Tag Archives: offshore company

What is the Advantage of an Offshore Foreign Shelf Corporation?

With so many emails asking  What is the Advantage of an Offshore Foreign Shelf Corporation,  I decided to write this post.  The answer is going to date me.

In the old days, before the internet, each state and country had cumbersome corporate laws.   The states had laws to protect shareholders even for a closely held corporation (used by small business).  The corporation had to be approved by the state’s secretary of corporations or the secretary of state.

Foreign countries had similar laws.    In the old days, forming a corporation would take weeks and longer if the state bureaucrat had a question.  In the U.S, the laws have changed.  You can get a corporation  or an LLC in just a few days? 

However, Most foreign countries continue to have outdated these laws. 

Entrepreneurs move fast.  To please their client, attorneys would form a few corporations just to keep on their bookshelf.   Last century, your attorney would give you a book, called the corporate kit.

The book included blank stock certificates, a stock ledger, a section to keep the corporate minutes and of course a corporate seal.   While in the U.S. with the use of LLCs and firms like LegalZoom, these formalities have disappeared.  Further, the states can approve a corporation in a day or so.

However, in most foreign countries the slow bureaucrat remains.   I was in Guernsey, Channel Islands with a local attorney at the Guernsey Government’s office that approves corporations.  At was about 4:56 when we started to hand the paper work to the trusted government employee.

He carefully read each line and then abruptly closed the window to his booth.  It was 5pm and time to go home.  Yep, we had to come back  and restart the process.  A few weeks, later the Government approved the corporation.

In most countries (other than the United States) law firms still have bookshelves with a few corporate kits on the shelf… thus  a shelf corporation.

Here is how a shelf-corporation works.

You meet with the attorney.  You need a corporation asap for an important transaction.   It is going to take weeks to get the name you want and for the  government to approve the corporation.  But, for a few hundred dollars more you can purchase a corporation (and its  corporate kit) from the attorney.

Yes, you can have a corporation right now.   The attorney walks over to his bookshelf, grabs the corporate kit and hands the kit to you.    The attorney applies for a name change to the name that you need.   

Here you have the answer to the question  “What is the Advantage of an Offshore Foreign Shelf Corporation?”  It is speed.    If you would like to learn more about U.S. international taxation, the please check out this link.

If you need help with your international business, then send me an email ([email protected]).


IRS says “Yes” to asset protection with an offshore company

saving taxes, how to save taxes, tax planning,

Saving taxes with an IRS approved tax plan is called a private letter ruling.

Protecting assets from the IRS is a challenge.  U.S. Courts know that the USA needs money & lots of money.  So, they allow the IRS to grab anything that they can find in the United Sates.

Something as “easy” as placing your wealth in a foreign corporation may protect your assets; not just from the IRS but other creditors, too. 

Learn why in this internal IRS correspondence (if you wish to brainstorm your tax ideas with me, Brian Dooley CPA, then please call me at 949–939–3414).   

ID: CCA_2013072514384046
Office: * * *
From: * * *

Sent: Thursday, July 25, 2013, 2:38:42 PM

To: * * * Subject: Transferee Liability Question

 You asked whether the Service could successfully assert transferee liability against a foreign entity that lacks a federal employer identification number and does not do business in the United States.

From what you told me, the answer is no. As you mentioned, the exam file does not reveal that the entity owns any real estate, bank accounts, investments, or other property in the United States. Given the apparent lack of any connection to the United States, the Service could not successfully assert transferee liability against the entity.

Let me know if you have any other questions.

The Prettiest and Cheapest Swiss Tax Haven…This is How it is Done

With a strong currency, great business laws and a low tax rate, a small town in Switzerland is attracting American businesses.   Spend a few minutes with this excerpt from Sixty Minutes to learn a what is happening.

Start to save money with your own controlled foreign corporation.   Besides Switzerland, the United Kingdom and Canada are promoting themselves as a tax haven for American business.  The average small business isTtaxed at  35% U.S. tax rate (and a state tax rate).

Comparing U.S. / state 43% tax rate to the Swiss 17% tax rate and the U.K. 20% tax rate shows how incorporating outside the U.S. can increase your cash flow.   If you want to brainstorm your situation, then give me, Brian Dooley, CPA, MBT, at 949-939-3414 for a free consultation.

