Offshore companies and banking

Sounds like it's time for you to invest in a couple of hours of a good offshore tax attorney's time, as it may be cheaper in the long run. Or, ask this in the Legal section, and maybe Sr Guzman will give some free advice to you.

Adrianb

It has been said by some international financial experts that THE safest place in the whole world to put money is ... the USA. Unfortunately for Americans, it is also home of the feared IRS, who doesn't scare you (presumably) as a foreigner.

If you're talking about incorporating, I don't know the ramifications. Maybe another country would be better.

If you're only talking about banking, however, I don't consider anywhere in the Western hemisphere safe, except the US and Canada. As for Panama, it has often been alleged that its secret banking is only for drug money. It has also been suggested that opening those records to the IRS was the REAL reason for invading Panama, a country whose tinhorn dictator threatened nobody (sound familiar?).

It seems to me that as a foreigner you should go US all the way. It's not the only way that foreigners have more rights to America than Americans.

The Most Important Rules:

1) Don't incorporate in the country where the income is earned.

2) Don't incorporate in the country where you live or spend it.

offshore business

I dont now what is the nature of your business, but if your major maret is not DR, you can consider Free ZOne legal frame, lie the CYber Par of Santo DOmingo, that will permit you legal tax free location, and also permit offshore.

hayon@pcsd.com.do

if you incorporate here you should pay taxes now, and if you incorporate in panama then after 3 years of residency. As far I know, the goverment is very relaxed about taxes (and more with foreigners) but with the current economic situation this can change soon.

may be the better for the next three years should be a panama company with bank accounts in USA.

but what happen if the company is incorporated in the Cyberpark free zone? is the income earned from that company tax free for a dominican resident?

thanks
claudius

Just 90 miles north from us as the crow flies over the ocean, is a set of islands called the Turks and Caicos. A tax free jurisdiction and the folks here are skilled in drawing the corporate veil between you and your business transactions. Off-shore banking and business jurisdiction is the islands' major focus and besides tourism, their only 'product'. Banking is good, although frustrating at times. Business Registration costs about US2,000 and it includes setting up bank accounts. They have a number of banks, including Barclays which is now First Caribbean Bank. The banking infrastructure is secure.

There is a level of sharing information between banks and US government, but this is mainly focused on US Citizens and 'origen of funds'. Don't try to launder money but if you can state where the income comes from, you have no problems.

Something like this may be worth considering for you. I know nothing about the 3-year rule. Probably is worth checking it out with an attorney locally.

Just a word on part of the post made by Gringo Carlos

Bull Droppings!! Sammy and the boys paying taxes here?? No way.... Heck, when they come back they go and ask His Baldness for total tax exemption of their Ferrari's and Bentleys....

Other than that, you are probably right on.

I think Adrian might do best consulting a serious banker (and there are some) and working with the real people here. There are ways to do a lot of things, legally. I am glad he has asked this distinguished panel...

HB

Have you considered Belize.

I do not know much about offshore business but I believe that Belize has a very actractive structure for offshore business.

And for what it is worth, Belize is part of the British Commonwealth with English as its official language.

Ah, but my friend Hillbilly, I said the GOOD DOMINICANS who do eeeverything right, according to the law, just like adrianb said he wants to do.

When Sammy gave El Burro a new SUV, there was a legitimate (In HIS mind) reason for doing so, and it probably wasn't because he wanted to be a Presidential Advisor either.

Maybe adrianb isn't aware that the biggest sport in the DR after baseball, is tax games.

The Perfect Crime!

Not only identity theft, but also making me benefit from crime, so that I'm also liable. But, it is stolen goods nevertheless - LOL.

To get back on track, surely there are two types of taxation in this case. Taxation on income earned and taxation on business income. I know in the US you can register an S Corporation where the business income rolls up to your personal income. So, you have some ability to e.g. show a business loss, which makes your personal income less, and therefore, your tax bill less.

Here in the DR, I am not too sure of how one deals with Business and Personal taxation. In the Zona Francas business is exempt from tax, as this is the reason for the existence of the Zona Francas. So, if I read this all right - if we are liable for personal income tax in 3 years time, it may be that the same kind of thing is possible - leave the income in the business as much as possible and draw just a small salary.

I think all of us should go and consult a good tax lawyer LOL. And I have no idea what taxes I'm liable for, now that Escott is making me benefit inadvertently from The Perfect Crime.

Sutup a Free Zone Company

the incorporation under the Free Zone legal Frame, as well as the day to day operation is the most hassle free system I know:
normal incorporation , even without the incorporation taxes
agreement with the Park Operator
National Council of Free Zones Permit
Start operations.

the complete process can be done within 45-60 days and the costs are reasonable

I'll be glad to assist you.


hayon@pcsd.com.do

thanks for the info, please anyone knows what happens with taxes if a resident owns a company in the free zone?

regards
claudius

hello adrianb, for the info you have posted it seems I'm looking for the same info as you , you have not posted your email here, please email me, maybe we can share info about this,

best
claudius

Free Zone companies are exempt from Dominican taxation, except for minor "permission fees" for importing and exporting.

Free Zone employees , including the owner if they are resident, are still subject to Dominican taxes and labor laws , which also have a special set of rules for the Free Zone companies. (more lenient)

In other words, if you are going to live here, work here, and pull wages, you should be paying personal income taxes if your wages are above the level which is exempt from income taxes (I think this is somewhere around RD$11,000 a month right now), which would probably be the case for most foreigners coming here as owners of a Free Zone company.

The Free Zone laws also state that if the company is a foreign-owned company, at least one foreign principal/manager must have Dominican residency, probably to create at least one target for the tax people should they decide to come looking at your company.

After 3 years of resident here it is presumed that either one is working and making a living or .......wait for it, living off investments. The latter is a big get out clause as it means that you can demonstrate that you are living off the interest of your capital investment here as a retiree. Investments are tax free to locals and forigners alike.

Unfortunatly, that looks set to change as the goverment has plans to charge tax on the interest recieved. Not unlike the USA or Europe but another mortal blow to the economy. The reason is simple. Investors that are brave enough to invest here do it because of the high yeild and tax free returns. Tax it, and there is little incentive to bank here which will increase the outflow of dollars leaving this country. Quite the opposite of what the country actually needs.


If you own / run a physical business presence here then a DR company formation means you are issued a tax ID number and they know where to come looking for the tax. Both on corporation tax and income tax plus national insurance/ pension plan payments for staff etc.

Offshore business transactions of course is very difficult to prove unless you own up to the fact that you recieved a wage in to this country to support yourself. In this instance, wages drawn here or brought in are taxable here at 25% (last time i checked) and should be declared.

Regarding a Panama corp then there are no reporting issues. Panama does not care where your company actually conducts its business so long as its not in Panama otherwise that has local Panama tax issues and you do not trade in the country of residence. That is then an IBC typical setup. So there is no point opening a Panama corp or any IBC for that matter then expect to run a beach bar here tax free. Nope, it don't work like that. Consider a Free Zone only if you have some serious physical business turnover as the running costs and setup fees are certainly NOT free!


There is no end of year filing to be made on a Panama IBC but a set of books must exist. AGM's can be held anywhere in the world and the directors of the company need not even physically meet. So long as the very low annual duty stamp is paid plus fees then you can run an offshore company from here and perhaps do business in Mexico or UK for example. The banking of such a setup can be held in USA or many of the islands already mentioned in the forum. Therefore the profits can be held elsewhere. Access to your cash is then by ATM debit or credit cards issued in the name of the company which makes the connection to you personally that much more difficult, use a Nominee Director setup and the connection between you and the company is then even more remote.....nuff said.