Setting up a Dellaware corporation to do my trading

Discussion in 'Professional Trading' started by Daal, Apr 20, 2007.

  1. Daal


    Its cheaper than you think. And with regards LLCs pass through problems. thats why I'm preferring C corps. I can just keep retaining earnings. I dont need a lot to live on. Plus I can still make deductions and find loopholes, in the US thats much easier given the huge amount of literature avaliable
    #21     Apr 22, 2007
  2. C-corps are not useful for foreign citizens, as they file their own tax return and pay taxes on their profits to the IRS, even if its owner is not US. S-corps, on the other hand, do not pay taxes. As LLCs, they have passthrough taxation, but only US citizens or residents are allowed to own S-corps.
    If I were you I would avoid incorporating in the US.
    Why not going through the Uruguay or Panama routes. You not only don't pay tax, you also save the bureaucracy of filing returns or reporting your accounts.
    #22     Apr 22, 2007
  3. Daal


    I know buzzy, nothing prevents the C corp buying up a panama corp. that way I only have to report to my government that I'm a major shareholder of a US company. Then I report to the IRS that the C corp bought the panama company(which should not produce problems as soros can tell).
    but for a brazilian citizen to go out owning companies in suspect places might get me in trouble. I want to do this legally
    #23     Apr 22, 2007
  4. Daal


    if the panama company can retain earnings tax free, that would be the jackpot
    #24     Apr 22, 2007
  5. As I said, the key is not only to avoid tax liabilities. You also have to avoid reporting liabilities. It saves headaches and legal trouble, not to mention unexpected changes in the law. Suppose they change the laws, if you report they inmediately get you because they know where you have your money. If you don't, you still have time to rearrange your setup.

    In most countries you don't have to report a Panama foundation as you don't own it. 100% legal but you have to check in Brazil. Income from a foundation is another story, see below.

    A LLC might be useful to avoid the recent Tax Haven laws in some countries. Have your foundation own the US LLC. Pay yourself a salary through the LLC. Income is not from a tax haven, so no additional reporting required. Profits from the LLC not taxable or reportable to anyone, as the foundation owns the LLC, and in turn, nobody owns the foundation. So the brazilian taxman will never be able to connect you to your Panama structures.

    I am telling you all this because I know people in South America owning their businesses, homes and other assets through Panama structures. AFAIK they have no trouble, it's all legal. What you see in the news is guys engaging in bribery, fraud or drug trafficking.

    I don't see what's the advantage of a US C-corp starting a Panama foundation. C-corps always file for US taxes and the Panama connection is gonna cause you audits and bureaucratic pains from the IRS as you will have to report it to them.
    #25     Apr 22, 2007
  6. Yes it can do that. You don't even report its earnings to anyone. Remember, you don't OWN a panama foundation, just CONTROL it. If you want to pass the foundation to your heirs, zero inheritance taxes. If someone sues you for whatever, or you get into a nasty divorce, no one can seize the foundation assets as they are not yours.

    There are also Panamanian bearer-share corporations. Which your foundation can own.

    If you own a multi-million dollar home through one of these corporations, you save on wealth taxes as the home is owned by the corporation, the foundation owns the corporation and no one owns the foundation. If you sell the house, you pay zero sales tax, and zero bureaucratic pain as you only have to hand the corporation shares to your buyer.

    The possibilities are endless.....
    #26     Apr 22, 2007
  7. In the country where i live, the more tax money they collect the more money they spent on useless or corrupt things.
    #27     Apr 22, 2007
  8. Daal


    #28     Apr 22, 2007
  9. I negociated with Ocra in London years ago. But i also negociated with others providers. Ocra was not within the top five when i had to decide with whom to work.
    They gave me a very bad impression.
    #29     Apr 22, 2007
  10. That report is potentially misleading. Panamanian offshore structures cannot engage in trading in Panama itself. Outside Panama you can do whatever the local laws allow.

    There are also some restrictions on Panama foundations, that's why I would use one of them just as a holding company, and do the trading through any company owned by the corporation, as long as I make sure the company does not have any tax or reporting liabilities.
    #30     Apr 22, 2007