Let's face it. Many offshore corporate owners struggled with this. When your business is not profitable, how you wish the business is an onshore business to reduce your tax. When your business is extremely profitable and it is offshore, you have the urge of bringing the money back onshore. What is stopping you from doing so? The answer is very simple, your tax.
In this article, we will examine a few ways to bring your money back legally within hit by your taxman.
When should you start all the plannings?
The planning should start as soon as you intend to bring the money back onshore. In most cases we came across, the offshore corporate owners set up the offshore company and accumulate their wealth in overseas. Technically speaking, the wealth accumulates offshore is not taxable if it is not income derive from onshore. If it is income derived from onshore but parked in offshore, I presume it is pricing transferred income.
Why do we need to have proper planning?
There are a few things we have to be careful when we are dealing with this. Potentially, all offshore corporate owners have to be careful with 2 potential offences. The 2 offences are money laundering and tax evasion.
How to bring the money back to onshore?
The second method is to establish an onshore company, the offshore company paying a regular income to the onshore company as marketing or consultation fee. This has to be planned properly as well. In most cases, the more you send back within a year, the higher is the tax rate. The trick is to send something back and pay a tax that you can afford to. Not everything within a year and not nothing at all. The purpose of this method is to regulate the income.
The third method is to use us to establish an offshore bank account with a debit card. In that case, you may charge your expenditure to your debit card. But there is a shortcoming, this method does not allow you to buy big ticket items.