There has been a lot of media lately around the “Panama Papers” which is the popular name for a collection of 11.5 million documents leaked from a Panamanian law firm. The documents revealed the existence of over 214,000 offshore companies, most of which were in the British Virgin Islands. The firms’ clients (many of whom were celebrities or government officials) used the law firm create complex business structures to hide their identities and their wealth.
Here in the USA, I’m often asked about using Nevada LLCs or Wyoming LLCs, which offer some privacy protections for company owners. Interestingly, Nevada also does not have a data-sharing agreement with the IRS. Meanwhile, in the eastern Caribbean is a small island called Nevis that is growing in popularity because of its strict anti-creditor laws that protect Nevis LLC owners.
Still, my advice to 99% of my Florida clients, most of whom run “real” companies in the state of Florida is to stick with the plain, simple Florida Limited Liability Company. Florida is a very business friendly state, and most S-Corporations don’t pay any corporate tax at all. Plus, there is no personal income tax applicable to the salaries of the owners either. The hassles and the costs of these “exotic” locations are rarely worth the benefits.
Doing business in Florida will most likely subject you and your company to the jurisdiction of the Florida courts anyway, so running off to Nevada won’t actually help you. (Don’t forget that “diversity of citizenship” is grounds to remove a civil case to Federal court!) Also, don’t forget that YOU are here and your lawyers (ahem) are here in Florida too.
If you have questions about forming a business in Florida or restructuring an existing business, just give us a call. We’re happy to help.