8 ms·

Setting Up a Cayman Islands Company [pdf]

179 points by dvasdekis 9y ago

oceanswave 9y ago
Well, not quite. From the article, 731.71 for the paperwork, but also an annual fee of 853.66. Additionally, a Registered Office is required, which they will provide for 2,500/yr. Rates are tiered based on income, and may be higher based on class of business. 731.71 just gets you in the door.
- ocdtrekkie 9y ago
  For what it's worth, this likely was submitted because of the California post that's currently #1 on HN, claiming you can have a California LLC for $70. It also states you'll need "An $800 LLC “tax” paid annually at tax time".
  - loufe 9y ago
    To be clear, the HN post you're referring to only claims the $70 is to FORM the LLC.
    - ocdtrekkie 9y ago
      And so does the headline of this submission. :)
mozumder 9y ago
What are the advantages/disadvantages over a typical Delaware C-Corp?
- caymanjim 9y ago
  Cayman has no taxes. There are various fees required to register a corporation, but income and capital gains aren't taxed (for businesses or individuals). Note that the IRS still requires US citizens to file personal income tax returns, and they still have to pay taxes on foreign earned income. I am not a lawyer or accountant, but I did live and work there for years. The main benefits are tax avoidance, but it's much more difficult for US citizens than for others (most countries don't tax their citizens on foreign income; capital gains laws vary). People will make all the obligatory jokes about shady rich tax dodgers, and there are rich people and corporations that like to keep money in Cayman for ethically questionable reasons, but the majority of Cayman finance is completely legal, ethical, and above-board.
  - artwr 9y ago
    > People will make all the obligatory jokes about shady rich tax dodgers, and there are rich people and corporations that like to keep money in Cayman for ethically questionable reasons, but the majority of Cayman finance is completely legal, ethical, and above-board. This sounds like it might be true in terms of number of individual accounts maybe, but do you think that's true in terms of overall asset value?
    - caymanjim 9y ago
      It'd be hard to draw a line on what's sketchy and what's not. Taxes are incredibly complicated. Defining what's legitimate business vs. ethically questionable vs. illegal (and whose laws are being violated) makes it hard to even categorize the money, even if there were data available on how much is there and who controls it. My guess is that there's probably much more there that's completely legal, but pushes people's buttons because they want to see it taxed at home. Like Apple's overseas billions (which are largely sheltered elsewhere, but you get the idea).
      - colechristensen 9y ago
        What is clear that the world governments are and have been accelerating their efforts to quash tax avoidance. For example, in 2013 the oldest running Swiss bank, Wegelin, (itself older than the US) shut down as a result of a guilty plea for a case brought by the justice department. https://www.reuters.com/article/us-swissbank-wegelin/swiss-bank-wegelin-to-close-after-guilty-plea-idUSBRE9020O020130104 https://www.reuters.com/article/us-swissbank-wegelin/swiss-b...
  - icantdrive55 9y ago
    I know a few Cayman boys over the years. They were shady, but they had money. This one guy went over every two weeks with $15,000 cash. I was to young to completely know why, but the Islands were his, "Piggy Bank". I hope the IRS is at least trying to stop the tax dodgers/money launderers. He had a suit with special pockets. (These days might be randomly patted down. This guy was horrid on so many levels. He once kicked his kid down a staircase for being lazy. His child had undiagnosed congenital heart disease. I brought him up because he was a "family" man, with the Wall Street job, and even showed up for Sunday service, but just an aweful person. He was ruthless before it became kinda hip to worship money. Yes--at one time, in certain American circles; worshiping money wasen't cool.
- linkmotif 9y ago
  I believe Cayman Islands is for hiding your money whereas Delaware is for legit business.
  - rdlecler1 9y ago
    Not true. If you’re a foreign entity it can cause tax issues to be directly investing in a Delaware structure so sometimes you need a blocker entity.
    - Mandatum 9y ago
      Blocker entities are purely for "bypassing my local laws and country from make sure I follow said laws". Sure, I understand the appeal - it's the equivalent of hiding a bag of cash somewhere and having a trusted third-party provide the location to whoever you want after your death. No laws, no lawyers, security for your wishes - exactly what you want. "Tax issues" are synonymous with "I'm liable to pay more taxes if I'm up-front, direct and transparent with my legal structure"
      - SkyAtWork 9y ago
        That isn't entirely true. For instance, if you are investing on behalf of a foundation or other nonprofit structure, or a similar non-taxed or tax-deferred entity (like a pension fund), you have a reason to preserve your legitimate tax free status. This is one reason you'll see US hedge funds with both Delaware and Cayman entities even if they only have US subscribers - because some of those US subscribers will be entities outside the conventional person/corporation tax model.
