Need some advice and suggestions please.
Hopefully I can get some ideas and pointers so that when I go see the accountants, etc, I will have some idea of where to start.
Am considering moving my company off-shore to either British Virgin Islands or Seychelles, which as far as I know are both tax free locations. If not, there are others.
But tax is not the main motivator for this. My company ( one man operation - no other employees ) is in the business of supplying data to clients. The cost of the data that I buy accounts for about 30% of revenue. If I change from a local SA company to an international company, I can reduce that figure to about 10% ( due to pricing structure of the data provider ). So an extra 20% profit is the motivator here.
In addition to the costs that would be saved, I understand that these off-shore havens do not require accountants, book-keepers, tax returns, etc, etc. ( All the kr&p that we spend countless hours sorting out ).
So here's my idea / questions :
Can I set up an international company, and just be an employee of that company ( as I am for my existing cc ) ?
I would then be paid in US$ from the off-shore company direct to my SA account.
My local clients each pay their monthly subscriptions ( direct deposits or via debit orders ) into a local based bank account ( a non-resident account owned by the off-shore company )
Each month I transfer a lump sum from the local to the off-shore accounts.
Would this attract any fees from SARS, considering that it is merely collection of funds for an overseas company ?
How would I bring in lump sums from the off-shore account to myself ? As I am an employee, would that be a 'bonus' that I would receive ? Would it attract more tax than my usual paye ? Is the paye for income from an overseas company the same as for a local salary ?
As an off-shore company, would I be liable to pay VAT on purchases ( considering that the purchases would remain in SA and be forwarded to client who purchase from the off-shore company ) ?
Would I be required to charge my clients VAT on the services that the off-shore company supplies to them ?
I know this is probably a minefield, and that the cost os registering an off-shore company is around R 15,000 but I am looking to reduce my costs by that amount in a single month alone. The added benefit of storing funds ( US$ or Euro ) elsewhere in case things get too problematic locally is also a plus side.
After clearing the tax on my existing local cc company, I can close that down and concentrate on making profits instead of servicing red tape.