Move as much of your business abroad as possible to reduce taxes and increase privacy

It seems unfair that US residents have to pay high income taxes on cyberspace profits, even if it’s an ebook sitting on a server in Panama and being sold to a buyer in the UK. . moving your business abroad.

There is nothing illegal about recording your sales and profits with an offshore entity and only paying taxes on the money you send back to your home country, such as the US A bank account – a red light question on the US 1040 tax form .us

The best structure is to have an offshore corporation that owns the intellectual property that you create. The corporation sells e-books and physical products to customers around the world. You establish the corporation in a jurisdiction where there is no tax on your income. The corporation then pays you a small percentage of its profits as royalties, and you report it on your income tax form. While it is true that you have the option of reporting the amount of your income to the tax authorities, it is safest to report all income that you actually receive. Otherwise, they might do a “lifestyle audit” and ask some embarrassing questions about how you live so well on such a small reported income.

Also, there used to be a loophole to get an offshore Visa or MasterCard and charge you domestic expenses, with the bill paid by your offshore corporation. Most tax authorities now have the right to examine your credit card records if the card is in your name, no matter where it was issued. That lagoon is closed.

So the first real advantage of an offshore corporation is not total tax avoidance, but a significant reduction in tax by keeping profits that are not needed for your living expenses out of taxable income, corporate or personal.

The second real advantage of establishing a presence abroad is asset protection. There are too many professional plaintiffs and greedy lawyers these days to believe that you will go through life without a lawsuit, perhaps a devastating one. Some risks are insurable and some are not, but one of the quickest ways to stop a lawsuit is to be “trial proof.” That simply means that most of your assets are offshore in untouchable corporations and accounts protected by bank secrecy, and the ones that have to be in the US, like your car and home, are held by trusts or other entities rather than in their name. No attorney will take a contingency case against someone who has no assets to pay a judgment.

The third real advantage of going abroad is passing significant wealth to your heirs without going through probate or paying large estate taxes. An offshore corporation’s shares and even bank accounts can be structured to pass from generation to generation outside of estate tax regulations.

The biggest problem with going abroad is not the language, the expense, the time, or the learning curve. It’s just not knowing the right people. There are too many “overseas opportunities” where they put their money in their pocket and walk away. They know you won’t sue, it’s too expensive, and in many jurisdictions, the bad guys have the judges in their collective pockets.

Also, since the Patriot Act, many previously safe jurisdictions have signed tax treaties or information sharing agreements with the US. There is only one country that still has full bank secrecy, it does not exchange information with the Internal Revenue Service of any country and has Internet Connections – Panama. A group of international entrepreneurs, experienced professionals from all over the world, recently established the required structures in Panama to simplify the relocation process and provide connections with honest lawyers, banks, Internet service providers, etc. Panama is a major node in Global Crossing’s fiber optic backbone, so web pages load remarkably fast for Internet users around the world.

There are some MLM features to this new business plan, but the main reasons to review it are to protect your business from predatory lawsuits, reduce your taxes, and move your estate out of the reach of estate taxes. There is a very modest charge of $20 per month or so to get access to all the resources: the right people, lots of educational material, introductions to the right institutions, etc.