I think you need to report any interest in any foreign company. And I do know that you need to report any interest or authorization on any bank account that holds more than $10,000 at any time throughout the year - so if you do have a shell corporation it must be reported.
I think the IRS considers also how many own the company; if it is one person or only an family, and it is not a full corporation per US consideration (not an LLC or partnership, but an actual C corp) then you are responsible for tax on all profits. Only an actual C corp style company is tax-deferred; however, many nations do not allow foreign held C corps. They only allow S corps, LLCs, or partnerships.
Even if you can successfully defer your taxes, you still have to report your interest in that foreign company and foreign bank accounts - so the IRS can take a look at what you have around the world...
If you have the money tied up in a shell corporation and that money isn’t actually sitting there and it is invested, the balance is zero.
You don’t work for the company, the company had no income either. it is just a shell.
All profits are paid into it and it just turns it over and invests it again.
You might have to report under some circumstances, but no the income is zero, you have no tax to pay.
So Shell A has Broker B invest in Company C, Shell A has a bank account, but it is always zero. Broker B just receives profit from Company C and reinvests it into Company E.
You don’t work for them, the money never goes into your bank account or even Company A’s.
It is the same thing that happens in the US with your broker account, you don’t work for your broker and you are only responsible for capital gains on your investment.
When you moved the money off shore, you had already paid income tax on it too.
One other thing too, your corporation is the one that has to report as a foreign corporation.
There is an IRS Form for that but they only report if they have transactions with a US Entity during the year. Transfer of assets.etc.... but they don’t, so they don’t, so you don’t have to pay either.
Basically you have a firewall, but you will never be able to touch the money....so it sucks.. but if you are rich, you don’t care...it beats a mattress any day.