A great special partner in tax havens

Controversial multinational Sonder has partnered with a company whose shareholders are linked to the Bahamas, a tax haven, on two condominium projects in Montreal.

In recent weeks, our Bureau of Investigation revealed that Quebec had granted Sonder $50 million ($30 million in a loan and $20 million in an investment). The company operates 389 Airbnbs in Montreal amid the real estate crisis.

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

One, near Concordia University downtown, has 157 apartments. This is Sonder’s biggest Montreal project of all time.

A second project is planned in Old Montreal. Sonder therefore rents an entire building to Prime in order to offer these apartments for rent on tourist accommodation platforms.


Karsten Rumpf, President of Prime Properties, owner of the building.

Screenshot hulleurorealty.com

Karsten Rumpf, President of Prime Properties, owner of the building.

Of peep shows in the Bahamas

Prime Properties is a major player in the downtown real estate market. Its founder, the businessman Karsten Rumpf, made a fortune with real estate, but also with the operation of arcades and arcades peep shows, to Montreal.

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

There he also owns an opulent residence in one of the finest communities in this Caribbean country.

The Bahamas has long been recognized as one of the top tax havens for Canadians. In 2010, Canada entered into an agreement with Canada to exchange tax information to combat tax evasion.

However, tax laws remain very beneficial for businesses.

Trouble with Revenue Quebec

Euro Immobilien Corporation, which is now the majority shareholder in Prime Properties, has been in the Bahamas since at least 2001.

A few years earlier, in 1996, Karsten Rumpf had a dispute with Revenu Québec, according to a court ruling in a case involving his company Karrum Amusements.

Tax authorities demanded $3 million in contributions on the pretext that “Karrum withheld revenue,” a former company attorney said in court.

Revenu Québec eventually dropped its claims in exchange for Karrum dropping an appeal against the tax authorities for overpaying. Nobody at Prime Properties has responded to our numerous interview requests.

tax benefits

The partnership with Prime Properties is not Sonder’s only connection to tax havens.

As we announced two weeks ago, a hotel project in Chinatown will be carried out in partnership with a company whose major shareholders are based in the Seychelles and the British Virgin Islands.

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

Founded in Montreal in 2014, the company relocated its headquarters to San Francisco in 2017 and incorporated in Delaware in 2020.

“It’s the most business-friendly jurisdiction. There are no state taxes, which is a key point, but there are a number of regulatory benefits,” explains DT Cochrane, economist with Canadians for Tax Fairness.

Several American companies have settled there.

profit transfer

According to Mr. Cochrane, the fact that a Canadian company is ultimately owned by a Delaware entity “encourages the transfer of profits to that jurisdiction.”

“This is an issue that has become even more apparent in the digital age as it is really easier to declare than a digital product [comme un site web] is the one who generates the revenue,” he says, citing the example of Uber, which declares its profits in the Netherlands.

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

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

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