The world’s transnational corporations seem to know very well the answer to that question as Google, Microsoft, and Apple open more and more offshore subsidiaries. It would be useful for entrepreneurs to know the reasons behind that move to arrive at some conclusion, therefore we invite you to take a look at them in this short post.
Before we get down to the offshore companies, we would like to invite you to our portal where you can read a longer article on the reasons for offshore company formation in the current year. You will benefit from a lot of posts that show offshores behind the scenes and will be able to book a session with our experts who can help you launch your undertaking in any foreign jurisdiction, open an account, or reduce your taxes.
An Offshore Company: Definition
You will find many misconceptions and vague definitions over the Internet, hence the reason why we decided to say what exactly we mean when we offer assistance with offshore company establishment.
An offshore company is a legal entity which is established in a different jurisdiction than the one where the potential business owner lives. All business operations are managed from the founder’s country of residence.
Offshore companies are often associated with tax evasion or tax incentives provided to all business owners. Let’s get clear on these matters as well.
First of all, tax incentives are only provided by the countries that are considered offshore jurisdictions. These concentrate on attracting foreign capital, so they create a favorable environment for company formation and maintenance. Your company is eligible for tax incentives if you derive 100% of your profits outside the country of incorporation.
As for tax evasion, it should be kept in mind that an offshore company is just an instrument that can be applied in a different way. We sometimes hear of scandals with offshore tax evasion in the mass media, misleading us to perceive it as a widespread practice. Nevertheless, there exist thousands of other offshore companies that conduct their activities in an absolutely legal way, but they never make the headlines.
Reasons to Set Up an Offshore Company
Let’s look at the top 10 reasons why far-sighted entrepreneurs opt for offshore jurisdictions in the current economic situation:
- Unlimited access to the world market. Not only large corporations benefit from this opportunity – private investors find their niche, too! You can set up an offshore entity and create your brand as a digital nomad or any professional, register intellectual property, and work with customers across the globe. And if you want to engage in activities that are not allowed in your country of residence (like gambling, forex, or brokerage), you are sure to find an offshore jurisdiction where you can legitimately obtain profit from these areas.
- Excellent banking infrastructure. Offshore banking is quite liberal if you compare it to the European or American financial sphere where the requirements may be much tighter: offshore companies and nationals of some countries are simply denied the services. Offshore banks work with the majority of customers – however, you will still have to pass all the checks imposed by international regulators. We recommend using our pre-approval service (you send the basic documents, and the bank gives preliminary approval to open an account for you. After that, you start collecting a whole package of documents).
- Easy incorporation. We will help you register a company remotely in the majority of offshore jurisdictions! This is done via a local registered agent (and we have one in most offshore countries). If you need, we will also help you find a professional local director to manage your company on-site.
- Affordable maintenance costs. You will need to pay the renewal fee on an annual basis – and save on the rest of your typical business expenses. You will not need any economic substance (like renting an office or hiring local staff), and submission of accounting reports or auditing them is not usually required, either. That is, you can enjoy the basic costs and run the company from the comfort of your home.
- Low capital requirements. You will not be required to invest much in registered capital – and it may be of interest for you to find out that one share (with a nominal value of USD 100) could be enough to set up a company!
- Tax exemption. This is one of the key reasons behind offshore company setup. Offshore destinations usually offer 0% corporate tax – and low or zero tax rates on the whole. You can decide in which jurisdiction your business will file a tax return. If you find it hard to choose which option will be most suitable, follow the above link and get in touch with our specialists for advice.
- No reporting requirements. You will not need to submit your financial reports to the authorities in the offshore jurisdiction. However, you will still have to keep them to fulfill FATF requirements.
- High confidentiality level. This is a priority for many investors who wish to protect their assets and keep their identities private. The privacy standards vary from one foreign jurisdiction to another – however, they are on average higher than in onshore countries. If this parameter is really important to you, get in touch with our expert – we help choose the most suitable jurisdiction for free!
- Enhanced asset protection. If your wealth is considerable, you need to protect it from those people who may want to get to it. This can include protection against creditors or relatives who have no right to your money. There are jurisdictions that help to achieve these goals remarkably well (such as Belize, Nevis, or Cook Islands): your funds will be safe even if your adversary wins a court case in a foreign country. Look for information on our portal or contact us to discover the details.
- Run your business online! In fact, you can set up, operate, and wind up your business without ever visiting the jurisdiction where it is registered – and this is a new level of freedom for some entrepreneurs!
Doesn’t that look impressive? These are the reasons why offshore companies are as popular as ever in 2023 – despite increasing pressure on offshore jurisdictions on the part of international regulators.
Do you have any questions that prevent you from making an informed decision? Take advantage of our portal (which is a real knowledge base) or contact us immediately (click on the above link) to form an offshore company!
