It is often advisable for foreign domiciliaries to have at least three overseas bank accounts:

• The first account for existing capital
• The second account to deposit the proceeds of any asset disposals
• The third account to contain the interest from the first two accounts, along with any other foreign source income

Note: The aim is to segregate your foreign income or gains.

If you want to bring money into the country you should first remit funds from the first account. This can usually be done free of tax. If further funds are required, then withdrawals can be made from the second account, which could effectively subject the withdrawals to capital gains tax. Finally, withdrawals from the third account would be subject to income tax.

If you’re going for an offshore structure Panama is probably one of the best options. A Panama trust or foundation, holding a company with a Panamanian bank account (e.g. Banco General HSBC Panama, Banco National) is a sound choice.

To take full advantage of moving your business offshore, you should do the following:

• Register your company offshore (e.g. Costa Rica)
• Have your website hosted offshore (e.g. Hong Kong)
• Open a bank account offshore (e.g. Panama)

The advantage of setting up your business this way is that it allows you to access all profits outside the USA (or whichever country you reside in) tax free.

I’d like to hear what you’ve got to say about forming an offshore company. Please leave a comment…