Nemeas | How To Incorporate In A Tax Free Country

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A Corporation

It costs less than $100 to create a corporation. Under the law, a corporation is a separate person from you. Even better, you get to choose the laws that will apply to that corporation.

You can incorporate in any state in the United States or any other country in the entire world. The United States has no power to tax a foreign corporation.

There are some countries that do not tax their own corporations unless they make money locally.

Think about that. Here is just one example of how those perfectly legal rules can be used to earn money, but not ever pay any taxes on it:

A) You create a corporation in a country we will tell you about.

B) You open a bank account in yet another country we will tell you about for that corporation. This is important because the country of the corporation doesn't tax anything if the money is earned and put in a bank account somewhere else.

C) You do business over the Internet. Maybe you sell books, CDs, DVDs or you drop ship real products from one place to another. Your merchant account or PayPal account is in country #2.

D) You reinvest those profits and grow you business tax free. The U.S. has no jurisidiction to tax that corporation. Neither does country #1 where the corporation resides because it doesn't earn any money there. Neither does country #2 because the corporation just banks there.

E) When you are ready to retire, you pick a nice sub-tropical country and buy a beach house for $180,000. This is a huge beautiful beach house in the sub-tropical country you chose because real estate costs about 1/10th what it does in the U.S. It is like having a 1.8 million dollar beach house in the U.S.

You pay absolutely no taxes.

Why? Certainly when you bought the beach house for yourself, that was income from the corporation; right?

Yes it was. You filed an IRS tax form on it and you took the standard deduction of $91,000 that is allowed for each individual residing outside the United States. You took that deduction for both you and your spouse.

Your tax liability for what looks to you like a $1.8 million dollar mansion?

$0 Tax

That's right. The IRS allows Americans living abroad a standard deduction of $91,000 each. It actually goes up every year, so by the time you are ready to travel and buy your mansion, it will probably be even more.

The corporation never paid taxes because the country of the incorporation doesn't tax corporations on money earned outside that country.

The money was earned outside the country (on the Internet) and banking was done in the third country. Very few countries try to tax the activity of merely banking in their country. Some do tax the interest earned on your account, but that is a small amount. You are paying 20% of 5% interest which is a net effective 1% tax rate, so it is nearly the same as zero.

Most businesses don't even worry about interest though. They constantly keep the cash flow going by reinvesting the cash in the business. So if you get a bank account that doesn't even pay interest, you have absolutely no tax liability from any of the three governments involved.

Do you want the details?

Here is a report that I wrote that gives you the specifics including recommending countries to use and vendors to use for incorporating your business...

“How To Incorporate In A Tax Free Country”

Only: $30