{"id":12099,"date":"2017-06-14T05:57:47","date_gmt":"2017-06-14T09:57:47","guid":{"rendered":"http:\/\/www.escapeartist.com\/?p=12099"},"modified":"2020-06-03T02:08:03","modified_gmt":"2020-06-03T06:08:03","slug":"get-heart-active-offshore-business-taxation-2","status":"publish","type":"post","link":"https:\/\/www.escapeartist.com\/blog\/get-heart-active-offshore-business-taxation-2\/","title":{"rendered":"Get to the Heart of Active Offshore Business Taxation"},"content":{"rendered":"

The following is a guest post by Attorney Joel Nagel on offshore business taxation. <\/span><\/i><\/p>\n

Question<\/i><\/b>: What are the tax considerations for having a U.S. owned offshore business?<\/span><\/i><\/p>\n

When thinking about <\/span>active<\/span><\/i> offshore business taxation and how to plan an international operation, there are three tracks to consider: <\/span><\/p>\n

    \n
  1. U.S. owned businesses with no employees abroad (shell companies),<\/span><\/li>\n
  2. U.S. owned businesses with employees abroad (offshore businesses), and<\/span><\/li>\n
  3. Foreign joint venture where U.S. person(s) own 50% or less. <\/span><\/li>\n<\/ol>\n

    This article is on the taxation of active offshore businesses. It does not cover intellectual property or passive income. <\/span><\/p>\n

    A \u201cU.S. owned business\u201d is one where U.S. citizens, residents, or green card holders <\/span>own or control <\/b>more than 50% of the company. <\/span><\/p>\n

    Ownership<\/span><\/i> means U.S. persons directly or indirectly (through family or structures) <\/span>hold the stock of the company<\/b>. <\/span><\/p>\n

    Control<\/span><\/i> of the business means <\/span>voting rights or other measures of control<\/b>, such as directing transactions, controlling distributions, etc. <\/span><\/p>\n

    \u201cControl\u201d is meant to target offshore businesses set up with nominee shareholders, officers and directors. This is where the true beneficial owner doesn\u2019t appear in the corporate documents but is pulling the strings behind the scenes. <\/span><\/p>\n

    Let\u2019s Get to the Heart of Active Offshore Business Taxation<\/b><\/p>\n

    When U.S. persons own an offshore corporation, and it has no employees and no operations abroad, we call this an <\/span>international shell company<\/b>. <\/span><\/p>\n

    Shells are offshore corporations used for <\/span><\/p>\n