So there you have it.
- Make sure you are not forced into a choice by a foreign law.
- Decide based on business practicalities that you will have a foreign entity.
- Assume “invisible” is better.
- Try to disprove this in favor of “deferral” by financial projections. Figure out if the deferral strategy generates tax savings.
Those tax savings–if used correctly–act like a tax-free working capital loan from Uncle Sam. What is your return on investment for working capital plowed into your business? That’s the upside of the deferral strategy. Compare it against the cost of setting up and running the structure. Cost/benefit balance? How does it look.
You’re done. Good luck
Not to be redundant and beat a dead horse about this topic, but I was shocked, shocked to hear yet another example of tax haven secrecy drop messily into the FAIL bucket.
This time, it’s Lichtenstein. It’s a beautiful place. (I’ve been there).
And this time it is the U. K. tax authorities who had a DVD full of tax data fall into their bureaucratic lap via espionage or beings from beyond the grave.
And yes I know full well that the German government is also exceedingly cranky about Lichtenstein and the blowback in Germany is profound.
The lawyers and bankers in Lichtenstein are first rate. The laws of the country are water-tight. Yet this stuff happens. It doesn’t really matter HOW the information leaks out. The fact is, that it did. And now there are a lot of nervous people in Britain who thought that the “hide it and lie” tax strategy would work.
As long as there is a human being in the equation who is not you, secrecy can fail. If you want to know exactly when, ask Mr. Murphy.
