I’ve searched the forum but didn’t see anything specifically about the kind of advice I’m looking for
I am looking to set up an offshore holding company so I could bill my consulting fees to clients in China as well as Taiwan. A good friend suggested I incorporate in Western Samoa and set up my bank accounts in HK
So in my research of offshore incorporation, I have spoken to 2 firms: OrangeField and OIL (Offshore Incorporation, Limited, I think)
OrangeField requires a personal referral and then charges $2,500 for initial set up + $850 for annual maintenance of Samoan companies. OIL is willing to set up a Samoan company for me sight unseen for $700 startup and $550 annual maintenance. Other corporate functions (corporate secretary filings, change of company directors) carry additional costs for both. NOTE: I’m not talking to shelf companies that can be provided immediately (and at extra cost, undoubtedly - these prices are for Samoan registrations which take 10 days to 3 weeks due to mailing). Why such a big difference in prices?
Does anyone here have any experience setting up with either OrangeField or OIL? Your advice would be highly appreciated
I know about OIL because when a friend of mines has set-up a offshore company (through some accountant) all documents came from OIL. I didn’t know it was possible to directly deal with them, I thought they provide services to accountants/lawyers…anyway, their service was good, but I’d advice you to deal with your local accountant, even if it might raise the price a bit. Better to have someone to talk to “face to face” and know where your money goes.
Now, something kinda bugs me a bit…I don’t know about customers in Taiwan/China but I know that here in Europe many people/companies would never deal with a company based in a tax-haven for fearing money laundry accusations from their local tax agency.
Other problem, most of the tax-haven based companies have a PO Box as address and that doesn’t…how to say…doesn’t look really “serious business” on name cards or invoices…you might have to lie to your customers…
Are you really sure you want to set-up your company in a tax-haven? And really sure about Western Samoa? There are some places in Europe that might be more suitable. And since you’re in Asia, did you consider setting-up your company in HK? Tax are rather low there.
By the way, talking about HK: beware, it’s getting difficult to open bank account there. Used to be piece of cake, but no longer. If you’re in Taipei and can drop $1,000USD you should perhaps consider opening some OBU (Offshore Banking Unit) account in some local bank. My friend used to have such account at Cathay United (the one not far from 2-28 Park), once he had all suitable documents it took him 20 minutes.
I know about OIL because when a friend of mines has set-up a offshore company (through some accountant) all documents came from OIL. I didn’t know it was possible to directly deal with them, I thought they provide services to accountants/lawyers…anyway, their service was good, but I’d advice you to deal with your local accountant, even if it might raise the price a bit. Better to have someone to talk to “face to face” and know where your money goes.
Now, something kinda bugs me a bit…I don’t know about customers in Taiwan/China but I know that here in Europe many people/companies would never deal with a company based in a tax-haven for fearing money laundry accusations from their local tax agency.
Other problem, most of the tax-haven based companies have a PO Box as address and that doesn’t…how to say…doesn’t look really “serious business” on name cards or invoices…you might have to lie to your customers…
Are you really sure you want to set-up your company in a tax-haven? And really sure about Western Samoa? There are some places in Europe that might be more suitable. And since you’re in Asia, did you consider setting-up your company in HK? Tax are rather low there.
By the way, talking about HK: beware, it’s getting difficult to open bank account there. Used to be piece of cake, but no longer. If you’re in Taipei and can drop $1,000USD you should perhaps consider opening some OBU (Offshore Banking Unit) account in some local bank. My friend used to have such account at Cathay United (the one not far from 2-28 Park), once he had all suitable documents it took him 20 minutes.
Caroline[/quote]
Thank you, Caroline, this is very helpful
Western Samoa is desirable because it is more private than other tax havens and still relatively easy to set up. The company offices may be established in HK - by OIL or other registrars - so clients do not have to know you are Samoa registered. I wouldn’t necessarily use this for client facing business, but rather for ownership purposes (the Samoan firm would be a holding company)
One last thing about OIL, seems they have some office in Taipei offshore-inc.com/index.php?_ … ew=detail&
6th Floor, No. 181, Sec. 3, Minquan East Road, Taipei 105, Taiwan
Tel: (886) 2 2718 2222 Fax: (886) 2 2719 7651
Ed -
Years ago. late '70’s thru early '90’s, I set up a company in Panama for very similar reasons. Completely legit and above board, by the way. It worked very well and was easily accomplished through a law there who specialized in this service for expats who wished to be paid outside of the US. I then had monies deposited into banks located there and made withdrawls through their branches in the US close to where I lived - San Francisco.
