All the online info on this subject is confusing and different everywhere I ask. So here it is: Looking to register an IBC in Cayman, Bahamas, Belize etc. My online business creates profits from websites (affiliate programs, website memberships, etc) and those clients are in Europe and Asia (I have no US clients). Those clients would directly pay my IBC in say Belize to the company account in Belize under the IBC. From those profits I'd wire myself let's say $5000 each month from the IBC account to my personal US account as salary, which I will of course declare as income and pay my taxes on the 5k each month.
Will I have to pay U.S. taxes on the actual company profits of my IBC?
Do I have to declare/report foreign IBC profits to the IRS or anyone?
You have a host of issues to deal with aside from taxes. As a general matter, once your money comes to the US, you're going to be paying taxes on it. But given where you are incorporating you are going to have to comply with AML, OFAC and FCPA regulations on money coming in and out, which will likely trigger IRS scrutiny. In addition, Belize is a known money laundering haven that is certain to raise a red flag wherever you go in the US. As for whether your IBC profits would need to be declared to the IRS or other agencies, much is going to depend on the nature of your business, how it is structured, and your citizenship, among other things. You're going to need counsel skilled in corporate matters and in international tax to guide you. There are many such firms in the DC area that are capable of assisting you. But whatever you do, do NOT use non-legal professionals to assist you here. There are many "offshore incorporators" that purport to be able to form companies overseas, etc. Don't risk it. Use counsel here in the US who can then point you to counsel in the appropriate jurisdictions and work with them in tandem to service your needs.
The foregoing is not legal advice nor is it in any manner whatsoever meant to create or impute an attorney/client relationship.
Don't do this without having consulted with a tax attorney who has international/cross-border experience. You will certainly have information-reporting requirements - i.e., telling the IRS about your offshore activities - and your entity may be treated as a so-called "controlled foreign corporation" in which case you will have to report and pay tax on all of the corporation's income, regardless of whether the corporation sends you the cash.
My answer does not constitute legal advice and may not be relied upon by anyone for any purpose and does not constitute an attorney/client relationship or an offer to form such a relationship. This disclaimer is intended to be fully compliant with the requirements of Treasury Department Circular 230 and the terms thereof are fully incorporated by reference.
Even if this can be done w/o violating the law does not mean it it is a good idea. You might be better off just having foreign clients wire the money to your US account. Additionally, there are very few offshore banks that will still set up an account and even then your accounts can be monitored. Belize in particular is a no go due to a recent FBI/SEC operation there; Bahamas is famous for confiscations and jailing; Cayman and BVI - good luck getting a bank account open. Consult with a lawyer first in any event as this is just general info.
This is not legal advice but a general comment on society based on a limited set of hypothetical circumstances. No one should act or refrain from acting based on these comments without seeking appropriately licensed legal or professional advice. The author disclaims all liability in respect to actions taken or not taken based on his comments.
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