The Chinese Boxes and the Game of the Double Names.
In case it is necessary to conceal the ownership of a company, one of the stratagems more adopted is that of the Chinese boxes. It deals with corporate structures where a holding company, generally situated in a tax haven, holds a majority share of a smaller company, which in turn controls a further society, and so on. In this way, it is very complicated to find the real beneficiary.
Regarding the game of the double names, it is a system often used in an illicit way to evade taxes. It consists of incorporating two companies with the same name, one headquartered in a tax haven and the other in a state with an ordinary tax system. The first company will open the bank account and will manage the liquidity, while the second one will be used for invoicing.
To get the invoices paid, one would provide his clients with the bank account details of the offshore company which doesn’t have any connection at all with the second company. This makes it possible to hide the money without arousing suspicions in the country of residence of the client.
Example: two companies are incorporated Alpha, one headquartered in the Cayman Islands and one headquartered in the United States. The American company invoices a European client and provides the details of a bank account in the Cayman. The tax authority would activate its controls for an invoice coming from a tax haven, but it will hardly check an invoice coming from an American company.
ISOG lawyers and attorneys at law are expert in the functioning of the Chinese boxes and the game of the double names. If you need to organize your business and get the maximum benefits from a sound corporate structure, please get in touch with ISOG lawyers and attorneys at law.