Need more information, then spend $9.50 to get International Taxation in America for the Entrepreneur (on this link).  The book is an easy two-hour read.

Court Gives New Tax Breaks for Tax Haven Investment Companies

tax planning, saving taxes, how to save taxes, tax court

Tax Court explains great tax planning in this case.

A  Great Tax Tool is a related party private annuity.  This tool saves taxes on investment income.  Now, a Tax Court case provides the blueprint.   The Court’s decision allows you to fund a tax haven corporation with a private annuity and cut your taxes in half.

Saving taxes requires you to invest your time with your tax team.  Tax planning requires your involvement.

To learn how to save taxes, listen to our internet radio show, Tax Talk, below.   The show is about 15 minutes. The entertaining show explains how you save on your  investment income.

Seemingly innocent but deadly to the IRS, private annuities have saved taxes since the beginning of the 1900’s.   Now they are better.  The U.S. Tax Court agreed that private annuities paid by a tax haven corporation avoid all of nasty  the anti-tax haven laws.

It gets better.  The IRS private annuity interest rates are at an all time low (about two percent). This allows for income shifting to your offshore company.

Something as simple as your own offshore corporation  funded with your own money provides tax savings and asset protection beyond your wildest dreams (tax dreams that is).

The trick?   The trick, as you will learn, is the IRS’s own information return, regulations and a recent Tax Court victory in  Dante and Sandi Perano, Petitioners vs. Commissioner of Internal Revenue.

Need some tax brainstorming?   Then please call me, Brian Dooley, CPA, MBT at (949-939-3414) for a one hour complimentary consultation.  Looking for more tax plans.  These books at Amazon can help you. 

Canadian Tax Court Rules America the Best Tax Haven

How to avoid taxes with a limited liability company is a topic that both Australia and Canada are addressing. Their international tax planners are using the American limited liability company  (LLC) as a tax haven.  

The Tax Court of Canada’s is a case where the court ruled that a Delaware LLC owned by indirectly by a Canadian company creates the ultimate international tax haven company. 

This case makes it clear that any American LLC gets treaty benefits including those LLC’s that have no US taxable income.    

If you would like to brainstorm your international tax planning ideas, then call me, Brian Dooley CPA, at 949-939-3414 for a free brainstorming consultation. 

In blue below is a case summary with some additional tax planning afterward.

In  TD SECURITIES (USA) LLC, Appellant, vs. HER MAJESTY THE QUEEN, Respondent, a Canadian corporation formed a Delaware single member limited liability company (TD LLC) owned in turn by another Delaware corporation.

Next, it had TD LLC operate a business in Canada.  The business is was a virtual business (see our article at this link). So, while it had a business in Canada it did not have a “permanent establishment.”

Canada taxes this type of business as a branch at 25%.  However, under the US-Canada tax treaty, US branches are taxed at 5%.  The Payoff?  In this case, a great foreign tax credit.  In other situations, a complete absence of taxes.  Our LLC’s can be used in many ways to save taxes on cross-border income.

So, the big question is a disregarded LLC a branch of a US business? Remember, the LLC is owned by a US corporation which in turn belongs to a Canadian corporation.   Yes, it is a branch of itself and not a branch of its owner.

So, where is the IRS? Where is should be…. out of the picture.  For American taxes, TD LLC does not exist.

Only America sees a single member LLC as non-existing.  The United Kingdom Inland Revenue posted a blog saying an American LLC is a corporation of U.K. tax law.   Canada agrees!

TD LLC is an American corporation headquartered in the tax haven state of Delaware (V.P Joe Biden’s home state…hum).  TD LLC’s sole activity is a branch in Canada.  As a United States person, the LLC qualifies under the Income Tax Treaty.

Ironically, Congress is passing a no treaty shopping tax law for foreign persons investing in America.  Meanwhile, we have a domestic, foreign trust law and our non-existing LLC laws.

Now, this is not the only way to use the USA as the tax haven. Here is a link to our video article America the Worlds Best Tax Haven

Also, the international classification has caused confusion in Australia.   If you would like to brainstorm your international business, then please give me, Brian Dooley, CPA, MBT a call at 949-939-3414 for a no-charge consultation.