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"If you're a bottom line operator, Titan's plans are the only way to go. Our wealth building, asset protection and financial security objectives are all in place."
The Stallings Group

Non-Controlled Foreign Corporations (NCFC)

Non-Controlled Foreign Corporations (NCFCs) transact all business off-shore and are not subject to U.S. tax codes.

The funds are held and invested outside of the U.S. In the case of NCFCs you are a stockholder rather than a single Owner, as in the case of the CFC. No U.S. stockholder can control more than 9.9% of the stock in a NCFC or control more than 25% of the premium funds. Titan Dealer Services recommends an NCFC structure that will provide a "firewall" between shareholders relative to risk exposure.

NCFC funds are subject to Federal Excise tax. If the funds are brought back into the US they are also subject to be taxed as dividends or capital gains. Formation costs are similar to CFCs (about $5000). However, the procedures for formation with a NCFC are significantly less complicated and quicker than a CFC filing. As with CFCs, the corporation realizes all underwriting profits and investment income. The underwriting profits are accrued after all claims are paid and the contracted coverages expire.

Dealer Owned 634

Titan Dealer Services specializes in establishing and managing Dealer Owned Warranty Companies (634 Companies). This highly specialized and regulated product structure provides the dealer with maximum return on this very important F&I product. Some of the advantages of a 634 company are:

Privately held fully controlled ownership
Custom design of coverage
100% control ALL premium dollars
No premium tax
Higher returns

Contact Titan Dealer Services for more in-depth information on Dealer Owned 634 Companies.

Controlled Foreign Corporations (CFC)

Controlled Foreign Corporations (CFCs) are usually formed by dealers in states with restrictive regulations on non-controlled foreign corporations (NCFCs). Funds are held in U.S. banks in the case of a CFC. The CFC realizes all underwriting profits and investment income. The underwriting profits are accrued after all claims are paid and the contracted coverages expire.

Because the company files a 953(d) election, they are considered by the U.S. government to be operating as a U.S. company. The only foreign aspect is the domicile which is used for the smaller capitalization requirements.

Two types of CFCs can be formed, depending on the amount of annual premium deposits you anticipate.

A 501(c) allows tax exemption on all premiums and profits up to $350,000 per year. The corporation must be classified as a "non-life" company (51% or more of total premiums on deposit have to be for products other than credit life). Application approvals for 501© corporations can be relatively lengthy.
An 831(b) is filed for larger reinsurance companies with deposits up to $1.2 million per year. This corporation is tax exempt with the exception of investment income.

CFCs file a U.S. Federal tax return but have no liability for Federal Excise Tax.