Tax Planning Vehicle
This type of company is used for tax planning and structuring, offering to minimize the overall effective taxation.
The company pays a low rate of tax (1.5 to 3%) on its profits and situated in a jurisdiction where there are no withholding tax and no capital gains tax. By using the double tax avoidance treaties, it minimizes the overall taxation. Each solution needs to be structured according to the country where business is to be conducted, as well as the resident state of the beneficial owners.
Who is it for?
EXAMPLE OF USING A SEYCHELLES – INDONESIA DTA
(This is merely an example using illustrations and should not be construed as Tax Advice).
Mr Joe Bloke wants to invest some of his private wealth in an Indonesian Private Company. He has contacted OCRA to provide the most tax efficient way to achieve this. OCRA has undertaken to work out a feasible structure to invest into an Indonesian company, outlining the advantage of using a treaty company as opposed to a non-treaty or tax exempt company. OCRA will not get involved in the personal taxation of the promoter.
Investment directly in Indonesian Company
Use a Seychelles CSL Company to invest in the Indonesian Company and take advantage of the DTA signed between the two countries.
With the above example, assuming a turnover of USD 500,000 the difference in tax savings through a BVI company as opposed to a Seychelles company is USD 30,395. Accordingly, the more the turnover increases, the more the savings.
The above illustration has been calculated on the assumption that:
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