Offshore Tax Haven Review: Why You Shouldn't Form a Company in the British Virgin Islands? (BVI)
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- čas přidán 17. 07. 2021
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We are starting a new and exciting series on this channel - Offshore Tax Haven Reviews.
We will talk about famous (and less famous) offshore tax havens, talk about their benefits and downsides.
To start off this series, we'll be discussing well known British Virgin Islands (BVI). BVI is probably the first place that comes to the minds of many people when someone says ''offshore'' or ''tax haven''. Traditionally this was a good solution to many, but I rarely recommend it. Why? Why should you avoid BVI as an offshore tax haven? And what was BVI famous for? Let's see!
BVI was traditionally famous for offshore company formations. I personally never liked it, even in its glory days. Back in the day, this tiny jurisdiction had 625 000 businesses registered there!
BVI had great laws, but the costs were too high. I could achieve the same thing with another jurisdiction and pay only a fraction of the price.
This traditional offshore tax jurisdiction is not soo useful anymore. In 2015 as FATCA, information sharing and later CRS came in banking became much more difficult.
Today it is extremely hard to bank with BVI companies, as they have shady reputation. This jurisdiction is flat zero tax. However, you will not be able to do much there, as you won't be able to bank, you won't be able to hire many people locally, etc. If you really want a real company it will be quite hard over here.
Local rules got much tougher under global pressure, and now you have to set up a proper business and operations locally. Naturally, all this pushed many businesses out of this country. On top of this banking is quite bad, and you will not be able to open a bank account in any reputable bank!
The British Virgin Islands is an outdated jurisdiction! With all the other (better) options available in the world today, there is not a single reason for you to form a company in BVI.
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Thanks for the vid... I would like to hear your thoughts about the paraguayan residency
You're welcome!
Thank you for the suggestion. We'll see what we can do👍
MORE OF THIS!!
Do more of these. A+
Michael, could you please do a video on what's your recommendation for offshore company location that also doesn't require annual filings BUT is easier for opening bank accounts?
Hmm, we'll see what we can do.
In the meantime, you can check some of these:
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@@OffshoreCitizen yes please, i live in a country that doesnt offer paypal, so my main reason for wanting to register my buissness in bvi or anywhere offshore is to get paypal 😑
Is there a job on the island of Tortola, such as restaurants? How much is the monthly salary?
What do you think of Nevis?
Thats for the video, very useful. I came across this as I am about to set up a BVI BC for an NFT company, however, I am now wondering of that is the best country and if you could suggest a better location?
Please send us a message through www.offshorecitizen.net
As part of our structuring, we are purchasing a large catamaran - What are your thoughts on using Cayman for this as we will need banking to run the boat internationally.
Very nice! It could be an option but depends on a variety of factors plus budget
Do they allow setup of online casino business in BVI
It may be useful as a holding company jurisdiction in the right scenario, like one in which your operating company could easily payout dividends in crypto currency to the holding company & in which you could easily take out dividends from the holding company in crypto.
Sounds interesting.
Do you have any experience with that/know anyone who's done it?
@@OffshoreCitizen no, but I see one other potentially useful aspect for a BVI company owned by an American treating it as a pass through entity while the owner/investor is paying a development team through an independent contractor to create software for a successor company to the BVI company that will start operations later. I mean it is easy enough to sell the software as an asset to the new company, do a merger, or re-domicile the company later. Keeping the ownership as much as possible in the hands of a non-US entity to avoid the new tax rules on the sale of US owned IP to foreign corporations would be helpful. I see it using an EMI like Wise in this scenario to pay an independent contractor to create software on a work for hire basis in this scenario with the copyright vesting in the BVI company which wouldn't be subject to substance requirements as I understand it because of the US check the box election. I mean it would be nice to use the IRC 179 election to write off development costs of software that will be owned by a foreign company. You can then transfer ownership of the IP to a Cyprus or Hungarian company, get a Malta Global Residency for your new Antigua citizenship, along with a work permit as a director of the company. That team of Independent contractors who developed your software could be in Georgia or just about any other jurisdiction with a reasonable permanent establishment exception for independent agents with Malta and/or Cyprus and keep the follow on company out of the tax net. Then of course the sales and marketing team for the company would need to be hired in the Isle of Man, Guernsey, Jersey, the Cayman Islands, the BVI, Turks and Caicos, the Bahamas, Anguilla, or any combination of those BOTC, Crown Dependencies , or zero tax jurisdictions with rules that make it clear tax residency will remain in Malta and the zero rate will apply for any profits assigned to those permanent establishments. Of course keep a minimal management team in Malta to ensure the dividends you pay out are coming from the foreign accounts and funds never remitted to Malta. I mean in this scenario you could do pretty well paying 15,000EUR a year in tax to Malta and live just about anywhere in the world most of the year tax free, so long as you didn't end up in any country other than Malta's tax net.
