How do I know this will work for my business?
That is exactly what Span-Hansa will determine for you. Call or email us.
Does my server have to be in one of the Span-Hansa locations?
There is certainty that a transaction has taken place in the haven if 1) the invitation to treat, 2) the offer to buy, 3) the acceptance, and 4) the transfer of title all occur there. Having your server there helps that case. However we do have situations where volumes or bandwidth dictate other solutions.
Won't my shareholders or others think that I am evading tax?
It is quite proper to avoid tax but not to evade. A properly constructed plan which follows the rules is as practical as buying tax free municipal bonds or whiskey in a duty-free store. Indeed many governments have actually implemented tax incentives to encourage international business. One example is the USA Foreign Sales Corporation.
How long does it take to set up an international business structure?
The time and cost to establish international structures will vary with the complexity of the transactions. It is also important that a plan which encompasses the correct structure be initiated very early in the business origination process. Without this, the plan may be meaningless. Attempts to amend or implement a structure after the business has begun may be illegal or prohibitively expensive. Communication with competent international tax counsel early in the planning of any new venture is mandatory. None of this should be confused with the time it takes to actually incorporate a company which is about one day.
How can I finance my international expansion and the setup costs of the structure.
Span-Hansa may participate with its own venture capital and other financial sources to assist in this area.
How many people do I need to employ?
In an "active" business you may only need working board members. If the business is passive (rents, royalties, interest), there are often additional requirements. For example, subsidiaries of Canadian companies may require more than 5 full time equivalent employees. These need not all be residents of the offshore location but might be regional sales representatives, etc. located elsewhere.
Is there secrecy in these haven locations?
Yes, most low or no tax jurisdictions have secrecy laws but they aren't a defense in the case of criminal or money laundering activities. In addition, many smaller jursidictions have a very poor track record of support of these secrecy laws even for legitimate business. We are of the view that secrecy is nice in the sense of providing privacy but that a proper business plan should not rely on it. Indeed, one should expect to be audited and conduct ones affairs in anticipation of such scrutiny. As well, clients must recognize that all legitimate banks must apply due diligence procedures in line with international standards and must report suspicious transactions.
Can I set up a bank account and have a credit card?
You can, but to what advantage? Taxes are normally levied on the person with ownership and control. Normally that is the person whose name is on the card or account regardless of who you say controls the venture. See examples of filing requirements such as Form TD F 90-22.1 in the USA and Form T1135 for Canadians.
How do I get started?
Call or email us. It would be helpful if you were to fill out the eleven point Project Review Summary at our Qualifying page, or our Start Today page.
I would like to form an offshore bank of my own?
There are very few credible jurisdictions left where the private personal bank is allowed. Most jurisdictions require that a bank be a subsidiary of an institution regulated under the banking laws of a major recognized country. In addition the parent company attempting to establish a foreign bank may require domestic approval before applying.
How do I keep control?
Only through a proper business structure, e.g. the foreign subsidiary would report to the domestic parent's board but would still take its own decisions. If you shatter the reality of the offshore operating company's independent "mind, management and control" by demonstrating control from abroad, you may bring the fiscal situs back to your jurisdiction. Alternatively, you could move your personal residence to the optimum jurisdiction and carry on your control from there with impunity.
My Swiss banker says they will never find out that I have a bank account with them.
It is not your Swiss banker who may go to jail if you have failed to follow the correct filings and disclosure in your country!
How much does it cost?
You will find offshore companies advertised in almost any newspaper or airline magazine. These are typically "nominee" or bearer share structures which we do not support. Their cost can be as low as a few hundred dollars per year. At the other end of the scale is your fully staffed, active, non resident subsidiary with offices, executives, travel expense, etc., etc. The moving costs alone for one of your executives to relocate may be tens of thousands of dollars. From our experience, a modest subsidiary foreign operation may cost in the order of $250,000 per year to manage. The Span-Hansa LOCI solutions usually fall somewhere between $25,000 and $150,000 per year commensurate with the scale of the business. Span-Hansa Group companies may also charge percentage participation fees related to revenues or profits.
How do I find good advice in my community?
Let us assist you with initial guidance in order to mitigate the research costs of local counsel. But, in all cases we will want you to have thorough and sound domestic legal and accounting advice, and we will assist you in locating same.
What is the best offshore location?
This can only be answered in light of your specific venture requirements based upon the nature of your business, its operating history (new, old or ongoing), and the residence or tax status of the shareholders/beneficiaries. Zero tax havens may seem most desirable but they may not satisfy any need for tax treaties with other countries.
What is the ideal business application for international structuring?
There are many but the best are in industries where information or services such as computer programs are being conveyed through services such as the Internet. Where hard-goods are involved, contract fulfillment centers make the structure more complex but not impossible. See examples of successful structures in our section on International Business and Tax.
What if I am audited?
Build this eventuality into your business plan, mindset, and conduct. You will sleep better. You will also focus on the real elements of the business venture. As well, a properly structured international venture is not nearly as expensive as tax litigation.
We have to make all the decisions here at headquarters. Why can't we just have the offshore company sign the paperwork?
Anything short of real substance in the haven location will simply not work. This is particularly important when abiding by Transfer Pricing rules wherein the actual activities giving rise to the value in the various jurisdictions must be defended in order to allocate profits there.
If I establish a proper international business structure, how much can I expect to improve my after tax profits?
In Canada, as an example, a shareholder of a Canadian company can improve the ~40 cents he might otherwise keep from each dollar of profit...to ~75 cents (less the cost of his new structure). For the business that can begin from the outset in a jurisdiction like Anguilla, Bermuda, Bahamas, etc., you can potentially keep the whole dollar. In structures for USA corporations or shareholders the advantage may be a permanent deferral of tax rather than a pure saving of tax.
Why should I use the Span-Hansa Group instead of some other source of international structuring advice?
Since 1981 we have combined all of the necessary skills, precedents and services you need. We know of no other organization that consists of an Internet services, incubator/accelerator services, a near bank, credit card services, equity sources, active directorships, marketing & management in multiple unique locations. We invite you to compare our track record.