ET is not usually a great place to ask about tax, but what the hell, nothing to lose. Anyone have any experience with the tax deferral strategy of handling clients through an offshore company? The basic idea is lets say you manage accounts for clients through a company domiciled in a zero tax jurisdiction. The company collects and accumulates those payments free of US taxes. You, a US tax resident, own the company, but because it has multiple clients and is a "real" company, you don't get taxed on the annual profits. If the company pays you a salary, that salary gets taxed. Once you decide to repatriate the accumulated profits in the company as a dividend to yourself, taxes become due. So, the taxes are deferred.
Great question, Im also looking for the answer to this question, though I'm a Canadian citizen. Im specifically looking at how to structure something like this as an advisor, with minimal expense to maintain. This article below discusses how tax deferral is possible when setting up a corporation, rather than a trust. I would be interested in hearing if this is possible to do in the U.S. http://www.moneysense.ca/investing/mutual_funds/columnist.jsp?content=100235 http://www.moneysense.ca/investing/mutual_funds/columnist.jsp?content=100237 However, this article sheds light on the downsides of trying to defer taxes in a fund: http://www.iofc.net/gowealthy/story.asp?storyname=10874