advice To Register a Company in Cayman / Bermuda / Luxembourg

[GoWeb]

Anyone has any pointers to registering an online business firm (Domain Trading Co.) in Cayman / Bermuda / Luxembourg / Singapore / Mauritius (Offshore Tax Havens) !!??

Frank Schilling was smart to move to Caymen right at the start of his domaining career. He gets to keep nearly 100% of his profits, if not exactly 100%.

GoWebnames.com is coming up just fine and I am considering moving at one of these Offshore places at some stage of life but, regardless, I feel a company should be setup straight away.

I understand people in US can do that by incorporating in Nevada / Wyoming but here in India corporate taxation is mostly a federal subject at 30-35%.

To sell a good domain without it:
First you pay 15-20% to Sedo/GD, then you pay 20-40% in your home country taxes. You end up parting with 50% of your profits, just to reinvest in another domain.

Look at this data compiled from http://www.online-accounting-degrees.net/tax-havens/:

Now the questions:

1) Which is THE BEST place, other than Cayman, for an online business/ domaining company from a taxation perspective?
2) What are the costs assocaited with buying a RMC (Ready Made Company) at these places and is it safe and any online marketplace for this?
3) Can offshore bank accounts be opened here online or you need to pay a local visit?
4) Any people here incorporated in one of these places?
5) Being an Indian, and having travelled to many countries already, even though I feel at home in both Indian and eastern/western cultures, my first preference would still be Singapore / Mauritius since there is a lot of Indian culture out there. Any domainers from Singapore/Mauritius on the local tax perspective on domaining profits?

 

[Kate]

There's already an interesting discussion here: https://www.namepros.com/threads/incorporation-delaware-vs-caymans.884830

But there is no best place really: it depends a lot on what you want to do and your personal circumstances. Setting up a company is one thing, but there are also tax implications that must be addressed. I mean your personal tax obligations So it also depends on where you live. If you live in India, then perhaps the environment is not very business-friendly, but I don't think going offshore is always the solution. The US could do. Maybe.
Going offshore is always going to be expensive, so the stakes have to be high enough to make it worthwhile.
If you live in India, then you will still have to pay tax (at least on revenue derived India proper) in India since you are resident there for tax purposes.

If you are going to set up a corporation outside the scope of your country of residence, then you need to figure out a few things like: how you are going to pay yourself a salary or dividends, repatriate the funds, have them properly declared and pay applicable taxes. If you skip those steps, you need to understand the possible future risks.
In practice you could just draw money from ATMs with a debit card and tell nobody, but everything is increasingly being tracked.

It is important to structure the whole thing in a proper and legal manner, so you will need qualified advice from a CPA.

 

[GoWeb]

@Kate, I am well aware that as a resident you need to pay taxes in your home country.

In India, the rules qualify you as a Non-resident Indian, hence non taxable in India, if you are out of the India for a continuous period of at least 181 days in a year). So, even if you are holidaying outside India for half an year every year, you are technically an NRI and don't qualify for local taxes.

There is no issue with paying taxes if this is an occasional domain sale but when you focus on domaining as a business, you keep reinvesting the profits. The tax requirements here make that a messy affair.

The other problems we face in India are technical apart from the high taxation rate of 30-35% for a transaction which is already substantially taxed at 15-20% by the marketplace.

Wires get stuck often, even with Escrow.com, because the banks don't understand what domain selling is. For this specific purpose, I already have a general instruction on my escrow account to include the PURPOSE CODE, an Reserve Bank of India requirement, in all my wires. Still, I need to do the calling when they get stuck.

So, I would prefer an arrangement where I would draw only 10-20% of my profits every month as bonus and pay local taxes on that and reinvest the rest 80-90% in good domains to raise a good domain portfolio the size of few thousands initially.

 

[andom]

There is no issue with paying taxes if this is an occasional domain sale but when you focus on domaining as a business, you keep reinvesting the profits. The tax requirements here make that a messy affair.

