Offshore company to held trading assets.

CFC is just one part of the puzzle.

Another factor would be that management and control take place in Canada and Colombia by being controlled there (controlled here referring to business decisions being taken, not shareholding), or by having a PE (Permanent Establishment) there which your home offices could be construed as. To make things even more exciting, Estonia considers companies incorporated in Estonia tax resident there. So you risk creating a situation where a company is tax resident in as many as three jurisdictions simultaneously and you'll have to navigate tax treaties, tax credits, and laws of all possible combinations.

One possible outcome is the company must pay tax in Canada on your portion of the profits, in Colombia on your partner's portion of the profits, and nothing in Estonia if you can use the Canadian and Colombian taxes paid as credit to adequately offset your Estonian tax bill (if any). Another is the company must pay full tax in all three jurisdictions and you'll need to work out in what order the tax treaties apply.

Speak with a tax adviser. Or multiple ”” one per jurisdiction.

I'd also consider going back to the drawing board. What about setting up an LP in Canada? No corporate tax to worry about in Canada and you'd both be subject to personal income tax. Your friend in Colombia would have to check with a tax adviser in Colombia how this would work from a Colombian tax perspective, but that can probably be solved.

Appointing a local director in Estonia is fine, and will be fine ”” as long as you don't find yourself in a hostile situation with the Canadian tax authorities. I see similar arrangements mostly Isle of Man, Gibraltar, Cyprus, and Malta, where the UBOs appoint local directors. This establishes the company as tax resident there and the UBOs are left unbothered as long as they pay taxes on their dividends/income.

But this risks falling apart if the tax authority decides to take a closer look at you and your company. In your case, the CRA could in such a situation disregard the Estonian director as nothing but a nominee puppet and claim that you are the effective director. At that point, the company becomes tax resident in Canada and it's time to pony up for Canadian federal and local corporate income tax, social security contributions, and other taxes and fees. Retroactively, if they really want to squeeze you.

This is both about navigating laws and tax treaties, and about understanding the risks you take with different solutions.

Tax treaties are first and foremost meant for truly multinational companies with offices in multiple locations. Not for people who want to dodge local tax and trade crypto while hiding behind a nominee director.

If you partner then assumes directorship and is resident in Estonia, it's a harder case for the CRA in a hypothetical, hostile situation to claim that you are a director. I'd make sure your partner is the only signatory on any bank accounts (you can have view access) and responsible for signing agreements.

In that case, you take away much of the risk associated with having a nominee director. It's not zero if you still are involved in calling the shots, but you can make the risk significantly smaller by ensuring your partner, now resident in Estonia, acts as a true director.