In 1979, a swiss numbered bank account was basically impenetrable. Now it is subject to facta, crs sharing, AML, KYC, and there is zero bank secrecy and the next target is going to be nominee directors/shareholders and eventually elimination of tax havens. In the 1970s you could literally walk with $4 million USD in two large suitcases stuffed to the brim in cash, and book a flight on a commercial carrier to Panama or Cayman islands and the government couldn't do s**t about it. That obviously won't work today.

10 years ago the Irish loophole worked, in 2023, that loophole will be closed but new ones will open up.

The non-profit loophole will be hard to close, because it means declaring war on organized religions who are headquarted overseas but have massive holdings in other nations like the Catholics, the Anglicans, etc. Like what are they going to do, tell the Catholics they can't send money to the Pope and the Vatican anymore? Do you understand the Holy Hell that would unleash? It might just be enough to get the backlash we been waiting for.

The main problem I found was to co-ordinate a time with the bank and my 3 directors when we could all come in (they won't open your account without all 4 of you there).

It goes faster if you put the non-profit that doesn't issue tax deductible receipts for donations in your jurisdiction ie. non-profit vs charity. The charities who issue the tax receipts get far more scrutiny and take way longer.


Of course charities/foundations exist to exploit people and for wealth protection, why do you think Donald Trump had one. It was not to help people, he doesn't give a s**t about people, it was to protect himself and enrich himself. And who can blame him, everyone is only out there for themself, you, me, the government, Trump, etc. There are no altruistic people except mother Teresa, the Pope and few other religious people and half of them diddle little boys so don't count.

99% of the time you listen to these charity people talk and their motivations are all about themselves and not about the person they are helping. Most of those large charities like unicef spend more on the executive salaries and marketing than helping the poor dying people they put on tv every five minutes.

https://globalnews.ca/news/6141289/trump-foundation-charity-fine/"“I am the only person I know, perhaps the only person in history, who can give major money to charity ($19M), charge no expense, and still be attacked by all the political hacks in New York state,” he said. “No wonder why we are all leaving!” "


"The president admitted, among other things, to improperly arranging for the charity to pay $10,000 for a 6-foot portrait of him. He also agreed to pay back $11,525 in foundation funds that he spent on sports memorabilia and champagne at a charity gala. "

"Trump Foundation lawyer Alan Futerfas said the non-profit has distributed approximately $19 million over the past decade, including $8.25 million of the president’s own money, to hundreds of charitable organizations "

"Trump also admitted in the agreements to directing that $100,000 in foundation money be used to settle legal claims over an 80-foot flagpole he had built at his Mar-a-Lago resort in Palm Beach, Florida, instead of paying the expense out of his own pocket. "

"In addition, the foundation paid $158,000 to resolve a lawsuit over a prize for a hole-in-one contest at a Trump-owned golf course, and $5,000 for ads promoting Trump’s hotels in the programs for charitable events. Trump admitted these transactions were also improper. "

Its not like you go to jail if you are caught, worse case scenario you get a slap on the wrist fine like Trump did.

You're not one for brevity, are you?

 

[pierino]

I cannot predict what would/could work in a decade or two, it is literally impossible in this environment to predict anything. With a series of AML, OECD BASE erosion and profit shifting and OECD bending over backwards to basically break the ability to legally minimize taxation. In 1979, a swiss numbered bank account was basically impenetrable. Now it is subject to facta, crs sharing, AML, KYC, and there is zero bank secrecy and the next target is going to be nominee directors/shareholders and eventually elimination of tax havens. In the 1970s you could literally walk with $4 million USD in two large suitcases stuffed to the brim in cash, and book a flight on a commercial carrier to Panama or Cayman islands and the government couldn't do s**t about it. That obviously won't work today.

10 years ago the Irish loophole worked, in 2023, that loophole will be closed but new ones will open up.

The non-profit loophole will be hard to close, because it means declaring war on organized religions who are headquarted overseas but have massive holdings in other nations like the Catholics, the Anglicans, etc. Like what are they going to do, tell the Catholics they can't send money to the Pope and the Vatican anymore? Do you understand the Holy Hell that would unleash? It might just be enough to get the backlash we been waiting for.

The main problem I found was to co-ordinate a time with the bank and my 3 directors when we could all come in (they won't open your account without all 4 of you there).

It goes faster if you put the non-profit that doesn't issue tax deductible receipts for donations in your jurisdiction ie. non-profit vs charity. The charities who issue the tax receipts get far more scrutiny and take way longer.


Of course charities/foundations exist to exploit people and for wealth protection, why do you think Donald Trump had one. It was not to help people, he doesn't give a s**t about people, it was to protect himself and enrich himself. And who can blame him, everyone is only out there for themself, you, me, the government, Trump, etc. There are no altruistic people except mother Teresa, the Pope and few other religious people and half of them diddle little boys so don't count.

