Startups Stack Exchange Archive

Planning an offshore business structure: Panama Foundation vs Seychelles Foundation

• posted by: user1613797 on 2015-02-18
• tagged: legal, business-structure, buisness-model
• score: 5

I would like to create an offshore structure with Private Interest Foundation and underlying business corporation.

There are two main offshore jurisdictions for foundations: Panama and Seychelles.

But what are the benefits of using one or another?

I know that in Seychelles it is stated in the Foundation Act itself that a foundation has no owners and that the foundation itself is the beneficial owner of the foundation assets.

Is this a big advantage for Seychelles foundations?

Are there any other advantages of one or another jurisdiction?

Answer 5264

• posted by: Denis de Bernardy on 2015-05-12
• score: 1

Insofar as I’m aware it’s basically the same in both jurisdictions:

• Both are tax havens.
• Both allow to form a foundation with no owners.
• Both allow foundations to hold assets and own companies.

So on paper they enable the same thing from a tax avoidance standpoint.

In practice you want to open a business in neither, or in any other tax haven for that matter:

• Their banks do communicate with tax authorities.
• As such, you will get caught if you dodge your taxes.
• Doing business with companies in tax havens is a big red flag for tax authorities – they’ll investigate your clients and suppliers.

Tax havens are convenient for large businesses (and indeed, super rich individuals) who can field armies of lawyers. You cannot.

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