WHAT ARE OFFSHORE CORPORATIONS?
Most business people have heard about offshore companies. However, very few are aware of what these companies are used for and how they differ from other more common corporate entities. In this article, we will introduce the key concepts related to offshore corporations and outline some of their unique benefits.
First and foremost, it is essential to define the term Offshore. Offshore relates to managing, registering, conducting, or operating in a foreign country, often with financial, legal and tax benefits. Offshore Company is then a company incorporated for the purpose of operating outside the country of its registration and/or the place of residence of its directors, shareholders and beneficial owners. Again, this is typically pursued to realize various financial, legal or tax benefits.
OFFSHORE COMPANY USES:
As most other companies, an offshore company may enter into contracts, open bank accounts, purchase and sell various products and services, own property. A typical offshore entity, also known as an international business company (or an offshore IBC) does not have tax liabilities in its home jurisdiction (however it may have to pay taxes in the jurisdictions the actual business activities are being carried on). At the same time, it must also operate outside of the country of incorporation. Typicallly offshore corporations are effectively a corporation with a limited liability. This liability is limited only by company’s shares. Shares are owned by one or more shareholders while the company is managed by director(s).
Offshore incorporation can be carried out in a number of jurisdictions, including Anguilla, BVI, Belize, Seychelles, Panama and Nevis. The main decision criteria are price, reputation of the jurisdiction and time to incorporate. For instance, an offshore BVI company is the most popular among offshore entities, highly regarded by incorporators and business owners alike. An alternative would be a Seychelles company, which is the most affordable among popular offshore jurisdictions. Belize IBC is a prudent balance between price, reputation and proximity to fairly developed banking system of Belize.
An alternative to incorporating in a classical offshore jurisdiction would be to register one’s company in an onshore country with favorable legal and tax benefits. These jurisdictions include Hong Kong, Canada, UK, Gibraltar, some USA states, most prominent of which is Delaware. Registration in these jurisdictions is reputable and may carry some of the benefits associated with offshore companies.
With our global network of companies, purposefully located in the most important financial centers available in today’s markets, we can establish, organize and manage corporations in an unparalleled choice of jurisdictions. For those with multi-jurisdictional structures, our International Subsidiary Management Team is able to provide a unique one-point-of-contact umbrella service for corporate secretarial actions, which means that multinational clients can more easily coordinate their international holdings to ensure compliance with all local requirements, while being assured of the highest level of service, regardless of the jurisdiction. Whether it is for fiscal structuring, or other international structuring requirements, our global network of offices and team of experienced professionals is able to provide full corporate domiciliary and management services, fiduciary management and accounting and legal support services, no matter which jurisdiction is chosen and always at the same high level of quality our clients have come to expect.