        Mandatum 9y ago
        AFAIK 5013C's are exempt in that case?
    - linkmotif 9y ago
      “Tax issues” like having to pay taxes? Isn’t that what I’m saying?
rdrey 9y ago
IANAL, but that's not useful for hackers. This is more useful for hackers: https://www.caymanenterprisecity.com/ https://www.caymanenterprisecity.com/ - 100% foreign ownership - No corporate/capital gains taxes - 5-year work/residence permits for the team -- No personal income tax in the Caymans for anyone moving here From a friend who has gone through the process of setting one up for consulting, the initial setup cost ~30k USD and renewal costs ~15k USD per year. - you still need an office package https://www.caymanenterprisecity.com/service-packages https://www.caymanenterprisecity.com/service-packages - setup is not really that quick and painless If you'd otherwise pay income tax pretty much anywhere else it might still make financial sense.
- deleted 9y ago
  [deleted]
- mattsfrey 9y ago
  US citizens still owe taxes on any income over a certain threshold as per: https://en.wikipedia.org/wiki/Foreign_earned_income_exclusion https://en.wikipedia.org/wiki/Foreign_earned_income_exclusio... There is no more tax advantage to the law abiding citizen in this scheme versus just registering an llc in wyoming/nevada and living abroad.
  - rdrey 9y ago
    law abiding *US citizen, but yes.
    - mattsfrey 9y ago
      Which is why I started my comment with "US citizens.." but also, if you're not a US citizen (for most countries anyway) you can register a corporation in a dozen other tax havens and avoid any taxation without those ludicrous fees given you are living abroad.
      - rdrey 9y ago
        If you can pull off the tax-nomad thing. There are fewer places in which you can basically "buy" work permits and live income tax-free semi-permanently. (The Caymans will "roll you over" / send you home for a year after 8-9 years if you don't apply for Permanent Residence (more expensive).)
MikeEhrmantraut 9y ago
I'm curious if any HNers have any ideas for ways to use off-shore status to protect your website from frivolous libel claims. I run some forums in the automotive industry that have been around for about 15 years. I take pride on being pro-free speech and loosely moderating things, only taking down obviously illegal posts, copyright infringements, etc. Despite that, I still occasionally get legal threats from people who have gotten their feelings hurt. In one case, the threats came from an actual attorney who was representing a shady commercial seller who got into it with some of our members. I would love to move the ownership of the forums to some sort of arrangement (offshore) where they are essentially immune to frivolous libel claims. I want attorneys to look at us and tell their clients that it's simply not worth going after us. Is there such a place? edit: I forgot to mention that my site runs no ads and makes no money whatsoever...a rarity in the forums world. I keep it like this because I love the hobby and I hate all of the other shitty forums sites that are filled with adware garbage. Given this, it's a real hardship when some attorney threatens me with a lawsuit because I just don't have the cash to properly defend myself.
- myrryr 9y ago
  New Zealand? The courts here are pretty sensible. They have 0 issues with telling someone they are just being silly and to leave. They can still bring a case against you - but, it isn't expensive to defend like the US is.
  - mirimir 9y ago
    Didn't protect Kim Dotcom.
    - function_seven 9y ago
      OP isn’t looking for shield from the US Government. Your “didn’t protect” comments aren’t really relevant.
    - MikeEhrmantraut 9y ago
      In my case, I'm not involved in any copyright infringement. I'm merely trying to protect myself from frivolous libel threats. The problem with these threats is that you're forced into making a choice: spend real money to defend yourself (my site makes no income) or give in to the assholes and take down posts. When the disputed post concerns a shady for-sale transaction, removing the post effectively whitewashes the shady seller's reputation and potentially exposes innocent future buyers to getting hosed. It's a crappy situation and I just want to be immune to it all.
eloff 9y ago
So $700 for setup and $3300/year? It's way, way cheaper to do this in Panama, same tax advantages, and the country uses the US dollar.
- bigtones 9y ago
  Panama has corporate tax of 25% and personal income tax rate of between 15% and 25%, Cayman islands has zero tax.
  - eloff 9y ago
    Panama has zero tax on foreign source income, which unless you're going to open a local business, means it has effectively zero tax - personal or corporate.
    - StavrosK 9y ago
      How much are formation/annual fees for Panama, do you know?
      - eloff 9y ago
