Sonder’s senior partner in tax havens

Controversial multinational Sonder has teamed up with a company whose shareholders are associated with the Bahamas, a tax haven, for two apartment rental projects in Montreal.

In recent weeks, our Bureau of Investigation revealed that Quebec gave $50 million to Sonder ($30 million in loan and $20 million in investment). The company operates 389 Airbnb properties in Montreal, in the midst of the housing crisis.

In January, Sonder proudly announced its partnership with Prime Properties for two projects.

One of them is located near Concordia University, downtown, and has 157 apartments. This is the largest Sunder project in Montreal ever.

A second project was planned in Old Montreal. So, Sonder rents out an entire building to Prime, to offer these apartments for rent on the tourist accommodation platforms.

Carsten Rampf, president of Prime Properties owner of the building.

screenshot rumpfeurorealty.com

Carsten Rampf, president of Prime Properties owner of the building.

subordinate peep shows in the Bahamas

Prime Properties is a major player in the downtown real estate market. Its founder, businessman Carsten Rampf, made a fortune in real estate, but also in running arcades and peep shows, in Montreal.

Prime Properties is owned by New Brunswick which in turn is owned by a company based in the Bahamas. Karsten Rumpf, its president, has also been established in this tax haven since the 1990s.

He also owns a lavish residence there in one of the most select communities in this Caribbean country.

The Bahamas has long been considered one of the main tax havens for Canadians. In 2010, Canada entered into a tax information sharing agreement with that country to combat tax evasion.

However, tax laws remain extremely beneficial to businesses.

Quebec revenue problem

Euro Immobilien, which is today the ultimate shareholder of Prime Properties, has been in the Bahamas since at least 2001.

A few years earlier, in 1996, Karsten Rampf had feuded with Revenu Québec, reporting a court ruling in a case involving his company, Karrum Amusements.

The tax authorities demanded $3 million in contributions, arguing that “Karam was hiding income,” a former attorney for the company said in court.

Finally, Revenu Québec dropped its claims in exchange for Karrum’s refusal to appeal against the tax authorities over tax overpayments. No one at Prime Properties responded to the numerous interview requests.

tax advantages

The partnership with Prime Properties isn’t Sonder’s only connection to tax havens.

As we revealed two weeks ago, a hotel project in Chinatown is being implemented in partnership with the company of its major shareholders in the Seychelles and the British Virgin Islands.

In addition, Sonder is incorporated in a US state recognized as a tax haven par excellence in the United States.

After being incorporated in Montreal in 2014, the company moved its headquarters to San Francisco in 2017, then was incorporated in Delaware in 2020.

“It is the most business-friendly area. There are no state taxes, which is an important point, but there is a whole host of regulatory benefits,” explains D.T. Cochrane, economist with Canadians for Tax Fairness.

Several American companies have taken up residence there.

profit transfer

According to Mr. Cochran, the fact that a Canadian company is ultimately owned by a Delaware entity prefers to “shift profits into that jurisdiction”.

“This is a problem that is becoming more and more apparent with the digital age, since it is really easier to advertise a digital product [comme un site web] It is he who generates revenue,” he says, citing the example of Uber, which announced its profits in the Netherlands.

According to him, for the Canadian and Quebec tax authorities it is very difficult to organize this type of transfer.

We operate in 10 countries and more than 35 markets around the world. “We pay tax on profits made in each of our markets in accordance with tax laws,” said Sonder spokeswoman Fiona Storey.

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