Sorry if I ask but if you sell a domain for 100 and buy another for 90 during the same fiscal year, shouldn't you pay taxes only on the difference, 10 ?

 

[GoWeb]

Sorry if I ask but if you sell a domain for 100 and buy another for 90 during the same fiscal year, shouldn't you pay taxes only on the difference, 10 ?

Guess you misunderstood me, you pay tax only on the difference (10 in your quoted example).
But sometimes, the resale can stretch a little more than one fiscal year. And managing all that is going to be a headache when all you are doing is domaining round the year.

For businesses, there is another requirement of filing advance taxes every quarter which is a problem for a business like domaining. Then you can CLAIM back any income tax which you feel you may have overpaid which is again a problem. Carrying forward any losses is also a problem.

So, my point is to cut down the whole issue of over straining yourself on managing taxes by incorporate an offshore co. and paying the taxes only when you draw a bonus/salary. Probably that's why all the fortune 500's have offshore accounts to allow them financial freedom.

 

[andom]

Probably that's why all the fortune 500's have offshore accounts to allow them financial freedom.

Good point

 

[davidthornton]

There's already an interesting discussion here: www (dot) NamePros (dot) com/threads/incorporation-delaware-vs-caymans.884830

Shame it's hidden from view. I might have been able to contribute knowledge. It's bad enough that I cannot reply to any post that quotes someone else's link without having to purposely break the link (already reported this to support).

 

[Eric Lyon]

Shame it's hidden from view

It is in the Business Lounge. Only VIPs and business members may access it.

You may upgrade your account here to access it.

 

[frank-germany]

To sell a good domain without it:
First you pay 15-20% to Sedo/GD, then you pay 20-40% in your home country taxes. You end up parting with 50% of your profits, just to reinvest in another domain.

you end up with 15-20% not from profit but from gross revenue from Sedo/GD
so there maybe no profit if you are not calculating with awareness

but the good news is: then you don't pay 20-40% home country taxes

 

[domainerfella]

Hi Sunil

I hope you find what you wanted. Let me know, I will connect you with some of the industry veterans in India. Some of them have incorporated businesses from Singapore, HK etc., so this might help you. Also there is a smart phone based discussion group and a noted conference held every year. Next one is in Delhi.

@Soofi

 

[GoWeb]

@domainerfella, please PM me the name and contact no. of any indian domainers who have incorporated in Singapore/HK, that would be a great help !! I am in touch with Sai Pola for quite some time now and know him to not hold any such accounts.

And this is not the right thread for Domainx marketing though. I have been meaning to attend it but had some other engagements elsewhere.

 

[domainerfella]

@domainerfella, please PM me the name and contact no. of any indian domainers who have incorporated in Singapore/HK, that would be a great help !! I am in touch with Sai Pola for quite some time now and know him to not hold any such accounts.

And this is not the right thread for Domainx marketing though. I have been meaning to attend it but had some other engagements elsewhere.

I don't think I can give you any person's details because I or that person never know you. First you need to build relationships. So, getting in touch with the knowledge share group will help you IMO

 

[GoWeb]

I don't think I can give you any person's details because I or that person never know you. First you need to build relationships. So, getting in touch with the knowledge share group will help you IMO

domainerfella, this is a thread about a very specific question. Please don't start preaching. You seemed to have found out my first name, so you know enough to start at "hello" in PM.

I asked you for a contact in the PM since you replied here saying you know people who have this setup and you can help connect. How would anyone build a relationship on your suggestion when you don't even have a name to provide for it!!??

If you can offer no real help in the context of this thread, pls don't troll the thread.

 

[Name Trader]

Anyone has any pointers to registering an online business firm (Domain Trading Co.) in Cayman / Bermuda / Luxembourg / Singapore / Mauritius (Offshore Tax Havens) !!??

