-Isle of Man
-Hong Kong
or anywhere with low corporate tax rates and relatively low overheads/complexities of operation.....thanks
specifically interested in experiences with;
There is not such thing as a cheap tax avoidance scheme, if there was you'd find it with a quick google....
A couple of yeas ago I helped dismantle one based Antigua for my cousin a solicitor, who in turn was helping the son of another cousin who thought there was.
If you've got the money to be in that league pay a competent advisor to ensure that you won't get caught out. The tax authorities are well aware of most of the games by now, so you need real expertise to set these things up in a way that you will get away with it.
Thanks for the input. Yea I have some good advice from one of the biggest corporate services providers on IOM and in other locations, so the main context is clear, as are costs. What I was interested in, was anyone’s experience with running a business there etc, hence the question. Certainly I’m aware there’s no magical solution, but proper planning is key to running a successful business
I have one, it is in Switzerland
As Jim2007 also stated, it is not worth the effort. I think Switzerland has very good effective tax rates (a very good fiduciary is key to understand the law and apply accordingly). But my personal experience is the same as Jim2007, those companies do not work for several reasons:
1- No bank in Switzerland will give you an account for an offshore company
2- The companies you work with will not pay into HK or Isle of Man accounts if the job is done in Switzerland/EU, simply because their compliance departments will red flag you for money laundry or tax evasion. They might even be forced to inform authorities, to avoid being a party to that crime.
3- If you are working in Switzerland and do not have a Swiss company, you have a reputation risk, they will think you are either broke (cannot setup an Sarl with 20K or SA with 100K) or you are a cheater.
4- When the tax authorities catch you, and do not be mistaken, THEY WILL CATCH YOU (one of their tools is here: https://www.sif.admin.ch/sif/en/home...-accounts.html ), you cannot tell them you didn't know, because it will be obvious that you were doing whatever you were doing to evade taxes, which is a crime. Then you will have fun months / years explaining to them why you did what you did.
For all of the above, I would advise having a Swiss company as the best solution.
thanks for the reply.....1,2 & 3 are not an issue.
I'm wondering about your comment "they will catch you" ? This implies that something 'wrong / illegal' is being done? Can you expand?
Tax & administrative optimization is not the same as tax evasion. And as a director, drawing a salary (with swiss social costs etc paid), and receiving dividends would give a significant personal income which would always be taxed accordingly in switzerland. My main reason to consider offshore is more about administration than tax, as with a well-located company, corp tax is not much in switzerland.
Poot, set up a normal Swiss company, make your millions then pay for professional advice and go off shore.......if it really is worth it which for a few thousand you may save or not, it probably isn't
Happy to help, if I can. I am not an accountant, I am a business owner, so my information comes mostly from reading and experience working with accountants, but I cannot guarantee that I am 100% right, you simply need to discuss these things with accountants, fiduciaries, tax advisors in the countries that you would like to operate.
They will catch you means, even though you try to operate 100% within the laws, you will be breaking VAT laws, PE laws, etc. and "I didn't know" is not an excuse.
For these things to work, you need to pay accountants lots of money in multiple countries to make sure that your companies do not break any laws. Unless you are making millions as Biro stated, none of these are worth the effort. But then again, Switzerland offers a tax discount to many companies if they are making more than a certain sum.
Exactly, my point, it is not worth the effort.
True, but you are not following the principle of the law and taxpayers/voters get very upset about that. So tax avoidance is constant battle between the blood hounds you hire to find the loopholes and the tax authorise struggling to plug them. There is no gurantee that the tax avoidance scheme you setup to day may only survive a month, a year, 5 years, a decade etc... and when it falls it may be expensive for you.
The other thing is that you must be very disciplined in your behaviour and most people are not. People are in a hurry, make a mistake in a transfer or a payment and suddenly they have given the revenue a toe in the door.
Also, be aware that most Swiss companies will not do business with a company that is not properly registered for VAT and social welfare payments etc...
If your objective is easy of administration, then I really don't understand why you want to make it this complicated.
Absolutely! I see more pain in this setup than simply having a Swiss company.
Also true; on some occasions I was asked to prove that my company does not have debts to AVS, Tax authorities, etc.
I guess it's being thought of like this;
-setup a company in another country for a specific consulting business (clients happy to pay a company located anywhere, and they are not in switzerland)
-swiss payroll company invoices the offshore company: I get a salary, fully compliant with AHV/SVA, swiss employer etc
Advantage:
-as I'm a normal employee in switzerland, still eligible for unemployment benefits / insurance if it doesnt work out over time and I become unemployed
-easier than CH to wind down company if it doesnt work out
-cheaper to incorpate vs CH
-potential (though not guaranteed) for less corporation tax vs CH
A disadvantage to creating ones own GMBH in switzerland is that as a director / owner of said company, you would then not be eligible for unemployment benefits if it needed to be wound down. This is also influencing decision.
As a law-abiding, tax paying citizen I don't see this as trying to scam or avoid tax, but as a genuine, legitimate business setup. Of course am also taking various professional advices. Just trying to figure it all out right now, hence asking for thoughts and opinions
Have a look at Madeira. SDM.PT
Fully tax compliant and recognized by the EU as it's part of Portugal.
Tax rate of 5% fully approved by the EU and guaranteed till end of 2027.
Portuguese VAT number on incorporation for all intra EU trade.
No withholding tax on dividends and complies with the Swiss - EU Parent/Subsidiary directive.
Discussions begin shortly to extend the regime for another 7 years till 2034.
You can then make a branch office in Switzerland for purposes of employing you and for Swiss trade, though this is not necessary if you don't want to.
Importantly, this is not "offshore" nor a tax haven.
Great tip thanks. Funnily enough this also came up recently in another conversation. Do you by any chance have any recommendations for companies to use for incorporations? (happy to google around, but of course a recommendation is always great)
I understand your situation but:
the problems I see in your setup:
1- swiss payroll company invoices the offshore company: those guys are charging 20-30% premium
2- cheaper to incorporate vs CH: I disagree, offshore companies are extremely costly, they incorporate for 500 USD, but then every move is another 500USD each time (director registry, bla bla paper, etc.); Switzerland is around 2000 CHF flat cost (ask a notary).
3- unemployment: disagree again, you are paying AVS charges, you have the full right to unemployment if your company goes down the drain; you simply close it and go to RAV. GMBH is problematic because you are the shareholder/director at the same time, SA/AG is much simpler in this respect.
I think it is important that you take professional advice, especially from a certified accountant in Switzerland.
Very good idea, this could work.
Portugal has also a double tax treaty with Switzerland.
https://www.admin.ch/gov/en/start/do...-id-45090.html
But again, talk to an accountant
thanks for the input! I would just make a comment to: "1- swiss payroll company invoices the offshore company: those guys are charging 20-30% premium"
Not sure where you get that info, but companies like Payroll plus charge like 2% and will invoice a company that's based outside of switzerland no problem
re company wind-down, I have heard mixed things, but it seems like winding down a company here can take +6months. But yeah, I see your point re AVS. Always difficult to take a call with so much different info floating around
ECCO. +351 963 262 211 Nicolas Vega Franca
It's a good company and his father used to work for the licensing authority.
Good luck with it all.
How many millions are we talking about ?
It was my first hand experience back in 2014-15, happy to see 2% now; thank you for the info.
I believe if it was in the million range, this thread would not have been started