If I have a lot of money where should I keep it all obviously not in the states
Do you think that Florida state has a low taxes rate for companies ?
Well Florida as a state is good for tax but you've still got the federal tax
BVI funds on another level though (with respect to banking)? Number 2 behind Cayman in the fund world. I've also read Hong Kong and Singapore for BVI. Also Taiwan, DR and Liechtenstein seem willing (but expensive services).
You'd be mad to register in Hong Kong these days, hence so much investment has been lost due the PRC laws passing during COVID.
Hi, I am an hospitality consultant going into business with a BVI company. Therefore looking into options of opening a business and bank account in the BVI. Does that make sense or should I still opt for another country to open the business and accoung?
Hello
You can set up here in BVI
Does the BVI option still not provide any information to other countries about companies which are created in BVI?
Complex question, they now have much more info but what info is available to who and under what circumstances is the key distinction you sort of need to get granular
BVI companies are now required to prepare and file with their registered agent an “annual return” containing a basic balance sheet and income statement.
Thoughts on North American (American or Canadian) family doctor relocating to BVI in order to create a private clinic to serve expats or whoever can afford it?
Would there be enough interest?
Not my area of expertise. It's a small market but not sure what critical mass is
As a stock trader (NYSE) would you have to pay capital gains tax in BVI
If you live there and aren't an American then no. For a company it depends on substance.
Thank you for the video. Which country is a better place for an offshore company (consulting services) considering tax and banking?
There's no one size fits all it depends on your situation. Best is to book a call to discuss for you to go over personalized details
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If I open a BVI Company, as a US Resident, will I have to still pay Taxes on the profits that my prop trading company makes
This is a complex question that involves a variety of factors so the best is to book a call to discuss details.
The short answer is you can't avoid the taxes simply by forming a BVI company, with other factors you might be able to avoid a portion of it.
The Seychelles are very interesting. Please cover them.😊
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Thanks I learnt that the hard way. So where can we open a company with zero tax and can have a cheap bank account?
Well let's keep in mind taxes have to do with much more than where the company is formed but typically Cyprus, US LLC or Cyprus would be possible starting points to look at
As a tax advantage can you recommend where to put my profits from my day trading crypto ?
What are your thoughts about Bermuda as a zero tax Haven?
Expensive... If you're going to live there it's fine, if not it is unlikely to be the best option
Hey Michael, I am new to the idea of off shore.. The main reason I am interested is to get away from Capital Gains. I want to set up an off shore company to buy and hold crypto assets and when the time comes to sell, I do not want to pay tax on it. What is your suggestion. Thanks
There's no one size fits all and the optimal solution depends on many details. I'd have to learn more about your specific situation first. Probably best to book a call and I'll be happy to assist
@@OffshoreCitizen Would love to hope on the phone. Where can I find contact information.
All the links are shared in the beginning of every video and in the videos' description
calendly.com/michael-rosmer
What is the alternative to BVI he spoke at minute 3:45?
There's no one size fits all, it depends highly on what you need, how your business works, etc
@@OffshoreCitizen it is not possible to understand what was said.
Qatar a Bahrain?
Hi bro I really want to give u a call ,,, but my question is ,, I’m from Canada Victoria bc ,,, I m a stock trader usually trade in us stock market ,, can I reduce my tax and pay 0%tAx using tax haven through your guidance,, if it is possible plz let me know ,, then I will book a call in next couple of days 🙏🙏🙏🙏🙏
Depends how flexible you're willing to be, your scale, and what you want to do with the money but in your situation tough without moving
@@MichaelRosmer yes bro without moving,, as my background I’m from India been in Canada since 2007 ,,
@@MichaelRosmer hey man on that note, what if I lived in a territorial tax country and I was a citizen of that country (and nowhere else) and I bought and sold US Stocks, would I be liable for capital gains?
Yeah i got a bvi. Hard to get a bank account
Can you share more about your experience?
@@OffshoreCitizen its like you said everyone declined me a bank account and everyone asks whats your tax id and i have to explain bvi doesnt have tax or ids every time. Next i got a usa llc... much much better in every way.
Cs
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