Question about a US citizen having an interest in an off shore corporation

[offshoreguy]

What is the name of your state (only U.S. law)? New York

So, here's the situation:

Partner A (me): Resides in the US
Partner B: Resides in a foreign country

Both of us will have an equal stake in an off shore corporation. Partner A wants to do everything legally with regards to taxes/laws. Partner B has no issues with regards to taxes or other laws in his country.

Here's my questions:
- What is the best country to incorporate in?
- Can I have a US (most likely Delaware) holding company to hold the stake in the off shore company? Is this advisable? Directly holding a stake in an off shore company seems to be an issue for US citizens now.
- What type of attorney should I be looking for to do the setup on this?

The way I'm thinking of having this set up is:

Partner A owns 100% of a Delaware C corporation. The Delaware corporation owns 50% of the offshore corporation. Partner B directly owns 50% of the offshore corporation. Any payouts from the offshore corporation will be a dividend. Partner B receives his directly, My Delaware corporation will receive my share, which I can then pay to myself in the form of a salary, or pay corporate income taxes and pay it to myself as a dividend, or pay corporate income taxes and retain the income in the corporation.

 

[LdiJ]

What is the name of your state (only U.S. law)? New York

So, here's the situation:

Partner A (me): Resides in the US
Partner B: Resides in a foreign country

Both of us will have an equal stake in an off shore corporation. Partner A wants to do everything legally with regards to taxes/laws. Partner B has no issues with regards to taxes or other laws in his country.

Here's my questions:
- What is the best country to incorporate in?
- Can I have a US (most likely Delaware) holding company to hold the stake in the off shore company? Is this advisable? Directly holding a stake in an off shore company seems to be an issue for US citizens now.
- What type of attorney should I be looking for to do the setup on this?

The way I'm thinking of having this set up is:

Partner A owns 100% of a Delaware C corporation. The Delaware corporation owns 50% of the offshore corporation. Partner B directly owns 50% of the offshore corporation. Any payouts from the offshore corporation will be a dividend. Partner B receives his directly, My Delaware corporation will receive my share, which I can then pay to myself in the form of a salary, or pay corporate income taxes and pay it to myself as a dividend, or pay corporate income taxes and retain the income in the corporation.

I will tell you that this is beyond the scope of an internet forum. You need a CPA, preferably one affiliated with a tax attorney, who specializes in clients with foreign assets. The tax reporting is complex, and the penalties for getting it wrong are enormous. However, if you get it right, its pretty smooth sailing, just complex.

However yes, you can have a US C-corp own stock in the foreign company, and receive income from the foreign company, and that does simplify your personal taxes enormously.

Again however, there may be a way to structure your business relationship that does not actually require you to own any part of a foreign business, depending on exactly what kind of business you wish to conduct...and where you wish to conduct it.

 

[offshoreguy]

Oh, I know this is way beyond the scope of what I can get off some message board, I'm just looking for a starting point.

I'm 100% going to get an attorney to help me set this up.

So it sounds like me holding a holding company to hold the off shore company is the way to go. I don't care if the company gets audited, I just want to avoid any personal issues.