When transferring cross-border capital on a global scale, companies or individuals usually optimize their tax burden through legal and compliant financial instruments and structural design. The following are some common innovative financial instruments and strategies, but it should be noted that ** Strictly abide by the laws and regulations of various countries** to avoid tax evasion or aggressive tax avoidance (such as the scope of the BEPS program)： --- ###**1. Common tax deferral/tax avoidance tools** 1. **Offshore Companies (Offshore Companies)** -Set up holding companies in low-tax or zero-tax regions (such as the Cayman Islands, BVI, Ireland, Singapore, etc.) to achieve tax optimization through capital transfers (such as dividends, royalties). -**Note**: It must comply with the Economic substance Law (such as the EU blacklist requirements) and the CFC (controlled foreign enterprise) rules. 2. **Double Irish with a Dutch Sandwich (Double Irish with a Dutch Sandwich)** -Transfer profits to duty-free areas (such as Bermuda) through the subsidiary structures of Ireland and the Netherlands. -**Status quo**: This structure has been gradually blocked by the OECD and national legislation (for example, Ireland abolished “stateless companies” in 2015). 3. **Debt Financing instruments (Debt Financing)** -**Thin Capitalization**: Through a structure of high debt and low equity, interest expense is used to offset taxes (subject to the debt-to-capital ratio restrictions of various countries). -**Convertible bonds/hybrid instruments**: Combining the characteristics of creditor's rights and equity, different tax treatments may be obtained in different countries. 4. **Transfer Pricing (Transfer Pricing)** -Adjusting profit distribution through intra-group transactions (such as cross-border service fees, patent authorization) must comply with the OECD's “Arm's Length Principle”. 5. **Tax Treaties Network (Tax Treaties)** -Use inter-country tax treaties to reduce withholding taxes (such as preferential tax rates for dividends, interest, and royalties). -For example: an extensive network of agreements in the Netherlands, Luxembourg, Singapore and other countries. 6. **Family Offices/Trusts (Family Offices & Trusts)** -Holding assets through offshore trusts or foundations to realize wealth inheritance and tax deferral (such as family trusts in Hong Kong and Singapore). 7. **Patent Box (Patent Box)** -In countries that provide “patent box” discounts (such as the United Kingdom and the Netherlands), low tax rates will be applied to intellectual property income. --- ###**2. Emerging compliance tools** 1. **Blockchain and Digital assets** -Cross-border transfers through cryptocurrency or stablecoin may avoid some traditional regulations (but pay attention to the trend of tax transparency, such as FATCA/CRS). -**Risk**: Many countries have required cryptocurrency transactions to file taxes (such as the U.S. IRS virtual currency guidelines). 2. **SPV (special purpose entity)** -Set up an SPV at the intermediate holding level to optimize the structure in combination with tax treaties and capital flow rules. 3. **QOZ (U.S. Qualified Opportunity Zone)** - For domestic capital in the United States, capital gains tax is deferred through investment opportunity zone projects. --- ###**Three, key precautions** 1. **Anti-tax avoidance regulations** -**BEPS Action Plan**: A tax base erosion and profit transfer project promoted by the OECD, which requires multinational companies to disclose their tax structure (such as CbCr). -**CFC Rules**: Multiple countries tax the undistributed profits of controlled foreign companies. -**DIVERSIFIED PROFITS TAX (UNITED KINGDOM, ETC.)**: A punitive TAX on artificially transferred profits. 2. **CRS/FATCA** -The global automatic exchange of financial account information mechanism requires financial institutions to disclose the tax information of account holders. 3. **Economic substance law** -For example, the BVI, Cayman and other places require companies to prove that they have actual business activities in the local area. --- ###**Fourth, suggestions** -**Professional consulting**: Cross-border tax planning needs to be combined with specific national laws, bilateral agreements and commercial substance. It is recommended that international tax lawyers or the Big Four accounting firms design the structure. -**Compliance priority**: Avoid aggressive tax avoidance and pay attention to national legislative developments (such as the global minimum tax GloBE rule). If you need to further explore specific cases, you should analyze the feasibility under the legal framework.