A $200M Shell Game in Seychelles | Hacker News Reader

A $200M Shell Game in Seychelles

thedailybeast.com

59 pointsnols16 comments

I did a lot of research on offshore corporation structures when I was planning to freelance whilst travelling.

The Seychelles consistently came up as the cheapest location to incorporate and their reporting requirements are basically non-existent.

> "The identities and personal details of the beneficial owners, directors and shareholders are NOT part of public record for a Seychelles IBC. At registration of a new IBC, the Registrar of Companies does not require any data whatsoever on who is the actual beneficial owner of the new company. This information is only known to the licensed Registered Agent of the company and is kept on internal file by the company."

Combined with nominees makes you virtually anonymous to authorities around the world.

>The Republic of Seychelles is an independent country. As such, it is not sharing or reporting information to any overseas "principal", or organization. Seychelles is not subject to the EU Savings Tax Directive, unlike some other offshore financial centres, which are related to the EU member states (primarily, to the UK and its overseas territories). The offshore financial services sector contributes significantly to the country`s GDP. There is an inherent interest with the government and with the general public to maintain and develop the country`s status as a competitive offshore financial centre.

They also, at the time, allowed bearer shares which are very useful tool for money laundering. It looks like they don't allow this anymore.

So which solution did you adopt in the end?

I incorporated in Hong Kong which has the same tax advantages but with more stringent reporting requirements (you will actually need an accountant).

The main reason was because the banking system is much better in HK than in the Seychelles. You could open an account in another country but many won't touch a Seychelles IBC with a barge pole. HK has a better reputation.

Incorporating is easy. Getting a bank account can be difficult.

Thanks for bringing this up. I've had the same experience.

Doing a virtual business based nowhere, where even my own country of residence is constantly changing, it made sense to explore the lean efficient jurisdictions for incorporating.

For what it's worth, I've tried a bunch of incorporators, but found the best success with Trident Trust. Great bang per buck:

http://www.tridenttrust.com/corporate_overview.html

http://www.tridenttrust.com/PDFs/Companies-IND.pdf

But like "hackerboos" said here, the hard part can be finding a bank willing to open a business bank account for your foreign company.

So contact your bank first and ask. Especially if you have an existing relationship there.

At Wells Fargo, for example, I was able to just walk in, talk to my usual dude who knows me by name, and open an account for my foreign corporation in 15 minutes. He didn't care (or even seem to notice) that it wasn't a U.S. corporation. All they cared about is that I had my U.S. Tax ID#. (IRS form SS-4.)

But even with international-friendly banks in Hong Kong and Singapore, even ones where I had a deep relationship, I've found they're averse to opening accounts for foreign corporations. They require a lot of extra paperwork, and a $50k minimum balance, but will do it.

I recently set up an HK corporation and bank account with HSBC and had no requirement for a minimum balance. I think there is a monthly fee if your balance is below some low amount, but that's it.

Adding another data point(s) there: I opened two HK companies (with much the same reasoning as you did), about 5-6 years ago and again about a year ago. The first time was smooth and the bank account happened without a meeting (at HSBC) although I didn't use the structure and folded it a year later.

The second time was a lot less smooth, I had to fly to Hong Kong to meet HSBC, and after they took a relatively annoying processing fee and grilled me on my business model (IT consulting), rejected my application with no explanation about 3 months later. The agent told us most foreigners were routinely declined these days although they didn't know why.

We thus opened a company in the UK instead (yes, it's still a great offshore location!). Fast (minutes on the Companies House website), cheap (< 100 GBP?) but the bank (Lloyds) hit us with a fraud check which months later is still not resolved, despite reams of paperwork travelling around and notaries public making a small fortune in certifying documents, and my co-founder being a UK resident. Lloyds asked us for more information than the Singapore Government did for my PR (equivalent to US green card) application. Since you can't do business on a personal bank account if you have a UK Ltd, that structure is basically inactive.

As a third data point: I (UK national) set up a company (also IT consulting) in HK just a few months ago without any problems. I still had to fly to HK for the bank account, but they set it up the same day.

Lloyds has terrible, terrible customer service. I mistakenly chose them as my bank when I did consultancy through a limited company in the UK. Never again.

Which bank would you recommend in the UK?

I really don't know. My accountant recommended Cater Allen, and they seemed pretty on top of things when I phoned them up. Unfortunately I couldn't satisfy their paperwork requirements though, which is why I went with Lloyds in the end.

HKs reputation is only slightly better. In some industries(ones that include copyrights, for instance) no one will touch an HK entity either.

I was really, really hoping this was about a well-produced terminal based video game

Seychelles would be a cool name for a new shell...

And just because I can: She said "seyschelles' just like c shell

"A Two Hundred Million Dollar Dollar Shell Game"

Ok, s/Dollar//.

"A Two Hundred Million Shell Game"

Oh? No "g?" Carry on.

Funny that the url of the post is "/a-billion-dollar-shell-game-in-seychelles.html"

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