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Virtual office in Switzerland
Thread poster: Mohamed Mehenoun

Mohamed Mehenoun  Identity Verified
Algeria
Local time: 04:17
English to French
+ ...
Feb 25, 2011

Hello,

I was surfing on the Internet and I stumbled on a page offering a virtual office in Switzerland.

My question is the following, if someone registers his company legally in another country and wants an address in Geneva would it be legal to use the Geneva address in his/her invoices ?

Out of curiosity I contacted the service provider which obviously ensured me that everything was 100% legal and that all that was needed was to have a company which is really registered in another country and a real address in Switzerland (obviously) with a P.O box for example clearly stating the name of your company.

What puzzles me is that he claims you can invoice with the Geneva address without any tax issue in Switzerland.

What's the catch in all of this knowing that I checked the credentials of the service provider and his presence on the market...

Thanks for enlightening me.

Kind regards,

Mohamed

[Edited at 2011-02-25 12:21 GMT]


 

Williamson  Identity Verified
United Kingdom
Local time: 04:17
Flemish to English
+ ...
Legal entity. Feb 25, 2011

No expert, but there is the natural person Mohamed Mehenoun and the legal entity, say "Momen SA/Sprl" , who are two different persons.

Mohamed can be a shareholder in Momen and Momen can do business worldwide and second its employee Mohamed to another country. Taxes are to be paid where the legal entity is situated.
You should consult an expert in fiscal engineering, he'll be able to give more explanations.

Normally, the company will have to pay taxes where it is based. But given that some Swiss places are tax-havens for the rich, I do not know the details.

And yes, in the past I met such a virtual office service too. It was called C ncierge. It doesn't exist any more. The more you paid as a yearly fee, the more services you could avail yourself off, secretarial and accounting-services included. The secretary notifies you when there is mail, by...e-mail and sends it to you by one of the major courier-services, next day delivery.

Such services exists world-wide. Nothing shabby or shoddy about them.


[Edited at 2011-02-25 18:53 GMT]


 

Claudio LR
Local time: 05:17
Member (2007)
English to Italian
+ ...
Sounds pretty vague... Feb 25, 2011

Hi,

I leave and work in Geneva, it's hard to judge without knowing exactly what they offer. Can you be more specific? (no telephone, just a P.O address?). You say you can invoice with the address, how about the bank account? What kind of company in the home country? How much does their service cost? Maybe the best is to have a link to the service (you can send in PM if you prefer)

Kind regards,


 

David Wright  Identity Verified
Austria
Local time: 05:17
German to English
+ ...
No tax issue in Switzerland Feb 25, 2011

Of course not, your tax issue will be in Algeria. Invoicing from Switzerland will not relwase you as a resident of Algeria from your tax obligations. Even if your company were Swiss registered, and therefore not liable for tax in Algeria, the moment you pay money to yourself out of the company it becomes taxable in Algeria. Of course, you might be able to hope taht the Algerian authorities will never find out, but they might just ask how it is you can run a BMW and a big house (like all hard working translators) without any apparent income.

The company would incidentally be liable to the very low (predatory, parasitic) rate of corporation tax imposed by whatever canton you choose to locate in.


 

Sheila Wilson  Identity Verified
Spain
Local time: 04:17
Member (2007)
English
+ ...
Why? Feb 25, 2011

Mohamed Mehenoun wrote:
if someone registers his company legally in another country and wants an address in Geneva would it be legal to use the Geneva address in his/her invoices ?


Hello,

I'm afraid I don't know the law on this either. However, I thought that the invoice address needed to be the registered company address, rather than a branch/shop/home/... address. Maybe other addresses could be used for headed notepaper etc, but I'm not so sure about the invoice.


What puzzles me is that he claims you can invoice with the Geneva address without any tax issue in Switzerland.


That may be true in Switzerland. I know they seem to do everything a little differently there.icon_smile.gif But that raises an associated question: What about the tax issues in your real country? That's where you need to pay the tax on sums received as a result of these invoices. I have no idea what France would think (although I suspect the invoice would be illegal here) but I'm 100% sure they wouldn't decide the money was non-taxable - being domiciled for tax purposes in France means they tax me on my earned income world-wide.

What's the catch in all of this knowing that I checked the credentials of the service provider and his presence on the market...


Turning it around, what's the advantage? You're presumably paying for this service, in fact I imagine it would cost a lot.

Then, all your postal correspondence will be going through Switzerland - how do you get to know when people send you things? If clients are sending cheques to you in Switzerland, how/when do you get your hands on the money? If there's some problem, will you receive official papers before a deadline escalates things?

And then, how many clients will you lose because you display everywhere that you are in one country, then you put a totally different location on the invoice? That would certainly put me off doing business with you, both in my professional and personal capacity.


 

Mohamed Mehenoun  Identity Verified
Algeria
Local time: 04:17
English to French
+ ...
TOPIC STARTER
That's why I asked the question.... Feb 25, 2011

What about the tax issues in your real country? That's where you need to pay the tax on sums received as a result of these invoices. I have no idea what France would think (although I suspect the invoice would be illegal here) but I'm 100% sure they wouldn't decide the money was non-taxable - being domiciled for tax purposes in France means they tax me on my earned income world-wide.

