Setting Up a Cayman Islands Company [pdf]
stuartslaw.com
stuartslaw.com
I would love to move the ownership of the forums to some sort of arrangement (offshore) where they are essentially immune to frivolous libel claims. I want attorneys to look at us and tell their clients that it's simply not worth going after us. Is there such a place?
edit: I forgot to mention that my site runs no ads and makes no money whatsoever...a rarity in the forums world. I keep it like this because I love the hobby and I hate all of the other shitty forums sites that are filled with adware garbage. Given this, it's a real hardship when some attorney threatens me with a lawsuit because I just don't have the cash to properly defend myself.
The courts here are pretty sensible. They have 0 issues with telling someone they are just being silly and to leave.
They can still bring a case against you - but, it isn't expensive to defend like the US is.
Edit: If you're really really paranoid, on a Tor onion, hosted on an anonymously leased server, from a tolerant host. And know your OPSEC.
The actions of NZ police in his arrest are inexcusable, and so is the use of government spy agencies to spy on a resident.
But the courts are independent of all that. Kim Dotcom actually just won a $90k settlement from the Human Rights Tribunal.
According to wiki, it was in Costa Rica, not Panama.
OK, didn't protect Noriega.
For me, it is not just about protecting free speech by not having to fear litigation costs, but also privacy: Extremists from left to right make heavy use of what private data they can find about owners of websites and try to destroy them publicly or use threats/actions of violence against them.
(Other example: I repeatedly run across pyramid schemes. Setting up a simple, yet convincing set of facts as a website, that would keep people from being fooled into these is my initial response. But I always restrain from doing so when I look at two things:
- how litigious these schemes often are (it often takes years for authorities to catch up to them)
- how emotionally attached (and often shady) the scheme's propenents are)
Feel free to co-opt my very expensive lawyer T&Cs which were designed specifically for this scenario (if you haven't actually had a lawyer draw up yours they may be a better default for you): https://github.com/microcosm-cc/legal
Ultimately in Europe I now feel fine:
+ EU e-commerce directive has "mere conduit"
+ Reactive moderation sets you aside from a publishing company and fits into "mere conduit"
+ Key thing for you is to not engage in any incidents as a participant, deny you even know that they are occurring... but if someone contacts you and tells you something is shady, etc you should shut that down ASAP - bear in mind that to some extent this does mean the admin of a forum shouldn't be an active user of the forum.
So for just shutting stuff down within a reasonable time, you basically get to be very immune from any libel, defamation, slander, etc that occurs as a result of your users.
Together with the change in UK law that shifted burden onto those raising a claim (they must prove actual damages - a surprisingly hard thing to do), I have not now had any legal threats in about 4 years despite still running as many forums that are barely (if at all) moderated.
A friend and I wrote a forum platform for them :)
As a startup that didn't get anywhere, but the main premise was that forum hosting is expensive (almost 1 server per forum, not very optimised for caching, every page is dynamic, etc) due to them not being on a true platform (shared costs, optimisations, and less waste in CPU and bandwidth), and we also hypothesised that forums have a natural life and when they die they cross-pollinate new forums (total growth in user engagement across communities continues even when a single community dies)... hence it's best to make a platform, and that the reduced costs for all actually makes them financially viable (though when we shut the startup I chose non-advertising and to do donations instead).
This is the forum platform: https://microco.sm but it's not really open for new forums, as I manually have to enable them and I'm concerned about future offboarding requests (not something I support at all).
This is an example of a forum on the platform: https://www.lfgss.com which is the largest, but there are just shy of 300 on a wide range of topics.
We thought we were on to a good thing... but couldn't secure the A round in London. The seed only gets you so far.
I have a slow burning background task to move it from PostgreSQL + Go + Python + Django to PostgreSQL + Go. This will make it a super easy single-binary install, that can also scale out by simply running multiple versions of the Go binary in different modes (API or Web). But frankly... this is a very slow burning background task :)
And if there is a real suit, being offshore won't protect you from the suit. You may be able to get it tossed out for lack of jurisdiction, and ultimately be immune from consequences, but that still means you need to either argue that point yourself it court or hire legal help to get it tossed.
- 100% foreign ownership
- No corporate/capital gains taxes
- 5-year work/residence permits for the team
-- No personal income tax in the Caymans for anyone moving here
From a friend who has gone through the process of setting one up for consulting, the initial setup cost ~30k USD and renewal costs ~15k USD per year.
