Let me remind you once again that I got caught for tax evasion, so I’m probably the last person you’d want financial advice from. However, I can share the recommended structure and the actual structure of my offshore company back in 2015.
The agency recommended setting up an LLC (Limited Liability Company) under my offshore company. This structure promised two major benefits that every tax evader seeks:
- It creates multiple layers of ownership, making it difficult for tax authorities to trace the true beneficial owners.
- It guarantees zero to very low taxes, as offshore jurisdictions often have minimal corporate tax rates.
This very same structure was used by many high-profile individuals such as members of the British and Spanish royal families, Jackie Chan, former presidents of Argentina, Sudan, and Georgia, son of former Malaysian prime minister Najib Razak, brother-in-law of China’s paramount leader Xi Jinping, and many others in the Panama Papers and Paradise Papers leaks (Source: Wikipedia). However, they made their setups much more complex and sophisticated to hide even better.
In hindsight, I didn’t choose this structure because:
- I didn’t have significant money at that time to go the extra mile for this costly setup. I had just pocketed a little over $150K that I wanted to hide. In 2015, Seychelles was still considered the safest and best tax haven. The Panama Papers were not leaked and published until 2016, so having an offshore company alone was already a very well-thought-out structure.
- I never thought I would be caught. I was such a small fish; authorities are likely to go after the big fish, not me! And I was extremely careful and “smart,” or so I thought.
- The difficulty in banking. As an offshore company, it was already extraordinarily hard to apply for banking anywhere, and with an LLC underneath, it absolutely screamed money laundering and tax evasion. The chance of getting approved was even slimmer.
Looking back, with first-hand knowledge and experience of how tax inspectors work, even if I had used this recommended structure, if they wanted to find me, they would find me. Given one little innocent and trivial trace, rest assured they would find out about the rest, just a matter of time. Look at the Panama Papers: those people were so powerful and rich, and their structures were so complex and sophisticated, yet they got caught! What was my chance?
While I cannot recommend the best structure for your situation—it’s beyond my expertise—I strongly advise you to consult with legal, tax, and financial experts. They can help tailor the safest and most optimal structure for your business, ensuring all your goals and compliance requirements are met, while maximizing benefits and minimizing risks. However, I’ll share the structure I used, which ultimately got me into trouble, so you can learn from my experience and consider a better and less risky approach.
Of course, to be fair and honest, not everyone is going to be caught. So the decision is entirely yours!
Please remember—don’t be like me! There is nothing worse than enduring the stress and anxiety of being under investigation for years.
** This chapter is part of a SIX-chapter series— don’t miss any part of the story! Stay updated and read more chapters from this series here:
- Introduction: Offshore Companies & Tax Evasion (6 Chapters)
- Part 1: What Is an Offshore Company? What Is Tax Evasion?
- Part 2: List Of Known Offshore Countries And Territories
- Part 3: Should You Open An Offshore Company?
- Part 4: What Is The Best Offshore Structure?
- Part 5: Where Should You Best Have Your Offshore Incorporated?
- Part 6 (Final): Words Of Caution
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