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Re: Corporations



C'punks,

On Tue, 1 Mar 1994, David L Womack wrote:

> . . .
> Let's suppose an offshore corp. is established
> somewhere;  perhaps Grenada, perhaps Belize,
> or where ever.  You work for this corporation;
> the corporation produces a product or service.
> 
> Now, here is where the potential seems to be:
> the corporation generates bills from the offshore
> location.  Customers pay to the corp., mailing 
> to the offshore location.  Constructive receipt,
> then, is offshore.  My understanding is that 
> corporate earnings are subject to the host 
> country's tax, NOT U.S. tax.  And, tax waivers
> are not difficult to get from these other countries.

Yup.  And a variation of this is what's called double
invoicing.  It's one of the things that made Hongkong
great.

> If one wishes to take some risks, the corp. then
> makes a loan to the individual, at a fair market
> rate of interest.  This would be in addition to
> whatever miserly wage the corp. paid to it's
> employees.  Of course, the person would be obligated
> to declare a forgiven loan as income;  they would
> be on their honor to do so, since there would be
> no paperwork....

Congratulations, you have re-invented a time-honored
service of offshore banks and incorporation services.
Of course, there never has to be a forgiveness of the
loan.  It can just be rolled over forever.  Or, the
recipient can use his "loan payments" as a means of 
ex-patriating more money.

I'm really quite impressed with your thinking on this.
Though many sophisticated varients of these techniques
have existed for years, it is quite an accomplishment
to invent them independently.  Unlike some knee-jerk
hand wringing (mixed metaphor?) I have seen on this
list, you have identified the transactional essence
present in successful transnational thinking.

Again, congratulations.


 S a n d y