99% of the time you listen to these charity people talk and their motivations are all about themselves and not about the person they are helping. Most of those large charities like unicef spend more on the executive salaries and marketing than helping the poor dying people they put on tv every five minutes.

https://globalnews.ca/news/6141289/trump-foundation-charity-fine/"“I am the only person I know, perhaps the only person in history, who can give major money to charity ($19M), charge no expense, and still be attacked by all the political hacks in New York state,” he said. “No wonder why we are all leaving!” "


"The president admitted, among other things, to improperly arranging for the charity to pay $10,000 for a 6-foot portrait of him. He also agreed to pay back $11,525 in foundation funds that he spent on sports memorabilia and champagne at a charity gala. "

"Trump Foundation lawyer Alan Futerfas said the non-profit has distributed approximately $19 million over the past decade, including $8.25 million of the president’s own money, to hundreds of charitable organizations "

"Trump also admitted in the agreements to directing that $100,000 in foundation money be used to settle legal claims over an 80-foot flagpole he had built at his Mar-a-Lago resort in Palm Beach, Florida, instead of paying the expense out of his own pocket. "

"In addition, the foundation paid $158,000 to resolve a lawsuit over a prize for a hole-in-one contest at a Trump-owned golf course, and $5,000 for ads promoting Trump’s hotels in the programs for charitable events. Trump admitted these transactions were also improper. "

Its not like you go to jail if you are caught, worse case scenario you get a slap on the wrist fine like Trump did.

Not to mention zuckerberg, who immediately moved 99% of his wealth in a charity. It was crystal clear he did it for profit, but i don't have the mechanism clear. I suppose move stocks directly into charity so taxes do not have to be paid, but then what? How is he going to use these money? Buying real estate for himself? paying his yacht?

 

[hernanday]

Not to mention zuckerberg, who immediately moved 99% of his wealth in a charity. It was crystal clear he did it for profit, but i don't have the mechanism clear. I suppose move stocks directly into charity so taxes do not have to be paid, but then what? How is he going to use these money? Buying real estate for himself? paying his yacht?

Pretend it is for charity like Trump while paying off personal expenses.
If he buys land and rents it out, its for the charity. If he buys yacht, it is for luring clients for his charity. If he buys food, he gave it away to poor people. If he spends money at a restaurant, it was for clients and prospects of the charity.

 

[JohnLocke]

I think we shall come back to topic here in order to not confuse people about the Topic title and the rest of the dicussion

 

[challenge]

the title these days should be "why risk offshore, just move out of your shi*hole country."
I know it's hard to move when you have ties, but freedom has a price. Most people aren't willing to pay it upfront and accept the state of things (and they'll end getting bitten later).

I agree with people above using companies/"loopholes"/tricks to shield/amortize/depreciate personal belongings. Sadly you can't pull this off in many countries these days.
If you're big enough to threaten thousands of jobs in that country, or VIP enough to cause a bad PR/image to the tax agency/country, you may well achieve ad hoc tax deals even in very high tax countries. If not, you're pretty much shafted.

I have a few anecdotes about how NOT everyone is equal before the law, even in many "first world" countries.
If the tax agencies knows that you can lawyer up at least up to their level, they'll handle your case with white gloves and will want to reach a much more reasonable "friendly deal". It's not rare to end up with like sub 10% tax deal without fines. If you're a random Joe, there's no way they'll lower the amount they want, rather they'll multiply it by adding interests and such.

I cannot stand a state that tells me how I should do my job.
I had to give up many business opportunities in high tax EU countries because the local tax agency wouldn't have allowed me to claim my business expenses in full.
A girl I know had to fight a years long tax-case and hundreds of thousands in lawyers (no joking!), after she was so pissed off about her tax rate and started claiming pretty much everything ("tv guest"/influencer: gucci/prada/ysl clothes, restaurants, lives in 5* hotels, 1st/biz/private flights, events etc. ). The tax agency tried to take her to court and wanted to fine her millions. In the end she won the tax law case, but it took years of anger.

If your country is like this, just RUN away. It's not worth to fight even if think you may win, you're only losing precious years of your life and money in lawyers.

 

[THR2017]

The second set of CFC countries include Canada and countries like them. They technically have no formal rule calling it cfc, but what they do is they tax overseas income from citizen owned/controlled corporations not under any conditions but where it appears to be passive income. They basically have an active business/earnings test and a taxation test. Essentially, if you have what looks like a passive income that is being used to earn money through a subsidiary, they tax you at high rates. However, if you set up what looks like a legit business, you can bring home that earnings nearly tax free so long as taxes are paid in a foreign jurisidiction who has a tax sharing agreeement with canada. That is typically barbados who puts a 1-2.5% tax on these types of firms. So one could earn like $4 million USD from a web business, setup in Barbados with a manager and at least 5 employees to make it look legit (typically they like 5 employees from my reading as a minimum) -don't worry min wage in barbados is low- run your business from barbados as subsidiary, stay in Canada, and only pay like 2.5% tax, without having to relocate on your $4 million. Not too bad, probably walk away with $3.8 million vs paying Canadian tax man, 30-40%.

You are right, it is a little more complicated accounting (requires Transfer Pricing) and is also fully declared to the Canadian Government. Better have crossed all your T's and dotted all your I's.

What about asset protection? Since the Barbados company is owned by your Canadian entity aren't all your Barbados assets at risk in Canada?

 

[hernanday]

You are right, it is a little more complicated accounting (requires Transfer Pricing) and is also fully declared to the Canadian Government. Better have crossed all your T's and dotted all your I's.

What about asset protection? Since the Barbados company is owned by your Canadian entity aren't all your Barbados assets at risk in Canada?

If you were that concerned about asset protection, there are guides on that. Ie. have the Barbadian company rent/lease everything controlled by or in name of another separate entity ideally a trust of some sorts.

 

[Spinat]

If you were that concerned about asset protection, there are guides on that. Ie. have the Barbadian company rent/lease everything controlled by or in name of another separate entity ideally a trust of some sorts.

Does it have to be on Barbados - it may work in almost any country if you can find a idiot willing to take the risk or not?

 

[Clip]

Why pay taxes?

 

[djaheim]

25% is high. Jersey is worth looking at, strong , reputable 0%