Turning it around, what's the advantage? You're presumably paying for this service, in fact I imagine it would cost a lot.

Then, all your postal correspondence will be going through Switzerland - how do you get to know when people send you things? If clients are sending cheques to you in Switzerland, how/when do you get your hands on the money? If there's some problem, will you receive official papers before a deadline escalates things?

And then, how many clients will you lose because you display everywhere that you are in one country, then you put a totally different location on the invoice? That would certainly put me off doing business with you, both in my professional and personal capacity.



Those are good issues that you are pointing out, however I asked the question out of curiosity and to understand the law in Switzerland more. The main point was to get to know if this was really legal and with no issue whatsoever with Switzerland.

The legislation differs from a country to another and from a continent to another regarding those matters and the use that can be done of such a solution.

Indeed when you are seeing it from a point of view of a European insider this has no advantage, but there could be a couple of advantages for such a service elsewhere.

Given that you are honest about the client of course.



[Edited at 2011-02-25 13:18 GMT]


 

Mohamed Mehenoun  Identity Verified
Algeria
Local time: 04:17
English to French
+ ...
TOPIC STARTER
I'm not try to evade taxes... Feb 25, 2011

David Wright wrote:

Of course not, your tax issue will be in Algeria. Invoicing from Switzerland will not relwase you as a resident of Algeria from your tax obligations. Even if your company were Swiss registered, and therefore not liable for tax in Algeria, the moment you pay money to yourself out of the company it becomes taxable in Algeria. Of course, you might be able to hope taht the Algerian authorities will never find out, but they might just ask how it is you can run a BMW and a big house (like all hard working translators) without any apparent income.

The company would incidentally be liable to the very low (predatory, parasitic) rate of corporation tax imposed by whatever canton you choose to locate in.


I'm not really interested in tax evasion, I was wondering if legally speaking that could be done in Switzerland ! The company and the person are two different entities and as you said from the moment you start paying yourself you are tax liable.

My question was more to understand the ins and outs of the legislation and what can be done and what can't be. I don't really want to start with the tax debate which was discussed in several posts and which isn't the purpose of my question.

I was just wondering if that could exist as I am aware of the concept of "representation" where you can hire someone to represent you company and make contact with clients but you need to be registered and so on...I'm just trying to broaden my culture on what can be done and what can't be done...

Any entity with its paperwork legally notarized can open a bank anywhere in the world more or less so the bank account isn't an issue for a company registered in conformity with the laws of the country where it is registered.

They offer whatever you want from the P.O. box to enable you to invoice and receive mail to a more complex service including mail forwarding, phone call reception and forwarding...etc.


 

Neil Coffey  Identity Verified
United Kingdom
Local time: 04:17
French to English
+ ...
Probably but... Feb 25, 2011

So as I understand, there's a Swiss company that will in effect sell you the use of a postal address in Switzerland. Assuming there's no Swiss law saying "thou shalt not sell the use of a postal address to a non-domiciled Algerian" nor an Algerian law saying "thou shalt not buy the use of a postal address in Switzerland", then in principle I guess you could.

Then you have the issue of the address on your invoice. If things work in Algeria as they do in the UK (and I suspect many countries), then there is a requirement to put your registered business address on your invoice. However, this is worth checking: certainly some of the invoices I've received from US collaborators, for example, seem to be quite ad hoc, informal affairs, so maybe not every country has such a requirement. If Algeria does, it may still be completely legal to put two addresses: your Algerian "Invoice address" (perhaps in 3pt upside down italicsicon_smile.gif, and your Swiss "Correspondence address".

But as Sheila points out, even if it's completely legal, it may "look odd" to your clients and not achieve what you are hoping. It may also look odd to the Powers That Be, and cause you general "hassle" even if not actually illegal.


 

Neil Coffey  Identity Verified
United Kingdom
Local time: 04:17
French to English
+ ...
Bank account Feb 25, 2011

Mohamed Mehenoun wrote:
Any entity with its paperwork legally notarized can open a bank anywhere in the world more or less so the bank account isn't an issue for a company registered in conformity with the laws of the country where it is registered.


By the way, in practice I think this may be more difficult than you're assuming! (Though I suppose I'd be interested to know if I'm wrong.)


 

Mohamed Mehenoun  Identity Verified
Algeria
Local time: 04:17
English to French
+ ...
TOPIC STARTER
Let's put it this way... Feb 25, 2011

Actually, what I want to know is if this can be used as a representation in another country.

I also want to know if the invoices I receive are from where I think they are...

My question was oriented towards Switzerland (the country of the address) on purpose.

I just wanted to know if you a company was bound to give its registered address on invoices or not and what was that makes a company a fanthom company...

I think it's good to understand those matters...It's a pity those issues aren't discussed within the community...It's always good to understand how several countries work ...