I have recently spoken with an aeronautical engineer and while discussing the current state of Panama he assured me that the banking services industry there is quite stable. It is a bedrock of their country and something they wish to keep safe and secure. They comply with all international transparency treaties.
You might wish to look into this service there.
Belgium is also well known for this type of business.
With the internet and almost instantaneous communication, physical location is less and less relevant. But reputation is. And, of course, compliance with all legal requirements.
[quote=“ed”]
Thank you, Caroline, this is very helpful
Western Samoa is desirable because it is more private than other tax havens and still relatively easy to set up. The company offices may be established in HK - by OIL or other registrars - so clients do not have to know you are Samoa registered. I wouldn’t necessarily use this for client facing business, but rather for ownership purposes (the Samoan firm would be a holding company)[/quote]
Well, I don’t exactly know about the nature of your business but as far as I know, offshore revenue are tax-free in HK (problem is: you have to be able to prove it was indeed offshore revenue )
Most tax havens are private, or else they would no longer be tax havens as foreign governments would easily get the list of who’s owning what and send their tax-services to knock at many people’s doors.
The company I’m working for does own a offshore branch, but for really specific purpose. We are dealing in clothes, both wholesale and direct sales. We use our local branches for wholesale market, so we don’t have to lie to our clients (shops). We use the offshore branch to deal with direct sales (from our website). This is a very transparent process, the only difficult thing was the credit card processing service but our accountant found a solution.
Of course we are selling goods and not services, and goods we sale through the internet go to end-users. Even through the net it would be fairly different if we had to deal with shops.
You could also contact Sovereign Trust in Hong Kong. They also provide much the same service.
They along with most service providers would be able to assist in helping you setup a company bank account, I would suggest HSBC in HK.
These days don’t expect much or rely on secrecy, even though the country you setup in may suggest that they will keep details secret, all banks these days will ask for personal details of directors and shareholders (they say as part of anti-money laundring laws). Though you can pay extra for the provision of directors & even I believe ownership.
That said an offshore company can be advantagous for tax purposes. But go into it with the right mindset. There is a difference between tax avoidance and tax evasion. To keep yourself out of trouble a few things may be helpful.
Don’t treat the company account like your personal ATM machine. Biggest mistake many people make…
Your contract with your current employer should be changed to a contract between that company and your own company.
Bill the consulting fees from your company.
Although you are usually not required to file company accounts annually with an OBU try to keep accounts/records upto date, even if only for your own use.
Pay yourself a token salary to support you living expences. Write an employment contract between you and your company.
Pay personal local taxes on that income/salary. (though if you are travelling frequently outside TW you may be able to proove that the income is from outside TW and not liable to tax here).
Allow the capital to build up in the company, it does not matter as the region you open in would likely have no income or capital gain tax on income outside the country.
The trick then becomes getting the money back out in legal ways, while trying to limit your tax liability. Remeber legally as soon as you touch the money you are likely to be liable to tax on it. Of course you can just not pay tax on it, however that may catch up with you one day so it is best to try to tip toe around the laws legally.
For instance when operating a company there are general expences ie: mobile phone bills, meals, flights, entertainment, new PC, etc. submit invoices to your company like you would if you were working for someone else.
You could pay yourself a dividend, however likely you would be liable for tax on this.
You also don’t need to rush to get cash out of the business, spare cash can be invested.
Excellent advice - thank you! I’ll read up more on both Panama and Sovereign trust
Connel, I appreciate the tips on how best to use the offshore company as a consultancy. My original purpose was to set up a holding company, which would represent my interest in a start-up project (the operating company). This way, my holding company is the shareholder in the start up and my privacy in that operating company is preserved
But you have made me wonder if I should also use the offshore company to go freelance and bill my company my salary instead. Is there a standard contract anywhere for this type of purpose? Just what I could use a NoLo book for
Thank you for making me think about this - it’s very exciting
An OBU is a foreign currency bank account in a local bank. It stands for Offshore Banking Unit.
I do not think the reason for the tax avoidance is intrinsically because it is an OBU. You should still be subject to Taiwan taxes, for example. As Taiwan signs more tax treaties with other countries, this should also expose OBU holders to their home countries at some point
Also a question about this…looking to do the same thing as the original thread poster, and as per nivek’s outline. I am a freelancer and work for clients from all kinds of clients. I hope to set up a company in HK. I am arriving in Taiwan next month, but I wonder how I should handle things in regards to my personal salary I would be paying myself from my company. I guess I would have to technically pay tax on this if I reside in Taiwan for longer, but since I plan on living visa-exempt first, would this even be possible given that I would not officially be a resident?
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