Now the questions:

1) Which is THE BEST place, other than Cayman, for an online business/ domaining company from a taxation perspective?
2) What are the costs assocaited with buying a RMC (Ready Made Company) at these places and is it safe and any online marketplace for this?
3) Can offshore bank accounts be opened here online or you need to pay a local visit?
4) Any people here incorporated in one of these places?
5) Being an Indian, and having travelled to many countries already, even though I feel at home in both Indian and eastern/western cultures, my first preference would still be Singapore / Mauritius since there is a lot of Indian culture out there. Any domainers from Singapore/Mauritius on the local tax perspective on domaining profits?

I just got around to looking at your message. That's how hectically busy I am. I'll try to answer your questions, but I see you've already found the other thread.

1. Best place for taxation purposes? Any place that doesn't charge any taxes, and doesn't have a double taxation treaty with India (meaning they have no reason to talk to the Indian tax authorities. And won't).
2. Prices vary quite a bit. The amongst the cheapest is Seychelles at approx $400. Places like Caymans are under $3k (from memory). Do your research. You also need their serves to introduce you to a bank $500+. Plus whatever the jurisdiction insists upon, like registered office, registered agent, secretary, and accounting and legal fees. Usually you pay everything annually except for the bank intro fee. No there is no online market place. There are many offshore formation companies. It's hard, to almost impossible, to distinguish the good and the bad.
3. The bank introduction fee usually means you don't have to visit the bank. The formation company will represent you. But not always. You need to read each companies fine print. I think the $500+ is overall a good deal. But buyer beware because it's not refundable. And there is no telling if the bank will/can provide the services you want at a price you'd like. Some jurisdictions will allow your representative to represent you. Sometimes it's upon the banks insistence.
4. Not that I know of.
5. The minimum deposits will get you. It's $30k when I looked at Singapore. I haven't really studied Mauritius. That could get really irritating looking at that sum in your bank account every month. But if you start dealing in multiple $100+k sales each month, it might not be such a big deal.

See my other thread for more information.

 

[Soofi]

Hi Sunil

I hope you find what you wanted. Let me know, I will connect you with some of the industry veterans in India. Some of them have incorporated businesses from Singapore, HK etc., so this might help you. Also there is a smart phone based discussion group and a noted conference held every year. Next one is in Delhi.

@Soofi

Not being devil's advocate but I think domainerfella is trying to say that you may have to build relationships through Networking for people to share such an information gowebnames.

I know few ppl as well who have incorporated but without their consent I think it won't be feasible for me to publicly or privately disclose their names.

Rest, if you have a registered Indian company, process becomes quite easy for you to get a HK bank accounts etc..

 

[domainerfella]

domainerfella, this is a thread about a very specific question. Please don't start preaching. You seemed to have found out my first name, so you know enough to start at "hello" in PM.

I asked you for a contact in the PM since you replied here saying you know people who have this setup and you can help connect. How would anyone build a relationship on your suggestion when you don't even have a name to provide for it!!??

If you can offer no real help in the context of this thread, pls don't troll the thread.

Looking at your temper it feels I have made a mistake trying to offer you help. I did that because I know of similar situations and people have received help because they connected and networked. To be frank, you seem so arrogant. Best of luck to you.

 

[GoWeb]

Looking at your temper it feels I have made a mistake trying to offer you help. I did that because I know of similar situations and people have received help because they connected and networked. To be frank, you seem so arrogant. Best of luck to you.

Why do you feel sour? Is it too hard to stay on topic and only post helpful & relevant stuff?

Exactly what HELP did you provide here?
You offer something, I take it up for discussion and then you refuse saying I need to BUILD RELATIONSHIPS first. I feel amused. What do you run, a coaching center on relationships?

This is what you state and I know these lines as MARKETING:

"I will connect you with some of the industry veterans in India.
Also there is a smart phone based discussion group and a noted conference held every year. Next one is in Delhi."​

Now compare your above answer with that of Stub, notice the difference? He is genuinely HELPING, insteading of PROMISING to help, and his answer is extremely relevant and provides a good insight into what is asked by the OP.

