So I don't really know how this would work, but isn't this whole approach predicated on the idea that US corporate tax rates are higher than Portugal corporate tax rates (which on the face of it seems unlikely)? If the opposite is the case, and it's advantageous to the business to build up a US presence, wouldn't it be better to have as much income as possible taxed as US corporate income, and repatriate as little as possible to Portugal?
Yes you want profits to be earned in the lower tax-rate jurisdiction. What you describe is the typical tax strategy: direct profit to the lower-rate country then leave it there.
The economic value is in deferral of tax. A dollar of tax paid next year has a lower present value than a dollar of tax paid today.
You need a lot of deferred tax to make this cost effective. If you are postponing the payment of $100,000 of tax that means you have $100,000 of extra cash in the bank that would have gone to the tax man. What can you do with it? Earn 1% in a bank? Whee! That won't pay for much of Phil's legal fees. :-)
It is a game for big companies.
For most companies, keep it simple is the strategy. Deferral won't generate a big enough economic benefit.
