Assets Archives - Accoplus

7 July 2021

Will we all end up being considered has-beens…? – and how to avoid hiring a has-been…

By Raphael in Assets, Corporate Services Tag digital economy, has-been, lawyer

The younger generation is bright, without fear, full of optimism, with not much to lose and everything to gain, with plenty of energy and creativity, with a future not a history.

Should our age, our comfort, our experiences and skills be the shrouds of our careers? Or is this fake notion of work life balance which kills combativity and render the best us of slowly has-beens.

By choosing to live in Hong Kong I escaped de-facto to the notion of work life balance, the recent events (and the corresponding stress increase) plus the nature of the Hong Kong businesses are de-facto destroying what is considered in the West as a good work life balance.

So, I live in a city where we are not accustomed to comfort and where not taking into consideration change of business models and change of laws and regulations could simply erase years of efforts.

This is not the situation of many of my 50+ years old friends which I see with despair slowly becoming has-beens, they are enjoying their life but their clients are not anymore enjoying their combativity and creativity.

They are replacing “let’s try” by “it’s too dangerous”, they protect their business and cease to develop it, they have more excuses than solutions.

On the opposite some 50+ are incredibly temerarious, as if at 50+ they will not have to face the consequences of their actions, they are the most dangerous has-been as they are completely disconnected from reality and living a life as 30 years ago when circumstances were totally different.

Is there a secret to avoid being a has-been?

FEAR is a good tool, the fear to look alike the has-been persons we despair.
MIXITY is a good solution, when one of your business partners is a 24 years old African immigrant in Europe, he doesn’t know your cultural references and you must learn about his experiences.
CURIOSITY is a must so is continuous learning.

But my own preference is DIGITAL, most of the people involved in the digital economy are de facto obligated to continuously change, adapt or pivot their business models, governments are enacting news laws and regulations and the business owners and decisions makers should be agile.

If you want to hire the services of a lawyer, and advisor or consultant if this person is active in the digital economy, you are certain that the person will not refer immediately to a past situation, he/she managed as the evolution of practices and regulations could make it irrelevant.

Instead, the players in the digital economy are imagining what tomorrow’s new reality will be and possess this unique ability for A/B testing their thoughts and advice.

19 March 2021

Will some E-commerce small traders leave Europe because of VAT?

By Raphael in Assets Tag bank account, hong kong company

From a Hong Kong perspective Europeans regulations and administrative pressure are unbearable, the last news about the changes in VAT treatments are welcomed as it will necessarily put once again a free economy on the map. So, Hong Kong and other low tax jurisdictions are ready to onboard new clients.

Chinese and other Non-European traders selling in Europe are in a European point of view accused of abuse and even fraud by not paying VAT, achieving higher profit margins than European entrepreneurs, who do pay VAT abiding to more efficient controls.

Starting July 2021, the situation is supposed to change with the implementation of stricter controls in order to officially regain 7 billion of VAT, part of the 150 billion alleged fraud.

The VAT exemption for low-value shipments will disappear and in principle every delivery in which the goods are imported into the EU will be taxed with VAT.
The new VAT rules affect operators of electronic interfaces (online platforms or marketplaces such as Amazon). As of 1 July 2021, such operators must pay the VAT due on certain sales of goods facilitated via their interface.
The European based E-commerce could choose (or be obliged to) to adopt the IOSS for the declaration and reporting of VAT on distance sales of goods shipped from third countries, if not:
It would be to logistics service providers (such as postal operators and express carriers) to collect and remit import VAT in the name and on behalf of the customer. They must collect VAT from the customer, declare it and pay it on a monthly basis.
Last but not least the last few VAT “avoiders” will be caught in 2024 with the involvement of payment providers in the process (PayPal, Stripe etc..).

Why is this bad for the European digital economy?

Online platforms and market places will without any doubts enforce the new rules, governments are claiming that this would allow a fair competition and enhance the Intra-Europe e-commerce business. Clients will have to pay higher prices for their purchases.

With higher costs some Non-European traders will revisit their costs, when loosing up to 20% of your margin you should renegotiate terms and conditions with your business partners, so its likely to see difficult negotiations about media buying and fulfilment costs.
Some trader will have to pivot their businesses, getting out of platforms and market places to privilege own and operated websites, not only to avoid VAT but more effectively to avoid the constraints of European famous administration.
To enforce these new rules on drop shippers Europe should erect very efficient customs offices, enabling to charge and perceive VAT on the correct value (good luck) without stopping the entry of goods too long, so many shipments and such a low number of customs officers makes it impossible.
The VAT net will de facto focus on traders with a European presence, for many it would be easier to leave Europe and to leave to customs and shipping agent the difficulty to charge and perceive VAT.

Why is this SUPER BAD for the European Economy?