For example pn Proz you can see three addresses (one in the US, one in Ukraine and the other in Argentina). It's always good to understand why those countries and what's the difference between each office...

A client of mine has two addresses also, one in Germany and one in Czech. And I don't always invoice him the same address...

Moh


 

Mohamed Mehenoun  Identity Verified
Algeria
Local time: 04:17
English to French
+ ...
TOPIC STARTER
Bank Account Feb 25, 2011

Neil Coffey wrote:

Mohamed Mehenoun wrote:
Any entity with its paperwork legally notarized can open a bank anywhere in the world more or less so the bank account isn't an issue for a company registered in conformity with the laws of the country where it is registered.


By the way, in practice I think this may be more difficult than you're assuming! (Though I suppose I'd be interested to know if I'm wrong.)


In theory, depending on the country specifics you can open a bank account by using apostilled documents in accordance with the Convention de la Haye.

You are supposed to visit the bank in person though...


 

Laurent KRAULAND (X)  Identity Verified
France
Local time: 05:17
French to German
+ ...
Offshore business? Feb 25, 2011

Following what Williamson wrote, I think this is basically what is called creating an offshore business. You will find many indications about companies specialising in such services through the G search engine.

However, and having looked in this matter several times, what I can tell is that this service comes at a price. The minimum I have seen - this is only indicative - was about 800 € for the first year (incorporation fees) and then about 700 € per annum. The most interesting countries are also the most expensive.

And no, this is not tax evasion.

[Edited at 2011-02-25 20:46 GMT]


 

Williamson  Identity Verified
United Kingdom
Local time: 04:17
Flemish to English
+ ...
Non doms and London town Feb 25, 2011

Of all London's attractions to the overseas tycoon, tax is the strongest.
Contrary to what many Britons might suppose, the tax regime here is far more generous to the wealthy than elsewhere. Compared with Sweden, France and Germany, it virtually qualifies as a tax haven.

Foreigners, who live here can claim 'non-domicile' status, meaning they are taxed only on their UK incomes and not anything earned overseas, provided it isn't remitted to the UK. They can live here and, if prudent, pay virtually no tax.

http://www.hsbcpb.com/perspective/non-domicle-status-new-legislation-explained.html


Even in Paris, France there are off-shore formation companies. Just G. Paris + 16ième+off-shore.

Don't know about Swiss bank-accounts, but do know about British: If you don't produce utility bills of the last three months and definite proof of your identity, you can forget opening a bank-account, unless you put £10,000 in a saving-account for a fixed period of time on one of those isles surrounding the UK.

With regard to your question about US, Argentina and Ukraina: (a guess).
US: Incorporation, HQ and Servers.
Argentina and Ukraine: you should think in the direction of wages+ taxes. From 2004-2006; I had a Ucranian girl-friend. She earned a net-income of 100 $ per month for a secretarial job.

Having different legal entities in different countries to devide profits, but mostly losses is one of those fiscal engineering tricks. For specialist advice, consult one of the big five or a professor in the matter at your university.


[Edited at 2011-02-25 22:21 GMT]


 

Mohamed Mehenoun  Identity Verified
Algeria
Local time: 04:17
English to French
+ ...
TOPIC STARTER
Thanks for your clarification but... Feb 26, 2011

Williamson wrote:

Of all London's attractions to the overseas tycoon, tax is the strongest.
Contrary to what many Britons might suppose, the tax regime here is far more generous to the wealthy than elsewhere. Compared with Sweden, France and Germany, it virtually qualifies as a tax haven.

Foreigners, who live here can claim 'non-domicile' status, meaning they are taxed only on their UK incomes and not anything earned overseas, provided it isn't remitted to the UK. They can live here and, if prudent, pay virtually no tax.

http://www.hsbcpb.com/perspective/non-domicle-status-new-legislation-explained.html


Even in Paris, France there are off-shore formation companies. Just G. Paris + 16ième+off-shore.

Don't know about Swiss bank-accounts, but do know about British: If you don't produce utility bills of the last three months and definite proof of your identity, you can forget opening a bank-account, unless you put £10,000 in a saving-account for a fixed period of time on one of those isles surrounding the UK.

With regard to your question about US, Argentina and Ukraina: (a guess).
US: Incorporation, HQ and Servers.
Argentina and Ukraine: you should think in the direction of wages+ taxes. From 2004-2006; I had a Ucranian girl-friend. She earned a net-income of 100 $ per month for a secretarial job.

Having different legal entities in different countries to devide profits, but mostly losses is one of those fiscal engineering tricks. For specialist advice, consult one of the big five or a professor in the matter at your university.


[Edited at 2011-02-25 22:21 GMT]


Thanks for your clarification but I see that this is drifting further and further from the original question to another topic which is fiscal engineering !


 

Williamson  Identity Verified
United Kingdom
Local time: 04:17
Flemish to English
+ ...
Laws of the land. Feb 27, 2011

Isn't "a Concierge" without incorporation and the proper accounting-service not risky. After all, you have to be 100% in compliance with the laws of the land.

 
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