How to avoid the most common offshore mistakes?

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Did you know, that simply leaving your home country for greener pastures doesn’t necessarily mean an end to your tax obligation, especially if you’re a US citizen. Luckily you can avoid unpleasant consequences with few steps.

Become tax non-resident in your home country:

This can be challenging, because some of the countries like the UK, Australia, and others limit the amount of time you can spend there once you’ve ticked the box to have your tax domicile located elsewhere. That’s why obtaining a second residency can be an important step, but becoming a tax non-resident helps you avoid unpleasant surprises from your home country.

Putting down roots in your country of tax-residency can help your case even more. This includes renting an apartment, getting a drivers’ license, joining a country club, or docking your yacht at the local marina. Every little step helps.

Earn your money in an offshore company:

All too often we see entrepreneurs, and especially consultants, living overseas earning money in their personal name or even using a corporation in their home country.

Doing business in your own name may leave you open to some unexpected taxes ,so it’s better to have an offshore company. All tough we strongly recommend to do your research before opening an offshore account of business. When it comes to establishing a company offshore, different jurisdictions have different corporate requirements, exchange controls, public filing and annual requirements, government costs, and corporate administration rules. In order to maximize the value that an offshore structure can provide, you need to do your research and figure out which jurisdiction best meets your needs.

Be careful where you live:

Here in Europe, most countries practice what is called “residential taxation”. Live there long enough — often 183 days or more per year — and you’ll be taxed on your worldwide income. Some countries aren’t as aggressive as the others at taxing your foreign investment income. Just make sure you choose the right place for you!

Have an accountant that specializes in expat tax law:

You can save a lot of money in the long term just by using competent accounting and consulting firm. Wrong decisions made because of the lack of knowledge may cost you a lot so do your homework, and be sure, that company you are using, really is proficient.

WE AT NOVASIGMA CAN HELP YOU WITH ANY QUESTIONS ABOUT OFFSHORE COMPANIES, SO DO NOT HESITATE TO CONTACT US!

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