The small traders are young and innovative individuals, the are working on a very difficult environment with low chances of success, any additional constraint will impact them greatly.
When confronted to alternatives between high administrative tasks jurisdictions and an easier and less intensive environment with low taxes if the business is succeeding, an easy choice is on the table, the smaller traders are pushed out Europe.
The choice to be near production facilities is quite logical as it’s the only material element of the business, the rest is immaterial (marketing, media buying, coding) being located in or near China is then a logical step.
Part of the small traders of Today are the big employers of Tomorrow, Europe is pushing out a generation of entrepreneurs and future tax payers.

Governments and advisors are ignoring the DNA of most of these small traders, ignoring their qualities, fears and opportunities.

MOBILITY

Nobody is trapped in his/her country of birth, most of these businesses don’t even need an office location. Business partners are located worldwide, freelancers and other agents are paid by apps.

FEARS

Small traders are more concerned by administrative complexities than by taxes, they evolve in a very dynamic and high demanding environment and would prefer focusing on media buying instead of accounting. They are legitimate entrepreneurs and have fears to be accused on wrongdoings, if and only if, they are successful.

OPPORTUNITIES

The world is small, small traders are welcomed everywhere as they bring businesses, purchase power and future taxes. They know these facts; they are ready to move.

Hong Kong is welcoming small traders and has many advantages:

NO or Low tax environment
NO VAT, NO Capital gain
International and free business environment.
Least but not least: Proximity with suppliers

Dubai, Mauritius, Panama and other welcoming jurisdictions don’t have the same PROXIMITY advantages, making it longer to scale up the businesses.

Being a small trader in Hong Kong is a logical step to success.

5 November 2020

Protecting your assets under offshore trusts

By Nico W. in Assets Tag asset protection, low tax, wealth

Trusts has always been a vehicle to protect the wealth and assets of entrepreneurs. Opting for offshore trusts would depend upon the jurisdiction where the trust is going to be created. In practice, majority of ultra-high-net worth-individuals (UHNWIs) would oftentimes utilize trusts for their retirement, tax, investment, wealth, and estate planning schemes.

Most trusts vary in their characteristics, regardless if the trusts are in the form of revocable, irrevocable, discretionary, fixed and hybrid options. All these sorts of trusts would have advantages and disadvantages, depending on the use and its ultimate purpose.

One person

No matter what type of trust is utilized, the settlor and its beneficiary can always be the same individual. This way, an arrangement with a third party is already null, and this structure is always a preferred option for UHNWI’s. In context, the trustee is normally elected by the settlor and its trustee would be expected to manage and take over the estate in case the settlor is incapable.

Why venture to offshore trusts arrangements?

First of all it offers protection. An offshore trust is innately confidential and private in nature. This is why your wealth and assets covered under a trust will retain its privacy integrity since you are shielded with controls to protect you identity and prevent third parties from prying or taking access to that wealth or assets.

Secure investments in a global scale

Taking into the form of tangible investments (e.g. capital, real estate, cars etc.), which makes it more convenient to transfer and manage overseas.

Uphold asset protection

Deciding to create an offshore trust will definitely be a problem solving starter pack. We know fully well that divorce, inheritance, bankruptcy or asset seizure is a very messy problem, and merely having an offshore trust will give you a safety net to prevent your assets from being seized and acquired forcibly.

Jurisdiction

this is key in protecting your assets since countries of these offshore locations are not covered by laws of other countries. In other words, if you have an existing trust, you can be assured that if a foreign government tries to seize your assets, they will never get pass the laws protecting that trusts by the offshore jurisdiction where the trust is covered under. However, it is not advisable for US nationals to appear in trusts arrangements in any legal capacity since the US will definitely have a reach on those assets held in trusts.

Low tax

If your goal is to protect your assets while benefiting from a very low tax obligation, then moving into an offshore trust is necessary. Although offshore trusts differ from the traditional trusts, going for the former will definitely offer more asset protection and security.

Whether you are protecting your assets from being covered on a marital property in a divorce, or preventing creditors from filing claims against it, or any other personal motivations whatsoever, one thing is for sure, your assets will be protected regardless of if your circumstances are unfavourable.

For your reference, there are other forms of trusts built solely to serve its original purpose. Usually it can be Marital Trusts, Credit-Shelter Trusts, Asset Protection Trusts, Dynasty Trusts, Spendthrift Trusts, Standby Trusts, and Charitable Trusts. Motivations in creating a trusts would differ from case to case basis, but oftentimes, trusts serve as a way to manage assets, to significantly reduce tax obligations or probate costs, preventing spousal coverage in a marriage, protecting the assets from creditors in a bad debt, and most importantly, the most popular use of trusts as being a way to ensure a multi-generation transfer of wealth.

Category Assets