What is Re-Invoicing?
Re-invoicing is the establishment of a tax haven company to act as an intermediary between an exporter and his customers. The profits of this intermediary company and the exporter allow the accumulation of some or all profits on transactions to be accrued to the offshore company. It should be noticed that a similar structure can be utilized by an importer.
What Would Be an Example of Re-invoicing?
An exporter company sells US$1,000,000 of exports to France normally every year. Assuming cost of goods sold and operating expenses are US$600,000 the exporter company earns $400,000 on its sales before taxes. Taxes will average say US$160,000 thus reducing net profits to US$240,000.
The exporter establishes a tax haven company to act as intermediary managed by www.Finor-Group.com. The exporter company sell its products to the offshore company on paper for say US$600,000. The offshore company in turn sells the goods to the French client for US$1,000.000. The offshore company, thus earns US$400,000. Since there are no taxes, US$400,000 is the net income after taxes. The exporting company shows no profit. (US$600,000 gross sales less US$600,000 cost of goods sold).
The US$400,000 in tax-free income is then deposited in a bank account or other investment instrument in London, New York, Miami, Nassau, or Panama according to the wishes of the exporter. The account is under the control of the exporter.
The basic process of re-invoicing saved the exporting company say US$160,000 in taxes less a small re-invoicing charge.
Why Are the Offshore Company's Profits Free of Taxes?
The intermediary company is formed in a country that has no taxes on import-export transaction. For example, the British Virgin Islands and Panama have no income taxes on re-invoicing transactions.
How Is the Offshore Company Structured?
To provide anonymity, the nominee directors are provided by www.Finor-Group.com who manage the company. Bearer shares are issued and delivered to the owner as proof of ownership.
Will the Offshore Company's Bank Account Have To Be Located in Panama?
No, the management company can establish the account with any financial institution in any major financial center in the world. For example, many re-invoicing clients have established bank accounts in New York, London, Geneva, Luxembourg, Hong Kong, etc.
How Does the Staff of www.Finor-Group.com Know What To Re-invoice?
The beneficial owner of the intermediary company provides instructions on a regular basis by facsimile, e-mail, courier, or airmail.
What About Confidentiality?
It is the policy of www.Finor-Group.com as well as the laws of all the tax haven nations concerned that information is not released without the consent for violations of secrecy laws.
What Happens To the Offshore Tax Free Profits that Are Earned?
They can be immediately released as instructed by the owner or alternatively they can be accumulated offshore say with a major international bank where interest on deposit accounts is not subject to tax.
If the Offshore Company is Managed from Panama, Does it Follow that the Merchandise Has to Be Sent to Panama?
No. The merchandise can be sent directly to the exporter's client. The only functions performed, in Panama, are the preparation and dispatch of the new invoice and the management of the banking operations.
What Happens if the Owner Should Meet with a Fatal Accident and the Offshore Company at that Time has in its Name Substantial Assets such as Cash?
Assuming you ensure that your beneficiaries have access to the bearer shares, then if such a case should occur, they would simply produce the shares to the management company together with some sort of evidence of your incapacitation and all control of the assets will be transferred to them. There would be no transfer taxes, estate duties, or other forms of taxation levied on the assets.
What Other Functions will www.Finor-Group.com provide?
Once the offshore company has been established, www.Finor-Group.com will arrange for a post office box, telex, telephone, and facsimile service available for use by the offshore company. The management company will then begin re-invoicing.www.Finor-Group.com employs multilingual personnel capable of handling any type of transaction including sophisticated letter of credit facilities. The staff is composed of mostly corporate administrators, bankers and accountants.
What are the Fees for Re-invoicing? How do I Determine whether such Operation is to my Financial Advantage?
The set up costs are generally less than one would think which includes letterhead, telephone, telex, facsimile, mail service, as well as a Panamanian or British Virgin Islands offshore company. There will be a 2 to 5% (usually 2%) charge on all re-invoicing operations. Reasonable out of pocket expenses are additional, but prior to be agreed on. Annual renewal fees are minimal.
Please contact us for additional information.