- you still need an office package https://www.caymanenterprisecity.com/service-packages
- setup is not really that quick and painless
If you'd otherwise pay income tax pretty much anywhere else it might still make financial sense.
https://en.wikipedia.org/wiki/Foreign_earned_income_exclusio...
There is no more tax advantage to the law abiding citizen in this scheme versus just registering an llc in wyoming/nevada and living abroad.
http://www.taxpolicycenter.org/taxvox/why-do-us-investment-f...
Imagine 39% tax, where you compound at 10%.
If you pay tax once per year, that becomes 6.1% after tax.
1.061^5 - 1= 0.34455
Now imagine you compound for 5 years at 10%, then repatriate and pay 39% on your profits:
(1.1^5-1)*.61 = 0.37241
You have 10% more if you defer taxes.
Generally you incorporate off-shore for one to many of these three reasons: tax minimisation, privacy and corporation structuring.
For most people, an LLC in New Mexico, US (provided you are able to enter the US) with a parent company in the BVI is the easiest option.
Overall this will cost you less than $1,000/yr to operate as an LLC with none of your identification or documentation on it, bank accounts and services available in a first-world country, however operating as a proxy corporation for a BVI-based company therefore not subject to corporation tax.
However there are risks associated with this setup, plenty of people have had bank accounts frozen or assets seized temporarily if their accounts are included in a "probably tax evader or drug cartel" report. So it's suggested to never keep funds in your US-based corporation. Use a reputable, US-based accountant for your annual filing to minimise this risk. If you're not a US citizen or resident, the only risk is the possibility you won't have access to your funds for a long period of time (and you'll likely have to fly back to the US to sort things out).
Now, what I've written above is technically legal provided you're not a US citizen, or if you aren't obligated by law to pay federal or state taxes. However, it - and many, many similar structures are used every day for corrupt, illicit and morally bankrupt reasons.
Nobody is interested in fixing this. We've put in Anti-Money Laundering and Know Your Customer regulations whilst simultaneously PROVIDING ways to make sure people can still get away with tax evasion and hiding dirty money (US: insane protection for corporate entities, UK: owning and operating some of the largest tax havens in the world). As the world begins to wise up to these methods, we're already seeing other super-powers begin to offer the same and in some cases much better services. Taiwan and China, I'm looking at you.
Now, VISA, AMEX, etc.. will never want to process these payments. If the Antigua, The Cayman Islands, or Panama have a healthy banking system, what prevents someone from setting up a VISA clone there? As a service provider, if you can work in their banking system as a legitmate bank, all you need is client banks -- And getting a bank account there is reasonable easy from my understanding.
Similar to: https://en.wikipedia.org/wiki/E-gold https://en.wikipedia.org/wiki/E-Bullion
Could you build a similar model to "GoldMoney" (https://en.wikipedia.org/wiki/GoldMoney) without KYC?
Lots of legitimate business happens through the Caymans (for international finance) and Bermuda (for insurance). Wiring U.S. dollars between the Caymans and New York is instantaneous.
The only real exceptions are countries currently embargoed or labeled as a "risk" by the IMF for money laundering.
If you want to start an online casino that just works for the cayman islands, sure. If you want it to work anywhere else you're going to have trouble.
Sure, I understand the appeal - it's the equivalent of hiding a bag of cash somewhere and having a trusted third-party provide the location to whoever you want after your death. No laws, no lawyers, security for your wishes - exactly what you want.
"Tax issues" are synonymous with "I'm liable to pay more taxes if I'm up-front, direct and transparent with my legal structure"
I am not a lawyer or accountant, but I did live and work there for years. The main benefits are tax avoidance, but it's much more difficult for US citizens than for others (most countries don't tax their citizens on foreign income; capital gains laws vary).
People will make all the obligatory jokes about shady rich tax dodgers, and there are rich people and corporations that like to keep money in Cayman for ethically questionable reasons, but the majority of Cayman finance is completely legal, ethical, and above-board.
This sounds like it might be true in terms of number of individual accounts maybe, but do you think that's true in terms of overall asset value?
My guess is that there's probably much more there that's completely legal, but pushes people's buttons because they want to see it taxed at home. Like Apple's overseas billions (which are largely sheltered elsewhere, but you get the idea).
For example, in 2013 the oldest running Swiss bank, Wegelin, (itself older than the US) shut down as a result of a guilty plea for a case brought by the justice department.
https://www.reuters.com/article/us-swissbank-wegelin/swiss-b...