I would like to consider the tax deferral provisions afforded to US Citizens. If my corporation formed in a jurisdiction outside of the United States and held US Treasury Bonds (for example) gaining 5% a year, then it would be taxed in that jurisdiction at the corporate entity level and then I would be taxed at the individual level in the United States.
Lets assume that the jurisdiction of formation does not levy a tax on corporations, and also lets assume that there are no additional favorable tax treaties between the United States and other jurisdiction.
Lets assume that everything will be subject to the top tax brackets.
Since I am the manager I would receive distributions at the self-employed rate, which is currently around 13% at the Federal level (more like 6% after favorable deductions), only on the first $100,000 or so of taxable income.
This is much more favorable than having a tax deferred 401k or IRA, where any distributions would be taxed at the 38% federal income tax bracket. Which is not usable till I am 59 or 67 years old, or else I would incur a penalty and THEN tax.
Am I understanding this correctly? Properly reported offshore corporation with investments is better than pre-tax time-deferred funds with investments - if you can afford it