Avoid paying taxes with an Offshore Company

[italkcash]

It is said that 60% of all wealth in the world is currently held in offshore destinations such as BVI, Cayman Islands and Panama. Hedge Funds, large corporations avoiding tax are holding all their excess savings there for hard times and simply because they are not taxed by anyone for holding large sums of money in an Offshore Company.

That said, anyone operating in multiple countries in their right mind would setup an offshore company in a jurisdiction that fits their needs. For instance Panama has a high security regarding the anonymity of their foreign countries. Panama's law does not allow agents to give out information about foreign corporations, as they can risk both jail and huge fines.

[eyes4]

Eek!
Perfectly worded dangle for a federal sting operation.

The thread name alone ought to attract IRS and FBI agents salivating to scoop up the first dim-wits to confuse "Avoid Paying Taxes" with "Evade Paying Taxes" and attempt something stupid.

Perhaps adding "Legally Avoid..." or add to the post whether offshore companies and their accounts need to be reported even though they will not be taxed, etc. "Un-reported" accounts and income are sometimes treated as attempts at evasion.

The U.S. is the biggest tax haven in the world. The current hullabaloo in congress over Switzerland and Liechtenstein accounts being used to evade taxes and stonewall countries of origin is bald hypocrisy.

To avoid confusion and stave off inquiries by the less-than-scrupulous, please provide examples, evidence or more specific information about the processes and systems mentioned for Panama.

I agree setting up an off shore company would show diligence by those in charge of treasury management, I just think a specific declaration should be made every once in a while to define the common terms sometimes confused by readers categorized as unsophisticated.

eyes4

[DianaR]

Don't even take this seriously. The USA is in the process of eliminating the advantages mentioned in the original post, here, and any maneuver like this will definitely have the treasury department watching your every move..

[mandiees]

Wow - this is by far the worst "advice" post I have seen on here! Terrible. Stay Away!!

[DianaR]

Are there any situations where you might have to set up a company in another country to do business there?

The requirement for local registration would probably be the only situation that wouldn't put you in dutch with the law. Setting up offshore accounts to hide earnings would be an obvious ploy to avoid taxes, but fulfilling the obligations associated with legitimate business may protect you from prosecution ot closer scrutiny.

[manojjonam10]

Well offshore investments are famous for keeping the privacy and the name of the investors. It is really hard to figure out who invested in those offshore destination.

[DianaR]

Originally Posted by manojjonam10

Well offshore investments are famous for keeping the privacy and the name of the investors. It is really hard to figure out who invested in those offshore destination.

I have a feeling that this might end if Obama is elected president and congress is mostly Democratic run.

We can only hope!

[Offshore]

A Panamanian corporation offers the following benefits:
No reporting requirements (since Panama has a territorial tax system, while the income is earned offshore or from exempt sources, such as interest on bank accounts, then the corporation is not required to present tax returns or audited accounts).
While the income earned by the company is not Panamanian-source income, there will not be any income tax due in Panama and hence no tax returns necessary here.
Funds and accumulated offshore profits can be deposited or invested in any country in the world without becoming subject to taxation in Panama.
It is possible to keep a business under direct control while maintaining complete confidentiality. This is possible because the names and details of the beneficial owners are not publicly available, since they are not filed at the public registry.
The company is not required to file any changes to ownership schedule, after the registration is complete, which means that only the directors of the company will know who the shareholders are (since they maintain the company records and will be responsible for the issuance of the share certificates).
It is not required to maintain a legal address, such as a Registered Office in Panama. Nevertheless, every Panamanian corporation has a Registered Agent in Panama, which must be a lawyer or a law firm.
There are no Citizenship or residency requirements or restrictions with respect to Owners, Directors and Officers of the company.
Shareholders' and Directors' meetings may be held anywhere in the world.
Shares of the company may be issued in a registered form or to "Bearer", known as bearer shares.
One person may hold all three offices of the President, Corporate Secretary and Treasurer of the Company.

Other common advantages of Panama's IBC's are:
Asset Protection
Income Tax Reduction or elimination
No inheritance, succession or gift taxes
Protection from inflation, since Panama's currency (the Balboa) is pegged to the US dollar, in Panama there is no inflation upon the devaluation of the Balboa. Nevertheless, the Panamanian economy is subject to the fluctuations of the US Dollar, particularly against the Euro.
Freedom from currency exchange control
Reduction in legal liabilities, since the company has limited liability
Reduction in operating expenses
Easy access to North American and European Capital Markets
No International Trade Tariffs
No annual tax return requirements
No import/export quantity limitations

Panama Brokerage, Offshore Forex Accounts

[3ashrey]

Many people use offshore just to avoid taxes in their enterprises, in many countries that is a crime including United States.

[Tolstoy]

I'm 16 and run a business, do I have to pay tax yet? I'm the registered director of the company. What about offshore banking (cayman islands for example)? Basically I want to avoid paying tax in a legal way.