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| Offshore
Web Hosting An Introduction: What it is, how to use, why you want to |
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| What
If Bill Could Move His Business To Panama Without Moving From His Easy
chair? |
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| Bill
makes his money from his website, and his website is hosted at a local
Denver, Colorado ISP. Bill uses a downtown Denver bank for merchant
services, so that he can bill his customers over the internet. The
government of the country in which Bill lives, (USA) has absolute access
to Bill's ISP, and to Bill's bank account. Bill lives in a country that
does not respect privacy. |
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| If
Bill had his website in Panama, and if Bill used a Private Panamanian or
Caribbean Bank Account for his banking and merchant services, then no government
agency could enter Bill's ISP, nor Bill's bank. In Panama the law
protects banking privacy with banking secrecy laws, and the law protects
websites with internet privacy laws. |
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| The
Cat Is Out Of The Bag! |
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| Further, if
Bill incorporated in Panama, Bill would be doing the entire thing legally.
There is no essential difference between a Fortune Five Hundred Company
and Bill when it comes to the advantages of strategically locating one's
business jurisdiction. Up until now the smaller player was simply locked
out of the club. The internet changes all that, allowing anyone,
to make a living from anywhere. |
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| Example:
Bill forms a International Business Corporation in the British Virgin Islands,
(Bill doesn't have to travel to the BVI to do that, he can do it over the
internet.) Bill places his website in Panama at the new private high speed
facility, (See resources) and he uses a bank in Switzerland to do his banking
and merchant services. The company Bill forms, we'll call RealSmartt
Software Inc. (a factitious name.) |
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| Who
gets taxed? Who does the taxing? |
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| He is not
earning his income in the British Virgin Islands, so the BVI won't tax
him. He is not earning money from Panamanians, so Panama won't tax
him, and he is not earning money in Switzerland, so Switzerland won't tax
him. |
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| Because
Bill is an American citizen the USA can tax Bill the moment he takes any
of the money from the corporation as personal income. If he takes
less than $80,000 per year as personal income current law allows Bill to
take that money tax free. He must file his taxes and ask for the
expatriate deduction. If Bill's name is on the board of directors
of the Corporation it is important for Bill to know that the IRS requests
that the ownership of a foreign IBC by an American is to be reported to
the IRS. There is a check box on the standard 1040 income tax form
which can be checked to indicate the ownership of a foreign IBC.
The IRS is happy when Americans check that box as they have no other way
to know about the existence of an offshore corporation that has been set
up properly. |
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| To
understand more about offshore IBC's and differing ways to use them see,
"Zero Taxes for Expats" in this issue and also "Offshore Corporations:
Dismantling The Hype" – Bill would legally owe taxes on any personal income
he took out of the company, but the system for determining how much he
can take out and how much he would owe is as convoluted as the IRS Tax
Code. But before we start trying to worry about who wants a slice
of our cake, let's add more frosting. |
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| Your Corporation
Can Have An Offshore Brokerage Account, Own Offshore Real Estate &
A Lot More |
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| Yes,
your International Business Company (IBC) can have its own offshore brokerage
account, in the name of the corporation, own real estate anywhere in the
world, in the name of the corporation and allow you countless additional
benefits. How would it work? |
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An
International Business Corporation is viewed as an entity. If Bill used
a Panamanian IBC he would enjoy the following benefits:
Bill's tax
base would look like this: Panama is a 100% Tax Haven: Non-resident Panamanian
International Business Corporations (IBC's) and Private Interest Foundations
do not pay tax to Panama on any of their income (as indicated below), nor
do they have any reporting requirements to the Panamanian government. |
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| Bill's
Tax Base In Panama Would Look Like This |
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. No tax reporting
requirements.
· No
income tax.
· No
capital gains tax.
· No
interest income tax.
· No
sales tax.
· No
tax on issuance of corporate shares.
· No
tax to shareholders.
· No
stock sale or transfer tax.
. No capital
stock tax.
· No
property tax.
· No
estate tax.
· No
gift tax.
· No
stamp tax.
· No
succession tax.
. No inventory
tax.
. Easy to
set up. |
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| What
is crucial to understand is that this also applies to anything owned by
the IBC, including real estate, a Panamanian brokerage account, a website,
a boat, or you name it. (See "Earn Up To $80,000 Abroad Tax Free
- Keep The Rest in an IBC" in this issue). |
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| Further,
Bill can live anywhere in the world and make use of this favorable business
structure. If Bill lives in France, (for example,) Bill can enjoy
an apartment in Paris, a farm house in the south of France or a beach house
on the Riviera, all held in the name of his IBC. The reason Bill can live
where he wants to live is because Bill's company is a virtual company that
exists in a virtual tax haven. If Bill was like Joe, Bill could relocate
his manufacturing company to the new superport free trade zone in Panama
and operate tax free. More about this in another chapter in this section
entitled, Explaining The FTZ - An Introduction - |
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| More
Perks |
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| In
addition, Bill can declare himself a consultant to his IBC, set himself
up an expense account, have the IBC issue him a debit card with which he
can access funds from the IBC corporate account to use for minding the
affairs of the Company. |
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| Because
the debit card is a corporate issued debit card, issued to RealSmartt Software
Inc., it is not registered to Bill, but to the company, which provides
greater privacy for Bill. So Bill enjoys the same privacy, protection and
favorable tax benefits as Joe, even though Bill's company is wherever Bill
is. Joe has his operation in Costa Rica, Bill has his business in
cyber-space and enjoys the benefits of having a virtual company in a virtual
tax haven. The company's earnings from the offshore brokerage account remains
entirely tax free. |
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| Does
your current government have the right to freely enter your web hosting
company and gain access to your website? Of course, especially if you
live in the USA. If your website isn't private, then your business is open
to the scrutiny of every monetary predator who wants to access your database. |
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| Does
the Panamanian Government have access to anything belonging to RealSmartt
Software Inc.? Panama has never rolled over on anyone.
It is the one tax haven that has never allowed access to its banks, nor
ever violated its own secrecy laws. That is why you are hearing so
much about Panama these days. The answer is that as soon as you put your
website in Panama you will have website and eCommerce privacy. |
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| Does your
current government have the right to freely enter your bank and gain access
to your banking records? Of course, especially if you live in the USA.
If your bank isn't private, then your business is open to the scrutiny
of every monetary predator who wants access to your money. (And you'd better
believe it happens every day). |
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| Panamanian
Domains |
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| Panamanian
domains: there are a lot of them, perhaps exactly the name you want. Why
aren't they being advertised? The government of Panama gave the domains
and the profit from the domains to the University. |
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| The
system for purchasing the domains more or less requires that you apply
in person and they are slightly more expensive than standard domains.
We believe that Panama domains may become the domains for offshore eCommerce.
Our new web hosting company will soon have them available for online order. |
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