Hypothetical situation: You live in a country where you are taxed on worldwide personal income at 52% You own a successful business (Call it B1) which does business on a global level and very little/none within your own country. B1 is set up and registered in your own country where corporation tax is set at 12.5% You don't like the idea of paying 52% on any income so you set up a holding company (B2) in the cayman islands which will have a 100% stake in B1 which is registered onshore. B1 makes profits of $10,000,000 which it sends to B2 and B2 pays you a personal income of $1,000,000 which you are taxed $520,000 and left with $480,000. $9,000,000 is left in a bank account in the caymans registered to B2 where there are no taxes. Can B2 buy assets for your personal use ? such as cars, property etc I know most countries tax residents on worldwide income but technically on a personal level only $1,000,000 was made. Is this completely legal ?
If you speak about this amount of money you surely have no problem to pay an expert for expert advice. But the fact that you ask it here means that you dream that one day you will make this kind of money. Pay an expert, it will cost you maybe a few thousand dollars, so less than one day average profit, and certainly less than the fines you can get from tax people because of a bad construction. What kind of licence do I need to fly a personal jet? Because if ever I make money I want to buy one. Maybe I can afford to have a private pilot.....
Actually different experts might give you different opinions, I think I am nobody you spoke yourself about difficulty to get proper tax advice on international corporate set ups. And to the OP different countries tax departments see offshore set up differently, but yes I'm sure the OP will get the chance to talk to a couple of tax lawyers before he ends up paying 5.2 million USD income tax
He should speak with Price Waterhouse, Deloitte, BDO...., they have offices all around the world in every country. On ET he will not find advice that is comparable with the big four. It is indeed very difficult and it might ask big sacrifices, like moving abroad. Constructions that only exist on paper don't work anymore. Information is needed for the country where you live but also for the country where the construction will be created. For that a tax lawyer from the US will not be enough i am afraid. If OP has already this income he will have to pay, it is impossible to make a construction retroactive. And if he has not this income he is dreaming about making money, it is not a reality.
One of the best options for OP is to reincorporate the business in Puerto Rico and bring down that tax rate by a lot, legally. But yeah, consult an expert