Offshore
Companies
An offshore company is considered a company incorporated in a jurisdiction other of its primary operations. General characteristics for a company to be qualified as offshore are the following:
- Must be incorporated outside the jurisdiction in question, for instance if it is incorporated in Bahamas, it could base its primary operations in Panama.
- It cannot trade within the jurisdiction in question, so the company in Bahamas cannot carry out any business within that territory.
- Must pay nominal tax expenses imposed by the jurisdiction in question, the company in the Bahamas has to pay the mandatory taxes there.
Many consider incorporating an offshore company much more beneficial than a company that is incorporated and operating within the same jurisdiction.
Must offshore companies are incorporated to take advantage of these following features:
Taxation - Tax planning purposes: Companies that do not trade within the jurisdiction they were created have to pay a minimum of taxes, like annual and license fees.
Confidentiality: This advantage is very important, due to security purposes. Doing transactions in the name of a company instead of an individual, will keep the identity of the principal out of any documentation and unrevealed.
Fees: some jurisdiction have lower incorporation and annual fees than others.
Cost operation: in terms of expenses, in general it could be cheaper to incorporate a company offshore, i.e. an offshore financial center, than renting an office, hiring staff, etc.
Legal protection:
In general it is easier for an offshore company to protect itself, from
lawsuits, disclosure of assets, etc. Since the laws that prevail over it are
the ones of its own jurisdiction, not the place where the company carries
out business.
Legitimate uses of offshore companies:
* International trading
* Asset protection
* Captive insurance
* Yacht registration
* Tax avoidance
* Protection of intellectual property
* Succession planning
* Confidentiality (non-criminal)
The jurisdiction used for the incorporation of an Offshore Company are called an Offshore Financial Center (OFC).
These are jurisdictions that because of the low tax rates and flexible regulations are specialized in offering commercial and corporate infrastructure. Which makes the use of such jurisdiction easier for the incorporation of offshore companies and investments from abroad.
Some may confuse the terms Offshore Financial Center and Tax Havens. However, it is important to point out the although they may seem like the same thing, they are not. A Tax Haven is merely a territory in which the taxes very low, or no tax at all; while an OFC is a jurisdiction that provides facilities other than low tax, for an offshore company to be incorporated. Which makes it highly competitive, compared to other territories.
Another advantage for incorporating an offshore company in an OFC is the banking secrecy and anonymity. Which for many beneficial owners is very appealing, specially if they want to keep their identity unrevealed.
Offshore companies in different jurisdiction:
-Liechenstein Offshore Companies.
Click here for prices of setting up offshore companies.
If you have problems selecting
jurisdiction for incorporation, please
contact us.