        About $1000-$2000 for initial setup if you use a law firm to do it for you. $300/year if you registered it as offshore, meaning you don't do business in Panama. In that case you do not even need to file taxes. Otherwise you have $65 filing fees for taxes as well, which you just declare the company as offshore, and have no taxes owing.
        StavrosK 9y ago
        Oh huh, that's pretty cheap. Cheapest I've found in the Caymans is $2500 setup and $1500/yr, and many lawyer firms rip you off by billing you hundreds of dollars to give you unsolicited advice (yeah, it's that bad). Panama sounds like a much better idea, unfortunately it's impossible to get Stripe/another processor for a company outside the EU/US.
sargun 9y ago
So, dumb question. One of the biggest impingements upon grey businesses (prostitution, pornography, imitation goods, gambling, social media profiles) is payment processing. Now, VISA, AMEX, etc.. will never want to process these payments. If the Antigua, The Cayman Islands, or Panama have a healthy banking system, what prevents someone from setting up a VISA clone there? As a service provider, if you can work in their banking system as a legitmate bank, all you need is client banks -- And getting a bank account there is reasonable easy from my understanding. Similar to: https://en.wikipedia.org/wiki/E-gold https://en.wikipedia.org/wiki/E-gold https://en.wikipedia.org/wiki/E-Bullion https://en.wikipedia.org/wiki/E-Bullion Could you build a similar model to "GoldMoney" (https://en.wikipedia.org/wiki/GoldMoney https://en.wikipedia.org/wiki/GoldMoney) without KYC?
- JumpCrisscross 9y ago
  > Now, VISA, AMEX, etc.. will never want to process these payments Lots of legitimate business happens through the Caymans (for international finance) and Bermuda (for insurance). Wiring U.S. dollars between the Caymans and New York is instantaneous.
  - Mandatum 9y ago
    This used to be true as they'd modernised their banking systems very early compared with many heavily-regulated countries and companies. However this is no longer the case, technology and platforms exist for similar speed and security offered by the aforementioned nations. The only real exceptions are countries currently embargoed or labeled as a "risk" by the IMF for money laundering.
- um_ya 9y ago
  If I'm not mistaken, Gold and silver is considered money under the US constitution, not a commodity... You would have to use something like Bitcoin or some other commodity.
- colechristensen 9y ago
  The idea is for the money to get out of and back into the US financial system. The courts will stomp on whomever is facilitating the illicit payments and making that connection. Anti-money laundering regulations and regulators are competent and experienced. If you want to start an online casino that just works for the cayman islands, sure. If you want it to work anywhere else you're going to have trouble.
Mandatum 9y ago
The data on places to incorporate are slowly becoming more and more open. Generally you incorporate off-shore for one to many of these three reasons: tax minimisation, privacy and corporation structuring. For most people, an LLC in New Mexico, US (provided you are able to enter the US) with a parent company in the BVI is the easiest option. Overall this will cost you less than $1,000/yr to operate as an LLC with none of your identification or documentation on it, bank accounts and services available in a first-world country, however operating as a proxy corporation for a BVI-based company therefore not subject to corporation tax. However there are risks associated with this setup, plenty of people have had bank accounts frozen or assets seized temporarily if their accounts are included in a "probably tax evader or drug cartel" report. So it's suggested to never keep funds in your US-based corporation. Use a reputable, US-based accountant for your annual filing to minimise this risk. If you're not a US citizen or resident, the only risk is the possibility you won't have access to your funds for a long period of time (and you'll likely have to fly back to the US to sort things out). Now, what I've written above is technically legal provided you're not a US citizen, or if you aren't obligated by law to pay federal or state taxes. However, it - and many, many similar structures are used every day for corrupt, illicit and morally bankrupt reasons. Nobody is interested in fixing this. We've put in Anti-Money Laundering and Know Your Customer regulations whilst simultaneously PROVIDING ways to make sure people can still get away with tax evasion and hiding dirty money (US: insane protection for corporate entities, UK: owning and operating some of the largest tax havens in the world). As the world begins to wise up to these methods, we're already seeing other super-powers begin to offer the same and in some cases much better services. Taiwan and China, I'm looking at you.
- philfrasty 9y ago
  „...or if you aren't obligated by law to pay federal or state taxes...“ this is the key sentence here and mostly not talked. Many people do not understand that you may have to pay income tax even though a foreign company/entity holds all profits/cash/assets. For Germany see the „Außensteuergesetz“ https://www.gesetze-im-internet.de/astg/__7.html https://www.gesetze-im-internet.de/astg/__7.html

