• Jean Franco Fernández Clark

Agency to by-pass pure tax havens financial restrictions. How to

Updated: Nov 30, 2020



There are, in summary, two types of tax havens. One is what most would call a “pure tax haven”, which is (1) a low jurisdiction that does not tax your income generated outside the borders of that jurisdiction, (2) provides secrecy hence it does not disclose nor reveal who owns the company, has not signed information exchange agreement with major players, and (3) has extremely low or no accounting, bookkeeping, tax or financial statements requirements, (4) they usually only impose your a yearly fixed fee as a tax of around 1,000USD; and there are other tax havens, which impose certain KYC and compliance requirements to avoid being blacklisted.


But in exchange of the above mentioned benefits for the pure tax havens, those jurisdictions are blacklisted and tagged as non-cooperative jurisdiction, so for a digital entrepreneur or nomad, or just someone who needs to constantly receive payments online, you will face problems such as lot of paperwork when receiving or sending a wire transfer, and you also won’t be able to access payment gateways such as PayPal and Stripe.


What is commonly practiced to by-pass these financial restrictions, yet keep the benefits of the above mentioned “pure tax havens”, is to open a company in a tax and business friendly jurisdiction to act as an “agent” of the main offshore company (the company in the pure tax haven jurisdiction).


This Agency will be formed in a jurisdiction that has low statutory compliance requirements but has access to the financial system.


In summary, you can create a UK LTD to act as an agency of the main offshore company (a company in Hong Kong, Samoa, Cayman Island, Belize, Vanuatu, or jurisdictions alike), and the UK LTD will pay taxes in the UK based on its income earned to act as an agent, which will be set in the Agency Agreement. The UK LTD will be able to open an offshore bank account without a lot of barriers.





About the author: Jean Franco Fernández Clark. Corporate and International Tax Lawyer from Nicaragua, Central America. Speaks English, Spanish, French, Italian, Russian. 学习普通话

Disclaimer: Nothing in this article shall be considered legal, financial, or tax advice. If you wish to obtain advice you must address your tax consultant or attorney. The publication of this article is for information purposes only and the content in this article comes from personal experiences and it is not by any means a legal or tax advice. Information may not be updated or correct.


0 comments