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Craig's Corner - Wealth Planning Insights

Sunday, May 1, 2016

Nevada: The Cayman Islands of the United States

Why do foreign investors favor Nevada shell corporations?

When Americans hide money offshore in tax havens such as the Cayman Islands, the United States government often expresses outrage. Over the years, it has pressured Switzerland and other foreign countries to stop providing Americans with a way to hide assets.

Nevada Holding Company Figures Prominently in Panama Papers

For foreigners and some Americans, however, parts of the United States are very similar to the Cayman Islands—specifically, states such as Nevada, which offer anonymity and friendly corporate laws. A recently leaked trove of documents, the so-called "Panama Papers," shows that Nevada-based shell corporations are the choice of many prominent foreign leaders and business people and were used to hide money embezzled from Brazilian oil company Petrobras.

What Is a Shell Company?

A shell company typically has no assets or operations of its own and may be used simply as a vehicle for business transactions. Shell corporations offer anonymity and can offer tax benefits in certain situations. Current laws permit foreign citizens to create shell companies that have no revenue or operations in the United States.

 

 

Why a Nevada Shell Company?

 

Nevada requires very little disclosure of ownership of a corporation. While one still needs to list a local registered agent and "manager" when setting up a shell company, the "manager” need be a human being and can simply be another company in another state or country that offers anonymity. The following are some of the reasons to incorporate a shell company in Nevada:

•           Nevada has lenient reporting and disclosure requirements

•           Ownership of the company is not a matter of public record

•           Directors can change corporate bylaws on their own

•           There are no minimal capital requirements to form the corporation.

A Nevada Shell Company Many Not Shield You From Laws of Other States

A Nevada corporation is not always the answer for businesses that have operations elsewhere in the United States. Though Nevada has no corporate or individual income taxes, businesses incorporated there may still be subject to taxes in other states where they are qualified to do business. They may also be subject to the corporate laws of those states. But if they are not, there remain many advantages to incorporating in Nevada.

Whether a Nevada shell company is right for you depends largely on where you or your operations are based and how you intend to use the company. An experienced Nevada business attorney can explain how the process works and whether incorporating in Nevada would accomplish the objectives you seek.


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S. Craig Stone II of Stone Law Offices, Ltd. serves clients throughout Clark County, Southern NV, Las Vegas, Henderson, Boulder City, North Las Vegas, Summerlin, Carson City, Reno, Washoe County, and Nye County. Also serving clients with asset protection nationwide.



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