179 points by dvasdekis 9y ago

Well, not quite. From the article, 731.71 for the paperwork, but also an annual fee of 853.66. Additionally, a Registered Office is required, which they will provide for 2,500/yr. Rates are tiered based on income, and may be higher based on class of business. 731.71 just gets you in the door.

ocdtrekkie 9y ago
For what it's worth, this likely was submitted because of the California post that's currently #1 on HN, claiming you can have a California LLC for $70. It also states you'll need "An $800 LLC “tax” paid annually at tax time".
- loufe 9y ago
  To be clear, the HN post you're referring to only claims the $70 is to FORM the LLC.
  - ocdtrekkie 9y ago
    And so does the headline of this submission. :)

mozumder 9y ago

What are the advantages/disadvantages over a typical Delaware C-Corp?

caymanjim 9y ago
Cayman has no taxes. There are various fees required to register a corporation, but income and capital gains aren't taxed (for businesses or individuals). Note that the IRS still requires US citizens to file personal income tax returns, and they still have to pay taxes on foreign earned income. I am not a lawyer or accountant, but I did live and work there for years. The main benefits are tax avoidance, but it's much more difficult for US citizens than for others (most countries don't tax their citizens on foreign income; capital gains laws vary). People will make all the obligatory jokes about shady rich tax dodgers, and there are rich people and corporations that like to keep money in Cayman for ethically questionable reasons, but the majority of Cayman finance is completely legal, ethical, and above-board.
- artwr 9y ago
  > People will make all the obligatory jokes about shady rich tax dodgers, and there are rich people and corporations that like to keep money in Cayman for ethically questionable reasons, but the majority of Cayman finance is completely legal, ethical, and above-board. This sounds like it might be true in terms of number of individual accounts maybe, but do you think that's true in terms of overall asset value?
  - caymanjim 9y ago
    It'd be hard to draw a line on what's sketchy and what's not. Taxes are incredibly complicated. Defining what's legitimate business vs. ethically questionable vs. illegal (and whose laws are being violated) makes it hard to even categorize the money, even if there were data available on how much is there and who controls it. My guess is that there's probably much more there that's completely legal, but pushes people's buttons because they want to see it taxed at home. Like Apple's overseas billions (which are largely sheltered elsewhere, but you get the idea).
    - colechristensen 9y ago
      What is clear that the world governments are and have been accelerating their efforts to quash tax avoidance. For example, in 2013 the oldest running Swiss bank, Wegelin, (itself older than the US) shut down as a result of a guilty plea for a case brought by the justice department. https://www.reuters.com/article/us-swissbank-wegelin/swiss-bank-wegelin-to-close-after-guilty-plea-idUSBRE9020O020130104 https://www.reuters.com/article/us-swissbank-wegelin/swiss-b...
- icantdrive55 9y ago
  I know a few Cayman boys over the years. They were shady, but they had money. This one guy went over every two weeks with $15,000 cash. I was to young to completely know why, but the Islands were his, "Piggy Bank". I hope the IRS is at least trying to stop the tax dodgers/money launderers. He had a suit with special pockets. (These days might be randomly patted down. This guy was horrid on so many levels. He once kicked his kid down a staircase for being lazy. His child had undiagnosed congenital heart disease. I brought him up because he was a "family" man, with the Wall Street job, and even showed up for Sunday service, but just an aweful person. He was ruthless before it became kinda hip to worship money. Yes--at one time, in certain American circles; worshiping money wasen't cool.
linkmotif 9y ago
I believe Cayman Islands is for hiding your money whereas Delaware is for legit business.
- rdlecler1 9y ago
  Not true. If you’re a foreign entity it can cause tax issues to be directly investing in a Delaware structure so sometimes you need a blocker entity.
  - Mandatum 9y ago
    Blocker entities are purely for "bypassing my local laws and country from make sure I follow said laws". Sure, I understand the appeal - it's the equivalent of hiding a bag of cash somewhere and having a trusted third-party provide the location to whoever you want after your death. No laws, no lawyers, security for your wishes - exactly what you want. "Tax issues" are synonymous with "I'm liable to pay more taxes if I'm up-front, direct and transparent with my legal structure"
    - SkyAtWork 9y ago
      That isn't entirely true. For instance, if you are investing on behalf of a foundation or other nonprofit structure, or a similar non-taxed or tax-deferred entity (like a pension fund), you have a reason to preserve your legitimate tax free status. This is one reason you'll see US hedge funds with both Delaware and Cayman entities even if they only have US subscribers - because some of those US subscribers will be entities outside the conventional person/corporation tax model.
      - Mandatum 9y ago
        AFAIK 5013C's are exempt in that case?
  - linkmotif 9y ago
    “Tax issues” like having to pay taxes? Isn’t that what I’m saying?

