Structuring Your CompanyBy William CatePublished October 1998[http://home.earthlink.net/~beowulfinvestments/] [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/] In Can...
Structuring Your Company By William Cate Published October 1998 [http://home.earthlink.net/~beowulfinvestments/] [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]
In Canada, you'll pay 60% taxes on your pretax profit. In the United States you'll pay Federal and States taxes on your pretax profit. This means that a California business pays 41% in taxes. You make money when you save on taxes.
I'm not an attorney nor an accountant. I'd advise that you discuss tax strategies with your tax advisers. I'm offering the following from my business experience. I work on the premise that you must pay taxes in the jurisdiction in which you earned the money.
If you have a local business, don't incorporate in a tax haven state, like Nevada. The taxing state will still want their taxes on the money you earned.
Too many local businesses incorporate in such a way that the corporation pays taxes on the business income and the owners pay taxes on the proceeds from the corporation. If your corporate pretax profit was $100 in California, after taxes your company has $59.00. If you pay the $59.00 to the owners, they must pay taxes and the after tax profit is $34.81. To avoid paying 65% taxes, the owners should never have incorporated. They should have asked their tax adviser about forming a LLC.
If you have a national business, incorporation in a tax haven State may make sense. Compared to California, you'll save 8% on your company's income taxes. If the State tax savings justify tax haven incorporation, do it.
If you have an international company, incorporation in a tax haven makes sense. It won't save your company taxes on your U. S. or Canadian business income. It will save you 40%-60% on your non-North American business income. This strategy is being used by almost every multinational corporation in the World. It's an inexpensive tactic that will save your company hundreds of thousands of dollars. If you need help creating a tax haven corporation, please contact me.
Whether you are a business owner or investor, you should consider a global approach to money and investment. The International Money School offers an excellent primer in sound global money management. If you would like to attend the next one-day course, please contact me.
To contact the author: Visit the Beowulf Investments website: [http://home.earthlink.net/~beowulfinvestments/] Or, visit the Global Village Investment Club Website: [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]
He has been the Managing Director of Beowulf Investments [http://home.earthlink.net/~beowulfinvestments/] since 1981 and is the Executive Director of the Global Village Investment Club [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]