What is an offshore company?
An offshore company is one which conducts business somewhere other than the country in which it started-up and established itself. Offshore companies are the same as any other companies – the only significant difference being the adopted tax structure. This is primarily enabled my many nations across the world wanting to attract specific types of companies by making their corporate laws (tax, regulations etc) more laxed and friendly towards them.
The different types of offshore company set-up?
- International Business Company (IBC) – Offshore companies that gain a statutory tax exemption in the jurisdiction of incorporation
- Low Tax Offshore Company – Offshore companies found in offshore jurisdictions that enjoy a low statutory or effective rate of taxation
- Limited Liability Company (LLC) – A company that allows income and tax liability to pass through to its members
- Limited Liability Parntership (LLP) – A companies’ income and tax liability pass through to its “partners”
- Onshore Company – Companies that are incorporated in jurisdictions that either have a territorial tax regime
Reasons for setting up offshore company?
There are a range of reasons why business owners choose offshore company formations. Some of the reasons why businesses opt to do so:
- Alleviate any unjustifiable tax obligations imposed by home jurisdictions
- Safeguard assets when in complicated legal troubles
- Protect wealth from the potential consequences
Many business owners seek the help of offshore corporate service providers like Meridian Trust to set up and manage offshore companies to gain these benefits. They offer expertise in areas such as company registration, compliance with local laws and regulations, tax optimization, and asset protection strategies. Furthermore, these service providers often offer administrative and operational support, including registered office and agent services, nominee directors or shareholders, and assistance with banking and financial services. They can act as intermediaries between the offshore company and the local authorities, helping to maintain the necessary paperwork and documentation to keep the company in good standing.
Benefits gained from offshore incorporations?
There are a range of benefits and opportunities to be gained from offshore incorporation, some of biggest include:
- A higher level of flexibility and adaptability due to multiple offshore jurisdictions having favourable legal boundaries to encourage and push the growth of the offshore industry and foreign direct investment (FDI)
- There are jurisdictions out there that offer advantages corporate tax rates – this will enable the business to have more capital to re-invest in improving and making various aspects of the business more efficient
- Some jurisdictions also offer hassle free transition possibilities between jurisdictions without any need for any expensive restructuring or excessive legal complications
- Depending on the jurisdiction, companies are often free to engage in virtually any financial, economic, social and business activity
- Having an offshore company can be valuable for holding assets such as intellectual property
- The cost associated with having an offshore company such as physical office and employees can be overcome by having a virtual set-up enabled by the internet and communication services
- Degree of protection as many jurisdictions do require offshore companies to publish financial information or disclose information about directors/ shareholders to any third parties