A. Start with a business earning and distributing
profits to the owners.
B. Identify payment streams (expenses) that can be
paid by the Operating Company to newly-formed black box companies.
C. In other words, "out-source" services
and other business expenses to the OCC Plan™ black box companies.
D. Identifying payment streams within OCC Plan™
1. Separate Operating Company
into various payment streams.
2. "Out-source" services
to family-controlled entities (magic black boxes).
a. Create a payment stream from
the profitable operating company to the family entities. In the foreign
investment context, this means expenses paid by the company operating
in the foreign country which will reduce its profits.
b. Since the OCC Plan™
black box companies will invariably reside in a tax haven, there will
be no income tax charged to the black box company; however, depending
on the ownership percentage of U.S. taxpayers, there could be taxable
income attributable to the U.S. owners.
3. Examples of OCC Plan™
payment streams:
a. Income from licensing the
tradename and other intangibles related to the business;
b. Administrative, marketing
and promotion services;
c. Sublease of the premises;
d. Employee Leasing;
e. Income from financing or factoring
receivables for the business; and
f. Equipment Leases.
4. Example: Anytown Carpet takes
full advantage of the OCC Plan™ black-box concept.
a. The foreign-based entity,
called Operating, sells carpet to the public in the foreign country
and is subject to creditor claims and lawsuits, as well as taxes on
its profits;
b. Another entity licenses the
name and trade dress to Operating;
c. Another entity provides financing
- factors (purchases) Operating's receivables;
d. In some cases, depending on
the laws of the foreign country --
1) Another entity can be formed
to lease or sublease a building to Operating;
2) Another entity can be formed
to lease equipment to Operating;
3) Another entity can be formed
to employ workers and lease them to Operating;
4) Note: With each non-operating
OCC Plan™ black box entity-
(a) There are no employees;
(b) The income stream is
not subject to employment taxes;
(c) Members of the family
may own the non-operating entities in various percentages;
(d) Each is a separate, limited
liability entity (LLC or corporation), thereby providing asset
protection; and
(e) Dispute resolution and
management of OCC Plan™ is based on U.S. law and the forum
is neutral, such as arbitration or resort to the courts in the
State of Delaware.
