Offshore Web Hosting
An Introduction
Rolf Müller Talks About
Offshore Web Hosting ~ What it is, how to use, why you want to
By Rolf
Müller
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| This article should not be construed
to be a recommendation to evade taxation, as that is not the message.
This artice is meant to convey the methods of structuring legitimate offshore
eCommerce in such a way so that taxes are limited to personal income and
so that corporate profits can enjoy the benefits of a preferable tax jurisdiction
for online eCommerce. Readers are advised to consult the appropriate authorities
in their individual nations to determine the laws of their nation.
No one knows the laws of every nation, we do not pretend to. This
article is not intended to be legal advice. Period. The nature of the information
in all of our articles is intended to provide accurate and authoritative
information in regard to the subject matter covered but because the legality
of the information presented differs from nation to nation we make no claims
as to the legality of the information presented - For clarification we
request that you please read our <
Disclaimer
> before reading this article. |
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| Rolf Müller - Rolf Müller
is a free lance writer with a good understanding of offshore matters. Rolf
Müller - Was born in Kiel, Germany. An active libertarian he
moved to the USA in 1998 and left one year later. He now lives in
Latin America and sends articles to EscapeArtist.com on offshore matters
- The opinions of Rolf Müller do not necessarily reflect the opinions
of EscapeArtist.com nor does EscapeArtist.com accept responsibility for
the opinions of Rolf Müller ~ |
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| Joe manufactures computer
chips in Costa Rica. His company is in a Costa Rican free trade zone
and he has preferential tax treatment. In the USA, Joe was making one third
of what he makes in Costa Rica due to the higher wages he had to pay in
the USA. In addition to making a bigger profit in Costa Rica Joe gets to
keep everything he earns because his company is an offshore company, just
like the Fortune Five Hundreds.
Bill lives in Denver, Colorado and
writes software. Bill makes his money from his website. Bill sells his
software over the internet and it sells well. Bill is tried of paying
out 40% of his hard-earned money in taxes. He has heard about going offshore,
but cannot see how it applies to him, he earns his money in the USA; even
though most of his customers are in Europe, his company is in Denver.
He would like to send some money to a tax haven and open an offshore brokerage
account, so that he could at least build a nest egg for the future, something
saved for the future beyond the eyes of Big Brother and beyond the reach
of monetary predators. He is aware that if he sends money overseas he is
supposed to report the fact of doing so. Bill doesn't know what to do.
If he can't send money overseas, he will always be at the mercy of a crumbling
system. Quite frankly, he doesn't like the mood in America, he feels his
government is lying to him and he would like to figure a way to break loose,
but not at the cost of losing everything.
The basic difference between Joe
and Bill is the jurisdiction in which they do business. Joe manufactures
computer chips in a free trade zone, which was created through legislation
to attract investors, that 'no tax' zone is his legal jurisdiction. Bill
lives in a jurisdiction which does everything it can to enslave and trap
investors, and then proceeds to levy usurious taxation on the enslaved. |
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What If Bill Could Move His Business
To Panama Without Moving From His Easy chair?
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.
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.
The Cat Is Out Of The Bag!
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.
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.)
Who gets taxed? Who does the
taxing?
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. 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.
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" –
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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" - Also, don't forget to read our
Disclaimer.
- - If you are silly enough to assume that we don't make mistakes you should
read our disclaimer twice. To assume that we don't make mistakes is to
assume that we are omnipotent, which I can assure you we are not. |
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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.
Your Corporation Can Have An Offshore
Brokerage Account, Own Offshore Real Estate & A Lot More
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?
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.
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. |
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| . 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.)
| 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 -
More Perks
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.
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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Q: Does your current government
have the right to freely enter your web hosting company and gain access
to your website?
A: 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.
Q: Does the Panamanian Government
have access to anything belonging to RealSmartt Software Inc.?
A: 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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| Q: Does your
current government have the right to freely enter your bank and gain access
to your banking records?
A: 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.)
Panamanian
Domains
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. 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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