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Offshore companies

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memenode's picture
User offline. Last seen 11 weeks 16 hours ago. Offline
Joined: 2004-07-12

Here is one topic which we haven't discussed, but appears to form a great part of worlds economy: Offshore companies coupled with offshore banking.

Basically, as I understand it, they can be formed by anyone from just about anywhere online and sometimes with help of telefax and mail for a certain fee. What seems common to all is that they ensure the anonymity of the company owner as well as allow the company to operate without paying any taxes or paying very low taxes.

In a host country (country where you live) this may or may not be a legal thing to do, although if it was really illegal I doubt so many offshore companies would exist for so long as they did. It appears that as long as your country has a contract with the given offshore country for "avoiding double taxation" you are fine, if I understand correctly.

Big part of the reason I ask is because, considering the independence of the business aspect of Libervis from my country it does not need to be registered here. It can be registered anywhere in the world and I can conversely be anywhere in the world, and as long as I have a computer and internet access I'd be able to operate it. So, in the interest of saving some money on high taxes it seems like an attractive idea to incorporate offshore.

That said, anonymity doesn't seem to be the aspect that will help me much. My name is far from hidden online. So I'm wondering if there is any reason why anonymity is promoted as a feature of offshore companies and whether the reason is something I should be afraid of. I mean, if I incorporate offshore, should I worry about the fact that Libervis is an offshore company whose owner, myself, is actually known all over the place? Laughing out loud

And of course, I am also interested in the ethics behind offshore companies. Would you call them a shady business? How do you justify them? And also, how would you assess the involved risks (considering that some big countries, from some of what I've read, don't have a very favourable policy towards offshores)?

Thank you

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User offline. Last seen 7 years 27 weeks ago. Offline
Joined: 2007-02-26
I'm no tax expert but I've

I'm no tax expert but I've the same impression as you that they are often used to avoid/evade tax. Tax is a contribution to the general good, schools roads and hospitals, and it's hard for me to find justification for making less than ones due contribution.

Even if it gets around the fact governments haven't gotten off their backsides and negotiated double-taxation agreements, there's still a problem, EG a property investor using an offshore company pays corporation taxes in the country where the property earns rent, but pays no income tax on drawings in his country of residence, or however they work it. The downshot is one country is screwed. Come to think of it the whole DTA scheme seems a bit arbitrary, you'd think there'd at least be some EU treaty setting down a fair arrangement for all members.

Anyway a trust can provide some privacy, the trust owns the company which must submit accounts but the trust can remain veiled in secrecy. Is there a need for this?

People who use offshore companies seem to be generally perceived like those who abscond to live in tax havens, ie. they wish to avoid their social obligations and are disloyal. I think libervis should avoid anything of that perceived character like the plague. Anyone who starts to make progress in bringing about a fairer world makes powerful enemies, an offshore company provides easy ammunition for a smear campaign.

That reminds me, from http://news.sky.com/skynews/article/0,,30200-1304779,00.html?f=rss

sky reporter wrote:

"Doris Lessing, winner of the Nobel Prize for Literature, said a first black American president would not be tolerated by some. Mrs Lessing, 88, a Brit who won the award last year, said Obama "would certainly not last long, a black man in the position of president. They would murder him".

That's a problem with the charismatic leader style of representative democracy, a single point of failure. One bullet versus all those votes.

That risk would justify secrecy, but strength in numbers and a resilient network of empowered individuals is the antidote.

memenode's picture
User offline. Last seen 11 weeks 16 hours ago. Offline
Joined: 2004-07-12
democrates wrote: I'm no
democrates wrote:

I'm no tax expert but I've the same impression as you that they are often used to avoid/evade tax.

Well, actually, that'd be the whole point. It is called "legal tax evasion" because the law of the country in which it was incorporated allows lower or no taxes.

However, even so, there remains a point at which the legality would be questionable - the fact that the real company owner gets the money in resident country yet pays no taxes there. They are usually very hard to trace at that point, but it's still mostly illegal (depending on the country I suppose). And the only way I see this gap could be closed is by those double taxation treaties which would allow offshore companies to be founded completely transparently because the owner would disclose its relation to the offshore company and just pay a small due to the resident country and the rest (if anything) to the offshore country - making all bills basically clean.

But I'm not entirely sure this is how it'd work.

On the whole, I'm wary of the whole thing too. I want things to be 100% legal if that doesn't contradict certain higher principles (there are plenty of cases of that around, or else we wouldn't have much to talk about when it comes to unjust legislation, for example Smiling ), albeit various people have various kinds of principles they uphold. And in this case, although I believe the state doesn't use its taxes in a very fair and efficient way always, I don't mind paying taxes - at least if I can actually afford to pay them while staying afoot.

democrates wrote:

That risk would justify secrecy, but strength in numbers and a resilient network of empowered individuals is the antidote.

Well I hope so, but I wasn't really worrying much about the need for secrecy. My name is all over the internet and I tend to be as transparent as I can be, perhaps even too open sometimes. I don't really feel that kind of fear.

My only interest in offshore incorporation really stemmed from the desire to make Libervis as financially stable as possible. As you know, high taxes and other obligatory expenses essentially form a minimum line of entry/survival. If you go down below it, the state is gonna eat you alive (as in, you wont be able to afford anything but state fees, even if that, and you still gotta live somehow and pay the bills). Why else are so many honest people working in the unregistered economy?

I just need to make sure we're well above that line. Eye

Cheers

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