Offshore Solutions

There have been significant changes in the offshore industry since 2001. At first restrictions had been toughened to avoid financing of terrorism in the wake of the 9/11 attacks. Since the financial crisis began in 2007 OECD governments are eager to stop tax avoidance and evasion as they are desperate for your money. You can still use offshore companies - but you need to know how.

 

 

No cash, little privacy and a lot of explaining to do?

What you need to expect nowadays, with offshore companies, is a lot of scrutiny and a lot of inflexibility. For example no bank nowadays would accept a big pile of cash unless you had full verification that you took it just minutes ago from another bank account (that you may have just closed for example).

You would also need to accept that there is now no such thing as privacy. Unless you have a watertight story and can explain the origin of every penny you put into the company the banks won't touch you. Further to that you need to bring ID and address documents, references - the list goes on and on. There is no such thing as 'real' privacy anymore. Everything requires an explanation.

And don't expect your data to be safe; for evidence of this just look at what happened in Switzerland. You therefore need to take steps to ensure that everything is 'above board' - even if everyone is aware of your involvement.

Providers of offshore solutions have their hands full and are happy to help with any information information exchange requests if it keeps them out of trouble.  Always keep that in mind!

Our approach

In our mind, there is really only one solution to the issues described above. Our advice is always to keep everything you do in plain sight, or the majority of it at least. No hiding away or burying your head in the sand, no cash stashed away in some Swiss safe (who would?) make sure all of your business operations are in the open, there for all to see.

Live by what you claim to do, the glory days of offshore companies are over so it's time to wake up!

The most common uses for Offshore companies

At St Matthew, in most cases we see offshore companies not as a stand-alone entity but rather as one module in a structure that normally consists of several companies. The most common solutions are:

Personal Service Company

Allows you to charge services from your offshore company that you provide personally or through sub- contractors. For example, an IT-consultant from Germany lives in Dubai for a number of years, working on a business implementation project. He may use an offshore company to invoice his client in Dubai. Even after this, the consultant could move back to Germany, keep this company (without actively using it) and spend his money freely in Germany, as freely as it was earned in his previous tax-free jurisdiction.

Asset Protection Company

Traditionally this vehicle is used by clients who already have money offshore and want to use that money to buy an asset such as a yacht or property. You would set up a single purpose vehicle, fund it with your existing monies and then buy the asset. The advantage is that you buy the asset from untaxed money, nobody can take the asset from you (as it does not belong to you) and when you die your heirs don't pay inheritance tax as you simply give the shares of the company to them (nobody will know) and they don't receive the asset itself.

Holding Company

Same principle as the asset protection company. A business is owned by an offshore company so you can hide the real owners, get dividends paid to your offshore bank account so you can save on tax when you receive dividends or you sell the business.

E-Commerce Company

This works for 'virtual' goods such as gambling websites, software downloads or adult sites. Many ecommerce businesses operate from offshore because their business is virtual and there is no one required to help with the configuration or delivery of the products. It can work provided you follow the licencing rules of course.

International Trade Company

This really means trade outside the EU and, to some extent, from the US. For example you may buy goods in China and sell them to Latin America. In this instance the use of an offshore company would be totally normal and would not raise eyebrows. Hong Kong for example is very popular as a use for companies who are doing business with China.

Investment Company

With an investment company you invest your own money or your client's money and any profits end up in the offshore company. This is one of the few ways an offshore company CAN be used with not much difficulty, provided you do it correctly. Investing client money normally requires a licence. The reason for that being  the investment generates the return, not the human being.

Insurance Company

Using this model you are able to set up your own little insurance company with you as the only insurer. You fund the company with any money you have onshore or offshore. The money is managed by a provider, because the whole structure is based on a life insurance policy there is no tax to pay on the gains the company makes. You as the policy holder can borrow money from your life insurance and never pay it back. This model is perfectly legal, even in the US.

Jurisdictions

We offer companies in many jurisdictions. Note that in most cases we work with partner law firms who set up and manage these companies for us. A selection of the most common jurisdictions is represented below:

Antigua

Bahamas

Belize

Cyprus

Dominica

Guernsey

Hong Kong

Isle of Man

 

Jersey

 

Marshall Islands

 

Mauritius

 

New Zealand

 

Panama

 

Samoa

 

Seychelles

 

Singapore

 

Nevis

 

St Vincent

 

Dubai

 

Delaware

 

BVI

     

Offshore Banking

We offer the following offshore banking facilities:

  • Latvia: the best all-round bank account. This is a EUR account
  • Bahamas: We have contacts working with the best Swiss private banks in the Bahamas.  However you will require at least $1 Million as a deposit.
  • Hong-Kong: For clients with Hong Kong bank companies only. Comes with the added attraction of an anonymous credit card; no name, only the card number appears on the card.

Caution if You Live in the US or the EU

At St Matthew we always advocate that our solutions are in full compliance with the local law. Therefore, if you live in the US or the EU we need to advise you that offshore companies will be harder and harder to find.

Within a few years it will be practically impossible to legally own and run an offshore if you live in the US or the EU unless you operate a proper trade offshore (an office with staff or a factory etc). There will be severe punishments for offshore company providers, banks and clients who use or facilitate the use of offshore companies unless you fully declare yourself and can provide evidence that you have done so.

To be fair it's going to be very difficult to find out, especially when you use nominees, but do you want to take the risk?

It is therefore our advice to thoroughly consider the use of offshore structures if you live in the US or the EU unless you are happy to take a considerable risk.

Alternatively why don't you become a serious player and move to a country where the use of offshore companies is not problematic, for example Switzerland.

Clients who live outside the US and outside the EU are affected by the same issue, but to a much lesser extent.

Fees

Fees vary but you should expect £2,500 as a minimum fee for most companies, including the bank account in Latvia. This fee includes all services, costs and nominees that you will require. However we will most likely propose an offshore company as part of an overall solution, not on a stand-alone basis.

How to get started

To get started with your personalised offshore solution please request a quote today and indicate what you are looking for.