If you’re considering starting a company this offshore company formation guide will be of use to you. We will discuss the reasons why people incorporate offshore and how to go about finding the jurisdiction that’s right for you…
There are about five main reasons why anyone would consider establishing a company offshore and in fact, greater numbers of individuals and corporations are taking steps to incorporate overseas away from either their nation of domicile and/or residence, or away from the nation in which their main business transactions are conducted.
The five main reasons for offshore company incorporation and formation are: –
1)To save tax – an offshore company can form part of an overall taxation reduction strategy for certain individuals or entities. Combined with an offshore bank account or trust for example, an offshore company can save an individual tax…or when such an offshore corporation is set up in a low or no tax nation, it can be used to enable a business to realsie profits in as tax efficient way as possible.
2)To have greater ease of operation – many offshore centres make it very easy for companies incorporated locally to trade if they do not transact locally and they are not involved in banking or financial services for example. The latter type of company usually require specific licenses and greater regulation. But for straightforward business types, an offshore company can be far easier to manage than an onshore one.
3)For offshore asset protection – again, where an offshore company is established as part of an overall strategy for wealth preservation with the likes of a trust for example, it is the perfect entity for enabling individuals to achieve asset protection offshore. Assets can be owned by the company rather than directly by an individual, and the company can be placed in trust for example.
4)To achieve a higher level of anonymity – a number of overseas centres offer the option of having nominee directors for the establishment of a company and others also manage to keep the names of directors and shareholders off public record. This means that those who transact through such a company can keep their affairs private.
5)To benefit from favourable local legislation relating to reporting – the amount of company information and accounting data that needs to be submitted and held on file is far reduced in the majority of offshore centres which goes hand in hand with point 2 above towards making an offshore company that much easier to manage and run day to day.
Naturally the features, benefits and reasons why people establish a company offshore differ from individual to individual and you need to determine with the aid of a tax adviser whether incorporating overseas makes sense for you.
If you do determine that an international business company (IBC) or offshore company would benefit you, you have to determine the jurisdiction most favourable for you. To do so please keep in mind at least the following considerations: –
a) level of local protection and legislation
b) set up and on going costs
c) local infrastructure upon which you may have to rely
d) taxation and reporting requirements
And finally, in our opinion expert advice is required when it comes to selecting the most favourable jurisdiction and the best method of approach to ensure you establish a company correctly and most beneficially to you and your personal situation. Therefore, take advice and proceed carefully.