And if you still feel I am arrogant, personal opinion is a choice we all have.

 

[GoWeb]

I just got around to looking at your message. That's how hectically busy I am. I'll try to answer your questions, but I see you've already found the other thread.

1. Best place for taxation purposes? Any place that doesn't charge any taxes, and doesn't have a double taxation treaty with India (meaning they have no reason to talk to the Indian tax authorities. And won't).
2. Prices vary quite a bit. The amongst the cheapest is Seychelles at approx $400. Places like Caymans are under $3k (from memory). Do your research. You also need their serves to introduce you to a bank $500+. Plus whatever the jurisdiction insists upon, like registered office, registered agent, secretary, and accounting and legal fees. Usually you pay everything annually except for the bank intro fee. No there is no online market place. There are many offshore formation companies. It's hard, to almost impossible, to distinguish the good and the bad.
3. The bank introduction fee usually means you don't have to visit the bank. The formation company will represent you. But not always. You need to read each companies fine print. I think the $500+ is overall a good deal. But buyer beware because it's not refundable. And there is no telling if the bank will/can provide the services you want at a price you'd like. Some jurisdictions will allow your representative to represent you. Sometimes it's upon the banks insistence.
4. Not that I know of.
5. The minimum deposits will get you. It's $30k when I looked at Singapore. I haven't really studied Mauritius. That could get really irritating looking at that sum in your bank account every month. But if you start dealing in multiple $100+k sales each month, it might not be such a big deal.

See my other thread for more information.

I guess I will be able to afford only Seychelles or Cayman at the moment.

Will try to dig out more myself and share my findings here, just thought that MANY MANY people here would have this sort of setup already in place.

 

[domainerfella]

Why do you feel sour? Is it too hard to stay on topic and only post helpful & relevant stuff?

Exactly what HELP did you provide here?
You offer something, I take it up for discussion and then you refuse saying I need to BUILD RELATIONSHIPS first. I feel amused. What do you run, a coaching center on relationships?

This is what you state and I know these lines as MARKETING:

"I will connect you with some of the industry veterans in India.
Also there is a smart phone based discussion group and a noted conference held every year. Next one is in Delhi."​

Now compare your above answer with that of Stub, notice the difference? He is genuinely HELPING, insteading of PROMISING to help, and his answer is extremely relevant and provides a good insight into what is asked by the OP.

And if you still feel I am arrogant, personal opinion is a choice we all have.

Last response to you, sir, as I don't want to derail your thread. I knew nothing (clear from my first post itself) about the solution you wanted, but I could help you by connecting you with some rightful guys who have been through your situation many years ago and have successfully overcome it by incorporation. I see them helping new guys with the same issue. Many of them are veterans and don't visit forums. As you are from India, I felt it would have been more beneficial to you to discuss the issue with some of them by connecting and networking first. Things which stub face and you would face can be entirely different if you know what I mean. I jumped on your thread not to sell you bread, butter, jam. And yes, I was looking forward to connect with you as well and learn more from you. I think I was wrong.

 

[GoWeb]

For anyone looking for offshore incorporation, go through the contents of these 2 websites: http://www.apintertrust.com/index.htm and http://www.ibccompanyformations.com/en/. There are many such IBC (International Business Company) formation service companies and these are just two of them.

What I like about the first website (apintertrust.com) is how this website lucidly explains the different requirements for offshore company + offshore bank combo. Things such as Minimum Capital, Minimum Bank Balance and Actual Customer Feedback are provided.

@stub, what you said earlier is also validated on the first website:

You don't need a bank account in the same jurisdiction where you decide to incorporate. Offshore Bank Account in Cypress and few other jurisdictions have no minimum balance requirements but singapore has min. balance of $30k.