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Feeding paycheck into a Holding Company
AtSea
Posted: Thursday, December 13, 2012 5:49 PM
Joined: 03/09/2012
Posts: 8


Hi Avmar, I've been downloading tons of info on this issue and am hoping you might be able to shed some light. I'm an American and looking to work abroad. I'm if it's possible to setup a Holding Company out of the US and feed my paycheck directly into that. This isn't with the intention of avoiding taxes on that paycheck, but I have a more international life-plan in mind and seems a holding company would be a smart thing to setup for long-term savings and investment purposes. At present though, it looks like I have to own a company for the Holding Company to own, and the holding company has to demonstrate a plan for generating profit. Does this mean a ship would have to hire me as a freelance worker (solo employee of An American Yachtie LLC?) and could a regular paycheck be that plan for profit? Seems like a tricky question. Thanks for your time
AtSea
Posted: Thursday, December 13, 2012 5:50 PM
Joined: 03/09/2012
Posts: 8


To clarify, "out of US" means somewhere like Switzerland, UK or beyond US borders.
Tom
Posted: Thursday, December 13, 2012 7:55 PM
Joined: 04/05/2008
Posts: 7


As a US Citzen/resident you are required to pay to report and pay tax on your worldwide income. If an American is a shareholder/partner in an foreign corporation, partnership, or trust that person is required to report the details of that entity with the Internal Revenue Service on form 5471, the penalty for failing to file this form is a $10,000 fine. There are also disclosre requirements for those Americans/residents that are beneficiaires/signors on a foreign bank account. From a tax standpoint I rarely see an advantage to opening a foreign corporation to process crew salary, the additional bank fees, set up fees, legal fees and accounting fees typically offset any advantage. I'm not quite sure what your ultimate goal with this foreign entity is. From a legal standpoint there may be a valid reason for opening a company in a foreign jurisdiction unfortuantely we can only comment on the United States tax implications. Thanks, AvMar
AtSea
Posted: Friday, December 14, 2012 9:03 PM
Joined: 03/09/2012
Posts: 8


Thanks Avmar, I understand fully reporting is required and, to be clear, the intention isn't to escape anything, but rather to expand opportunities and available means. As long as all laws are honored, do you know who might be better prepared to answer such a question?
Tom
Posted: Saturday, December 15, 2012 11:41 PM
Joined: 04/05/2008
Posts: 7


I would recommend you speak with an attorney or accoutant in the jurisdiction that your opportunities might arise. For example if you are looking at investing in a Belize business venture you would want to speak with a Belize attorney. I am aware of many American's that have invested in foreign partnerships/corproations/ businesses that did not require them to actually open an "offshore holding company" It might be helpful to direct your question to Peter Brooke. Mr. Brooke is a contributor to Dockwalk, his contact information is on the Dockwalk website. If you provide him exact specifics of what you are trying to accomplish he may be able to recommend a course of action.
 
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