rdrey 9y ago

IANAL, but that's not useful for hackers. This is more useful for hackers: https://www.caymanenterprisecity.com/ https://www.caymanenterprisecity.com/ - 100% foreign ownership - No corporate/capital gains taxes - 5-year work/residence permits for the team -- No personal income tax in the Caymans for anyone moving here From a friend who has gone through the process of setting one up for consulting, the initial setup cost ~30k USD and renewal costs ~15k USD per year. - you still need an office package https://www.caymanenterprisecity.com/service-packages https://www.caymanenterprisecity.com/service-packages - setup is not really that quick and painless If you'd otherwise pay income tax pretty much anywhere else it might still make financial sense.

deleted 9y ago
[deleted]
mattsfrey 9y ago
US citizens still owe taxes on any income over a certain threshold as per: https://en.wikipedia.org/wiki/Foreign_earned_income_exclusion https://en.wikipedia.org/wiki/Foreign_earned_income_exclusio... There is no more tax advantage to the law abiding citizen in this scheme versus just registering an llc in wyoming/nevada and living abroad.
- rdrey 9y ago
  law abiding *US citizen, but yes.
  - mattsfrey 9y ago
    Which is why I started my comment with "US citizens.." but also, if you're not a US citizen (for most countries anyway) you can register a corporation in a dozen other tax havens and avoid any taxation without those ludicrous fees given you are living abroad.
    - rdrey 9y ago
      If you can pull off the tax-nomad thing. There are fewer places in which you can basically "buy" work permits and live income tax-free semi-permanently. (The Caymans will "roll you over" / send you home for a year after 8-9 years if you don't apply for Permanent Residence (more expensive).)

MikeEhrmantraut 9y ago

I'm curious if any HNers have any ideas for ways to use off-shore status to protect your website from frivolous libel claims. I run some forums in the automotive industry that have been around for about 15 years. I take pride on being pro-free speech and loosely moderating things, only taking down obviously illegal posts, copyright infringements, etc. Despite that, I still occasionally get legal threats from people who have gotten their feelings hurt. In one case, the threats came from an actual attorney who was representing a shady commercial seller who got into it with some of our members. I would love to move the ownership of the forums to some sort of arrangement (offshore) where they are essentially immune to frivolous libel claims. I want attorneys to look at us and tell their clients that it's simply not worth going after us. Is there such a place? edit: I forgot to mention that my site runs no ads and makes no money whatsoever...a rarity in the forums world. I keep it like this because I love the hobby and I hate all of the other shitty forums sites that are filled with adware garbage. Given this, it's a real hardship when some attorney threatens me with a lawsuit because I just don't have the cash to properly defend myself.

myrryr 9y ago
New Zealand? The courts here are pretty sensible. They have 0 issues with telling someone they are just being silly and to leave. They can still bring a case against you - but, it isn't expensive to defend like the US is.
- mirimir 9y ago
  Didn't protect Kim Dotcom.
  - function_seven 9y ago
    OP isn’t looking for shield from the US Government. Your “didn’t protect” comments aren’t really relevant.
  - MikeEhrmantraut 9y ago
    In my case, I'm not involved in any copyright infringement. I'm merely trying to protect myself from frivolous libel threats. The problem with these threats is that you're forced into making a choice: spend real money to defend yourself (my site makes no income) or give in to the assholes and take down posts. When the disputed post concerns a shady for-sale transaction, removing the post effectively whitewashes the shady seller's reputation and potentially exposes innocent future buyers to getting hosed. It's a crappy situation and I just want to be immune to it all.

eloff 9y ago

So $700 for setup and $3300/year? It's way, way cheaper to do this in Panama, same tax advantages, and the country uses the US dollar.

