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BlauStein: Interesting Facts
Contract Agents for Offshore Zones
Control of offshores limits the use traditional offshore jurisdictions. Composite structures make it possible to circumvent restrictions and get rid of “offshore image”.
The first part of this structure, visible for all, is a company from a respectable country with common taxation. It is known as a “facade” company. It is almost impossible to see that taxes are minimized.
The “facade” company makes an agent agreement with an offshore company. According to this agreement the “facade” company is the agent of the offshore company and carries on business under its name but on the instructions of the offshore. The offshore company is obliged to pay a commission charge as a percentage of turnover to the agent. In some jurisdictions the agent can receive fixed payment.
The most popular “facades” in those schemes are companies from the Netherlands and Great Britain. For more confidentiality the shareholder of the “facade” can be a Trust or Private Fund. As offshore principals, companies from the classical offshore jurisdictions are used. In these countries it is not necessary to make financial reporting, there are no taxes and low costs of service.
Multilevel schemes are also used for establishing holding structures. A “facade” is a company from the jurisdiction having Double Taxation Avoidance Agreement with the country, on whose territory income is drawn. The “facade” covers the company from the country with low taxes, which has the Double Taxation Avoidance Agreement with the “facade”. The example of this structure is the Netherlands + Hong Kong.