Just as with respect to Foreign Base Company Service Income (The Foreign Service Corporation in Transnational Corporate Structures, October 21, 2013/Corporate/Federal/International/Tax Blogosphere/TaxConnections/United States) the Foreign Base Company Sales Company is subject to the Subpart F Income provisions. But there are safe harbors where a controlled foreign corporation can avert the controlled legislation by structuring its activities. This enables one to establish cost saving efficiency and avail itself of a low tax jurisdiction in achieving that result.

This writing is organized to set forth these governing provisions and bring them together to provide a practical application to the Foreign Sales Company Income and its utility in the corporate structure in international enterprise. This basic introduction to offshore financial corporate structuring should assist in a logical approach in applying these overall concepts. The operational phase incorporates planning options in relation to the obstacles brought to bear by Subpart F Income treatment.

Foreign Base Company Sales Income and Manufacturing and Production

One of the more conventional corporate structures and use of Offshore Financial Centers is the establishment of a sales company. The main purpose is to attribute part of the sales functions to a separate enterprise to avail itself of low tax jurisdiction and improved proximity in foreign markets. Read More