bigtones 9y ago
Panama has corporate tax of 25% and personal income tax rate of between 15% and 25%, Cayman islands has zero tax.
- eloff 9y ago
  Panama has zero tax on foreign source income, which unless you're going to open a local business, means it has effectively zero tax - personal or corporate.
  - StavrosK 9y ago
    How much are formation/annual fees for Panama, do you know?
    - eloff 9y ago
      About $1000-$2000 for initial setup if you use a law firm to do it for you. $300/year if you registered it as offshore, meaning you don't do business in Panama. In that case you do not even need to file taxes. Otherwise you have $65 filing fees for taxes as well, which you just declare the company as offshore, and have no taxes owing.
      - StavrosK 9y ago
        Oh huh, that's pretty cheap. Cheapest I've found in the Caymans is $2500 setup and $1500/yr, and many lawyer firms rip you off by billing you hundreds of dollars to give you unsolicited advice (yeah, it's that bad). Panama sounds like a much better idea, unfortunately it's impossible to get Stripe/another processor for a company outside the EU/US.

sargun 9y ago

So, dumb question. One of the biggest impingements upon grey businesses (prostitution, pornography, imitation goods, gambling, social media profiles) is payment processing. Now, VISA, AMEX, etc.. will never want to process these payments. If the Antigua, The Cayman Islands, or Panama have a healthy banking system, what prevents someone from setting up a VISA clone there? As a service provider, if you can work in their banking system as a legitmate bank, all you need is client banks -- And getting a bank account there is reasonable easy from my understanding. Similar to: https://en.wikipedia.org/wiki/E-gold https://en.wikipedia.org/wiki/E-gold https://en.wikipedia.org/wiki/E-Bullion https://en.wikipedia.org/wiki/E-Bullion Could you build a similar model to "GoldMoney" (https://en.wikipedia.org/wiki/GoldMoney https://en.wikipedia.org/wiki/GoldMoney) without KYC?

JumpCrisscross 9y ago
> Now, VISA, AMEX, etc.. will never want to process these payments Lots of legitimate business happens through the Caymans (for international finance) and Bermuda (for insurance). Wiring U.S. dollars between the Caymans and New York is instantaneous.
- Mandatum 9y ago
  This used to be true as they'd modernised their banking systems very early compared with many heavily-regulated countries and companies. However this is no longer the case, technology and platforms exist for similar speed and security offered by the aforementioned nations. The only real exceptions are countries currently embargoed or labeled as a "risk" by the IMF for money laundering.
um_ya 9y ago
If I'm not mistaken, Gold and silver is considered money under the US constitution, not a commodity... You would have to use something like Bitcoin or some other commodity.
colechristensen 9y ago
The idea is for the money to get out of and back into the US financial system. The courts will stomp on whomever is facilitating the illicit payments and making that connection. Anti-money laundering regulations and regulators are competent and experienced. If you want to start an online casino that just works for the cayman islands, sure. If you want it to work anywhere else you're going to have trouble.

Mandatum 9y ago

The data on places to incorporate are slowly becoming more and more open. Generally you incorporate off-shore for one to many of these three reasons: tax minimisation, privacy and corporation structuring. For most people, an LLC in New Mexico, US (provided you are able to enter the US) with a parent company in the BVI is the easiest option. Overall this will cost you less than $1,000/yr to operate as an LLC with none of your identification or documentation on it, bank accounts and services available in a first-world country, however operating as a proxy corporation for a BVI-based company therefore not subject to corporation tax. However there are risks associated with this setup, plenty of people have had bank accounts frozen or assets seized temporarily if their accounts are included in a "probably tax evader or drug cartel" report. So it's suggested to never keep funds in your US-based corporation. Use a reputable, US-based accountant for your annual filing to minimise this risk. If you're not a US citizen or resident, the only risk is the possibility you won't have access to your funds for a long period of time (and you'll likely have to fly back to the US to sort things out). Now, what I've written above is technically legal provided you're not a US citizen, or if you aren't obligated by law to pay federal or state taxes. However, it - and many, many similar structures are used every day for corrupt, illicit and morally bankrupt reasons. Nobody is interested in fixing this. We've put in Anti-Money Laundering and Know Your Customer regulations whilst simultaneously PROVIDING ways to make sure people can still get away with tax evasion and hiding dirty money (US: insane protection for corporate entities, UK: owning and operating some of the largest tax havens in the world). As the world begins to wise up to these methods, we're already seeing other super-powers begin to offer the same and in some cases much better services. Taiwan and China, I'm looking at you.

philfrasty 9y ago
„...or if you aren't obligated by law to pay federal or state taxes...“ this is the key sentence here and mostly not talked. Many people do not understand that you may have to pay income tax even though a foreign company/entity holds all profits/cash/assets. For Germany see the „Außensteuergesetz“ https://www.gesetze-im-internet.de/astg/__7.html https://www.gesetze-im-internet.de/astg/__7.html