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Shell companies
estrompolos
Member
in General
What are shell companies .. and how does someone own one?
What does it take and how did the name "shell" come about?
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Comments
Here's a link with some more info.
A lot of good reading here: https://streber.st/2015/07/offshore-ecommerce/
I would not call that a 'good reading'... well the reading was actually good, the info is kind bad.
Seems like the author is implying that ther is no legit reason to have an offshore company, and this is simply not true.
Citing a legit reason would go a long way to support your position
Tax avoidance (in contrast to evasion) is legal, but U.S. tax code is pretty careful about avoiding loopholes that can really be used by small players to avoid tax. If your main office is within U.S., and the offshore company is just a shell, it's legal to set it up that way but it probably can't avoid tax liability in the U.S.
Large players pull some fairly intricate shenanigans to "export" profits to offshore companies. As you need really specialized lawyers to do it properly (I would even go so far as to call them "tax engineers"), you won't come out ahead if are trying this on a small scale.
Like really doing business in the offshore country you incoporated?
I get that are business that abuse the system in this regard, but if you are developing a product and your target audience is 'offshore' I think you have a legit reason to incorporate there. (Maybe it's just me)
Makes sense, like if you have to obey certain local regulations and/or either have a partner there to run the company or it does not require any physical presence (like UK).
Didn't know you could incorporate in UK this way.
Well, there are scenarios where you have an offshore business but it's not a shell (i.e., the actual "business", whatever that involves, actually happens there, which is not usually the agenda of most people investigating shell company possibilities).
It's relatively inane to incorporate where your customers are though, if your center of operations is elsewhere. You will usually have tax liability in that "elsewhere" country anyways, and all you're doing is making it easier for customers to bring legal action that will be very costly to defend against from afar.
I think that this will depends a lot on the type of the company and the jurisdiction you incorporated.
But I get your point, my problem is that OP asked about shell company, and @souvarine answerd with a link to offshore company. And the author of that article implies that an offshore company is some sort of shade thing bussines do to evade taxes and what not.
This may well be the case with a shell company, but it's not direct related with an offshore company. And to be quite frank people get shell companies inside their own country.
What I'm really arguing is the differences between shell and offshore company.
Well, clearest definitions I can think of:
shell - company that doesn't do much other than holding and/or exploiting assets
offshore - company or branch not located in the same country as the business's primary country of business
Now the l33t way to run a business is to transfer copyright of your code to an offshore shell company located in a tax haven and license it back to your main company at the right cost so your main company barely breaks even.
And there we go again :P
Go ask an accountant about these to get meaningful answer
Unless you find an accountant that specializes in that, it would be a lot like asking your doctor about illegal drugs, you probably won't get much more than "don't".
In the past shell companies are companies that acts mostly as trader proxies and run as an intermediary services. Sometimes a government that do not have any diplomatic relationship with other government uses these companies to trade
The problem arise when these proxies are being utilized as a device to launder money or to support funding for act of terrorism.
Uncle Sam get mad as many shell companies are able to circumvent their regulations, therefore the Patriot Act was born.
Nowadays anybody who has business with them has to abide the act or otherwise they will remove you from their "friendly list" :P
Well, there are search engines specialized in finding and sorting things and also there are phone books for people that don't use computers for searching.
Also, there are huge accounting associations websites where people can get information about licenced accounting practices.
To answer your "how does someone own one" question:
https://www.vice.com/read/setting-up-a-bogus-shell-corporation-is-really-easy-1215
http://www.offshorecorporation.com/nevis-llc
http://www.shell.co.uk/
Or http://www.egghelp.org/shells.htm
Dit is van mijn vriend naar Amsterdam: http://www.shell.nl :P
Around here we've often referred to "shell companies" as brands where their ownership was kept secret to bring in customers that might not otherwise sign up for the brand's parent company, to shield people from seeing the negative reviews about their business.
A part of business strategy, I guess