Offshore FAQs:
- What term "offshore" means?
A legal entity that has it's business set in country with advantages of low taxation and stable government currency control. These countries are often called as "Tax Haven".
- What is LLC?
The LLC is not a partnership or a corporation. It is a distinct business entity that offers an alternative to partnerships and corporations by combining the corporate advantages of limited liability with the partnership advantage of pass-through taxation.
- What is IBC?
International Business Company(IBC) - is one of the of the terms in the offshore industry. Basically it's main features are:
- Easy and not complicated procedure of registration
- Minimum requirements for company report
- Low or zero taxation
- High level of confidentiality
- What is the definition of "Tax Haven"?
A Working definition of tax haven is a jurisdiction that has no or at best, low, direct and indirect tax rates compared with the other jurisdictions. To complicate matters furthe, some high tax countries may offer similar advantages to classical tax havens for certain types of business. Presently there are more than 40 locations worldwide offering great benefits for offshore companies as tax havens.
- What are the main advantages of offshore company?
- Reduce of taxes from payments under dividends and interests.
- Protection against lawsuit judgments.
- Avoidance of double taxation
- Informational confidentiality of your business activities.
- Low operation costs
- Unlimited Market Opportunities
- Flexibility and easy way of company establishment
- Who uses offshore?
All those who are interested in minimization of costs are often express interest to use of the offshore entities:
- High net wealth individuals: International Investors, Entrepreneurs, Property Owners
- TNCs: Financial institutions and Financial institutions
- The Offshore Sovereign States
- What are the company registration documents?
In the majority of the countries the company's registration documents include a Memorandum and an Operating Agreement.
Usually, the Memorandum consists of the following sections:
- a name of the company
- an address of its registration office
- the purposes and powers of the company
- position about restriction of the responsibility of shareholders
- the size of the share capital, number of shares and their face- value
- the subscribers meeting in regards of the company establishment
The Operating Agreement, as a rule consists of the following items:
- shares issue requirements
- the measures applied in case of shares non-payments
- transfer of shares
- increase or reduction of the capital
- distribution and reception of loans
- meetings of shareholders
- director's rights and duties
- dividends
- accounting and auditing
- special regulations about the company's termination
- What is âgoing offshoreâ?
It is the utilisation of out of country corporations, trusts, partnerships, banks, funds, and management firms, to legally safeguard assets, minimize taxes, plan for the future and take advantage of global investment opportunities.
- Isnât it illegal to move assets offshore or have âoffshore bank accountsâ?
It is legal to have accounts, funds, reserves, liabilities, assets etc. almost anywhere in the world. When you do not declare assets or profits, that should be declared according to your domestic tax code, (IRS, Revenue Canada, Inland Revenue etc), you are subject to certain penalties and fines or more. The key elements are if the assets and profits are âreportable itemsâ in that current year. Setting up offshore is not illegal; however, withholding information about your offshore investments is illegal in some countries. The question of legality often arises from propaganda supported by high-tax jurisdictions to keep their residents (and their tax money) at home. An offshore jurisdiction should be perceived as a foreign country â but with certain advantages. These can take the form of banking secrecy laws, advantages in forming companies for international trade or investment operations, no interest tax, no inheritance taxes, no capital gains tax, no individual tax, and many others. Depending on your personal needs or preferences, there will normally be one or more offshore jurisdictions offering the services you are looking for. We would suggest that you contact us to discuss your personal requirements in more detail.
- Isnât âgoing offshoreâ only for the rich?
This might have been so a long time ago. However, in this modern age with the high quality of services available, offshore is now a relatively simple and affordable procedure for almost anyone. Once having moved all or part of your business offshore, the savings made by the low-tax or tax-free status opens up a whole new world of investment and business opportunities.
- Can I move my existing business offshore?
Some companies move parts of their business offshore almost immediately as separate subsidiaries and profit centres. However, you will need to look at your business with a view to re-organise your activities and maybe look for new business opportunities on a cross-border basis into other countries. The possibilities are quite extensive, and we are able to assist you when it comes to applying offshore advantages to your existing company operations.
- Are there any other advantages besides tax?
There are many advantages including: Anonymity, asset protection, foreign property holding through a company in a third country, limiting of liability in business transactions, unrestricted flow of capital, transfer of assets etc.
- What term "Offshore Bank" means?
This is possibly the oldest form of banking where certain services are offered to wealthy individuals. Offshore private banking is attractive to business individuals both for tax reasons and secrecy.
- What is the real Bank Secrecy?
Bank secrecy is a central attraction for offshore business. In some jurisdictions it is a criminal offence for bankers to divulge any information about a client's account. Bank is an industry based upon the notion of "confidence", whether this is placed in the individual institution on in the banking system as a whole.
- Is my money safe offshore?
Many financial experts believe that offshore investing when done through reputable companies is actually safer than investing onshore. Higher reserves and greater liquidity ratios are usually found in established offshore financial institutions as compared to their onshore counterparts. In secure offshore havens these problems are nonexistent because of stricter banking laws, lower costs of operation, lower taxation, conservative investment policies, lack of stockholder pressure to maximise profits (which results in higher risk taking on loans and investments), and comparatively lower executive salaries and bonuses in offshore havens. Additionally, further safety and protection of investments and assets against lawsuits and creditors can be achieved offshore.
- Can tax authorities or any other "third partyâ get information about the beneficial owners of the offshore company?
To preserve the confidentiality of the beneficial owners we recommend using the nominee services of director and shareholder, which we provide. You can also consider using bearer shares where they are available. Only your registered agent will have your personal details. Government Authorities can request the information from the agent only with a courts' order, but they would have to present very strong evidence of your illegal activities in court for such order to be granted.
- What is a nominee service for an offshore IBC?
A nominee is a person who is not a real owner or director of the company, but who is appointed by the real owner to act in this capacity. Nominees are widely used by the owners of offshore companies to preserve their identity. By using the power of attorney, the nominee director transfers all the powers to manage the business to a person whom the real owner can trust.
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