Apple, Hewlett-Packard, Microsoft, and many other multinationals have multiple offshore subsidiaries. Why is it? If tax evasion is the first answer that comes to your mind, you should know that today’s offshore jurisdictions comply with international laws and are no longer used for aggressive tax optimization. Nevertheless, offshores retain their attractiveness for business, and in this post, we will look at the top reasons why it is so.
We invite you to visit our portal where you can read a more detailed article on why to open an offshore company today and find many other useful tips on offshore companies, bank accounts, taxation, and so on. You can also take advantage of the services provided by our specialists. Some of them are free: for example, we will help you choose the most suitable jurisdiction for your company and bank for your financial operations at no fee. Some are paid: we help entrepreneurs establish companies and open bank accounts in other countries without much hassle.
Offshore Company: Fundamentals
When we are talking about an offshore company, it’s better to give it a definition to make sure we are talking about the same thing. You will find a lot of vague definitions and misconceptions on the Internet, and it’s time to get clear on that.
When you establish an offshore company, you simply register a legal entity outside the country of your residence. And you don’t always do so on the islands: it can be any jurisdiction. Therefore, it can be referred to as a foreign company, a company abroad, or an overseas company.
The second common mistake is the idea that all offshore companies are entitled to benefits typically associated with offshores. However, the truth is that there are offshore jurisdictions that offer special treatment and conditions to foreign companies to attract more capital to their economies. And if your offshore company is registered in such a jurisdiction, it has the right to all the advantages offered – otherwise, it may have no benefits at all.
There are also typical requirements that give your business the right to use the privileges of the offshore jurisdiction: you should not use local companies or people to generate profit. 100% of your income must be derived abroad!
Reasons Why Entrepreneurs Go Offshore
- Unlimited access to the world market. Even if your company is not an international corporation, you will benefit a lot from this feature. IT specialists, freelancers, and digital nomads of all kinds can start companies to promote their brands, register intellectual property, or attract more customers. Those who wish to engage in business activities prohibited in their country of residence (like forex or gambling) are free to do so via an offshore company.
- Excellent financial infrastructure. Offshore jurisdictions often live at the expense of banking and company registration services, so their banks are usually much more liberal than financial institutions in Europe or America: they will work with offshore companies incorporated in virtually any jurisdiction and adopt high-risk businesses. It should be borne in mind, however, that offshore banks still have to comply with international laws, so you cannot expect them to open accounts in 100% of cases. With that in mind, we offer a pre-approval service: we will send an application to the bank that describes your situation in detail, and the bank will tell you its decision. If it is positive, you can start collecting the remaining documents to get a fully-operational account.
- Hassle-free incorporation. You don’t need to leave your home in most cases to set up an offshore company: the procedure is completed online via a registered agent or by proxy. Contact us to use the services of reliable registered agents as we have a network of licensed specialists in all offshore jurisdictions.
- Low company maintenance costs. The only payment you make in most cases is the annual company renewal fee (however, the rules are strict here: you have to do it before the term of company existence expires!). You will not need to rent an office in the jurisdiction of incorporation or hire local employees or auditors to audit your financial reports. Administrative costs are usually quite affordable, so all you will need to do is to successfully run your business from home.
- Low investments. The initial capital you will need for offshore company formation is usually set to a minimum (like a hundred dollars) to create the most beneficial conditions for those that launch their business on a tight budget.
- Save on taxes. Though aggressive tax optimization schemes are a thing of the past, the tax regimes offered by most offshore jurisdictions are still very attractive: no corporate tax (or a low rate) or even complete tax exemption. However, there are many factors to be taken into account when we think of the best taxation scheme, so we strongly recommend consulting a specialist for advice (follow the above link to do so).
- No reporting required. Offshore jurisdictions will not require you to submit any reporting. However, you will still need to keep it in many cases to comply with international requirements.
- High privacy standards. If this factor is of great importance to you, our specialists will recommend the best jurisdictions to suit your purposes. And while you cannot have absolute confidentiality in the present-day world, you can achieve something that is very similar to that.
- Strong asset protection. There are offshore jurisdictions that serve as real strongholds for assets, and no creditors or relatives will get to your funds unless you permit them to do so. This is achieved in an absolutely legal way: you simply enjoy the features of the local legal framework that protect you. Contact us to take advantage of the best strongholds!
As you see, offshore companies are really promising business instruments that come with a lot of benefits – no wonder multinational companies make ample use of them!
If you are interested in choosing the best jurisdiction for your business and establishing a legal entity with minimum effort involved, please follow the above link to explore the opportunities offered by our portal. Our qualified experts are just a click away from you!