Owning an offshore company is still not illegal (even if the newspapers say it is)
President Macron – of France was elected yesterday. Earlier his emails were leaked and showed that he had signed an operating agreement with an LLC in Nevis. This means he was an owner of an offshore company in Nevis (insert exaggerated gasp from the general public!)
Online media and Newspapers have attacked him saying that:
Documents Indicate That Emmanuel Macron May Be Engaging In Tax Evasion
Documents leaked online today appear to show that French Presidential Candidate Emmanuel Macron entered into an operating agreement for a Limited Liability Company (LLC) in the Caribbean island of Nevis… and that the company may have had a business relationship with a bank which has been previously involved in tax evasion cases in the Cayman Islands. Macron claimed he was not concealing assets or holding secret offshore accounts less than a month ago.
The first document is an operating agreement drawn up on May 4th, 2012 to form “La Providence LLC” under the 1995 Nevis Limited Liability Company Ordinance bearing Mr. Macron’s name and signature. La Providence is the name of Macron’s former high school in Amiens, where he first met his wife. The decision to form a company in Nevis is suspect, as the Nevis Confidential Relationship Act prohibits the disclosure of information and guarantees the secrecy and privacy of offshore LLCs in Nevis. Information about company owners is not published nor is it available to the public. (http://disobedientmedia.com/documents-indicate-that-emmanuel-macron-may-be-engaging-in-tax-evasion/)
Well firstly – that owning an LLC offshore does not matter in the greater public opinion, even in the most hotly contested presidential race in 2017, in France, where numerous parties vie for the leadership role.
Secondly – if you are going to be private, perhaps don’t name your entity after the place where you went to high school. Be smart and pick an obscure, shelf company like name which can’t be tied to you (unless you for some reason, want it to be). But if it’s just a holding company for personal investment assets (as it looks like in the case of Macron), then don’t name it after your high school. Especially if you are like Macron and you ended up marrying your high school teacher.
Thirdly, as is noted in the article – Offshore LLC’s in Nevis are protected from the general public. However, due to CRS and AEOI disclosures, the information on the accounts may be shared with governments starting in 2018. Again – LLC’s in Nevis are 100% legitimate, useful operating entities.
We employ them when we need an entity with strong asset protection, and oftentimes when there is a sole owner. This is because IBC’s (international business companies) do not have the same protection for single owners. Overall LLC’s are more flexible than IBC’s and generally easier to use in a holistic wealth planning activity. In any event – a perfectly legal use of an offshore entity by a prominent member of the public.
You can see more examples in our free PDF – Politicians, which shows 10+ examples of politically connected persons and celebrities utilizing offshore companies legally.
It’s almost as if the newspapers want to demonize this normal activity, so that you, the normal hard working entrepreneur – assume that this is illegal.
- Owning an offshore LLC is 100% legal.
- It’s safer than being onshore (at least from perspective of avoiding costly frivolous lawsuits)
- It can save you thousands (or millions, depending on your net worth).
- What the media says is largely meaningless and should not affect your decision making
We are here when you are ready, to offer you a free consultation and start you on your journey.
EU Visa Free for US citizens
In our March 28th Newsletter we informed that the European Parliament voted to lift the visa waiver for Americans to enter the EU. Despite this vote, European Commission officials announced that it will not become effective. It seems that the European authorities do not want to enter into a visa war. So whether you were planning to travel or you are a regular visitor to the old continent, you can rest easy.
Automatic Exchange of Information for tax purposes
Times of bank secrecy are over. In 2017 most OECD countries are starting to collect financial information and making automatic exchanges of information for tax purposes (AEOI). Next year another bunch of countries are committed to do it too. Now more than ever, a bad approach on setting tax residency can dramatically affect your tax liability, or even lead to legal issues. We have written on how AEOI works and how important is to establish the proper tax residency.
Trump Tax Reform Plan outlined
Last Wednesday April 27th 2017, the US Treasury Secretary Steve Mnuchin and National Economic Council director Gary Cohn announced at a press conference the Trump Administration’s tax reform plan.
The proposal intends to cut the current progressive federal tax rate to a 15% flat rate and switch to a territorial tax system. Other proposed measures include reduce personal income tax brackets and rates and repeal inheritance taxes. The tax reform plan needs the approval of the Congress and the Senate to get ahead. Representatives of the Democratic Party have already spoken out against it and some Republican party voices are reluctant to see a general decline in taxes.
During May, the Trump Administration will hold listening sessions with stakeholders to receive their contributions and will work with the Congress and Senate to develop the details of the reform, to reach the approval of both chambers. We will keep you informed of further developments.
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