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- are you able to do EFT?
- do you receive your checks in US$? if so, how long does it usually take to get there? any bank deposit issues?
- do you host your sites locally (in the babahas) or is hosting in the US OK?
- what are the US Tax issues?
Is giving up U.S. citizenship worth it?
If one moves to the Bahamas to live, work, play and pay tax one would have to give up US citizenship?
There must be millions of US citizens working abroad legally and not paying US tax?
"I'm planning on opening a Cayman business in the fall of this year if my AdSense keeps paying the amounts it has so far. Only $2000 US to incorporate and you can pay someone to run the company for you, you'll never even have to set foot on the island if you so choose, and best of all, no taxes whatsoever! Imagine, the money you earn, you get to keep, all of it - what a concept. Grand Cayman is completely set up to accomodate offshore companies wishing to avoid paying income tax and has over 700 established banks serving an island population of 40,000. Can't imagine why anyone would be averse to incorporating in the Caymans. "
Every non-US citizen in the affiliate marketing world probably envies (or at least wishes he is) US citizen affiliates with all your inherent advantages.
Some of us have the best websites to show off but couldn't even register to become an affiliate of merchant X because our country is not listed.
I'm thinking of relocating to the Bahamas
I've been there, it was very pretty, gambled at the casinos, not sure I'd want to stay there as hosting and EFT may be least of your problems.
I would read this first:
Then Google around and read some more as I've read more than one story about Americans that get nabbed as the "police occasionally arbitrarily arrest and detain persons" in the Bahamas for whatever reason and they had one hell of a time getting free. I'd also be concerend as Amnesty International claims "one in every 200 Bahamians is in prison" so that's either a pretty high rate of arbitary arrest or the place is running rampant with crime, either way it's alarming.
In the UK we have a legal precedence which Law Lord, Lord Clyde said:
"No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores.
The Inland Revenue is not slow – and quite rightly – to take every advantage which is open to it under the taxing statutes for the purpose of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue.”
This means we have the right to set up accounts wherever we like the only caveat being that we supposedly must declare those earnings if they are used in the UK.
Note I said "used". This theoretically also includes offshore credit and charge cards however I don't know of anyone being done this way...I'm sure there may have been since this would no doubt come under evasion as opposed to avoidance.
Again, to re-state: there is a big difference between tax avoidance and tax evasion – the former is perfectly legal, the latter is against the law, in the UK.
Just for how soon big brother Brussels will try and stop this will depend on many factors which I shall not go into other than say "harmonisation of taxes".
Europeans, you have been warned!
thanks for the very revealing article on the Bahamas. No wonder most people operate their corporations in absentia.
I read somewhere (I'm still verifying) that if you own less than 10% of the stock of a foreign corporation that you do not have to legally declare that as US income. Anybody familiar with this? I do intend to talk to a tax lawyer.
[edited by: limitup at 1:33 am (utc) on May 15, 2005]
"Well all I can say is that I'm glad I'm not a US citizen!"
The same is true for the US. Tax avoidance is legal, tax evasion is not. So exploiting the loopholes in the tax law is legal. A whole industry is dedicated to doing just this. That's why we read that wealthy people pay less to n taxes bexause they can afford to spend the money to exploit the loopholes. Maybe it's more a comparison of how may loopholes there are between the US and Euro countries.
Lifetime likelihood of going to State or Federal prison:
If recent incarceration rates remain unchanged, an estimated 1 of every 15 persons (6.6%) will serve time in a prison during their lifetime.
Lifetime chances of a person going to prison are higher for
-- men (11.3%) than for women (1.8%)
-- blacks (18.6%) and Hispanics (10%) than for whites (3.4%)
Based on current rates of first incarceration, an estimated 32% of black males will enter State or Federal prison during their lifetime, compared to 17% of Hispanic males and 5.9% of white males.
Once in jail, you're toast here in USA. The jail record will make sure that even if you want to go straight you can't (or it's 100 times harder). No one (decent) will hire you.
"In fact, about 1 in every 8 black males between the ages of 25 and 28 are in prison. The statistics are pretty depressing."
"I thought this was about the Bahamas, not sure what US prison rates have to do with this topic and the nasty problems with the police and courts in the Bahamas."
The issue is not whether it is legal to set up a corporation in the Bahamas. It is. The issue is whether you, as a U.S. citizen, are still responsible to pay taxes on your personal income even if derived from a corporation in the Bahamas. You are. The savings come through avoidance of <i>corporate</i> income taxes.
For most people who are earning enough through AdSense to even consider the Bahamas as an option, they should evaluate whether it makes more sense to set up a domestic C corporation, perhaps in their own state or perhaps in Delaware or Nevada, pay themselves a reasonable salary, give yourself fringe benefits, and take an additional annual dividend (avoiding self-employment taxes on that amount and minimizing or eliminating any taxable corporate profits for the year).
The USA is one of only 4 countries in the world that taxes its citizens wherever they live in the world - every other country allows you to legally avoid tax by simply moving to a tax haven country - which is what I'm just about to do
No offence, but I'm very glad I'm not American.
I bet you guys pay a higher % in taxes than US citizens...
Personally I have not paid a penny in income tax for the last 5 years however I did set myself this goal many years ago.
Other taxes are sometimes unavoidable in daily life, I don't smoke which is useful but do drink beer, which is not!
There are many Europeans, like Americans, who do not pay any/much tax and the politicians are the biggest avoiders of all, not just companies etc!
simply moving to a tax haven country - which is what I'm just about to do
Tiebreaker - Where are you moving to? I'm just looking at some property in southern Spain since I've been trying to decide for ages where to establish my winter office.
Limitup - you are talking about money laundring here. It is illegal, but I am thinking about it too. I am living in the country with the highest income tax in the world (somewhere in Europe :-). This means that I have to pay more than 50% of my adsense income to the taxman.
Right now I have my Adsense account on hold because I am saving up for the costs of opening an account in a tax heaven.
This is how it will work:
The google checks will arrive in my mail box every month. I resend them to my bank in Antigua, where I have a visa-card to the account.
I can now cash the money from bankomats, here it is up to 500 USD pr. day, use it when buying stuff anonymiusly (not plane-tickets, hotels, cars, real-estate but nearly everything else)
This setup is very hard to track.