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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 117360
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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What are the legal obligations for a US citizen if I wanted

Resolved Question:

What are the legal obligations for a US citizen if I wanted to start a company limited by guarantee in an offshore jurisdiction?
Submitted: 6 years ago.
Category: Business Law
Expert:  Law Educator, Esq. replied 6 years ago.
If you are talking about setting up an offshore company with offshore banking, there are no laws prohibiting this. The laws merely state you are supposed to claim income and pay taxes on it, but as you may know many people who have offshore companies do so for the purpose of avoiding taxes because that income is not reported to the IRS unless the owners of the company report it themselves. There are some sites that explain how the system works such as and even have services that will set up the company for you.

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Customer: replied 6 years ago.

I believe that the US tax code specifies that if an individual owns more than 10% of an offshore corporation, it has to be declared on the individual's tax return.


That said, a "company limited by guarantee" has no share capital, it merely exists as a club or for some other charitable purpose. It raises the question of "does the company director have to declare the existence of this corporation on his individual tax return?


The "company limited by guarantee" does not exist to pay the principals a salary, merely reimburse costs/expenses if incurred. It stands to reason that if a person is paid from an offshore corporation, they will be liable for taxes to whatever government jurisdiction they live in (or risk money laundering charges).


Also, which IRS publication could one find information about offshore requirements?



Expert:  Law Educator, Esq. replied 6 years ago.
Yes it does say that, but also the way these companies are set up is a trust is set up in the country you use and the trust owns the company. Here is the IRS documents regarding off shore requirements:,,id=110092,00.html

As I said, you do have options and the first site I gave you has several and I have had clients use services from that site and are in operation without any issues.
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