An offshore company is commonly referred to as a company incorporated for the purpose of operating outside of its country of registration. This means that such a company can be registered and operated outside the national borders of a person or company. This can be particularly worthwhile when it comes to legal, financial or tax advantages. Also, a company can legally relocate abroad to benefit from relaxed regulations, or in other words, to benefit from international laws. This is also the main reason why entrepreneurs choose to set up companies abroad.
Some countries are deliberately making their local business attractive to leverage foreign capital and investment. The well organized and well known offshore destinations worldwide are UK, USA, Belize, Cyprus, Hong Kong, Dominica, Singapore, Seychelles, Panama and St Kitts and Nevis to name a few. Buying a business remotely these days is advantageous and easy to do.
Advantages of offshore companies
Running an offshore company offers certain benefits. For example property protection when a person has large sums of money and can use such an opportunity to protect themselves from lawsuits and divorce settlements. Another benefit is low taxes. Some jurisdictions are called tax havens due to the level of taxation that depends on the jurisdiction: tax exemptions, flat taxes, 0% capital gains tax, etc. The other advantage is related to international expansion when a company encounters many legal and bureaucratic problems in tax havens his home country. Other benefits include: lower operating costs, tax deferral, compounding of tax deferred profits, easy annual reporting, multiple revenue streams, VAT savings on services, and anonymity.
Usually, the benefits received from an offshore company depend on the jurisdiction of the offshore company and to some extent it also depends on the laws of the country of residence of the company owner. Because of this, business people need to be mindful of the offshore jurisdiction they choose and also take into account the local laws of that country.
Procedure for establishing an offshore company
In order to incorporate a company in Hong Kong, Belize, Seychelles or St Kitts and Nevis, there are a few basic steps to follow. First, the cost of the basic services needed to start a business must be covered. This includes a certificate of incorporation, a decision to rent an office and a list of directors (approx. €700). Second, there is an additional fee for data protection; depending on the law firm chosen by the entrepreneur (approx. €400). There are also costs for opening a bank account, the opening of which requires personal presence for reasons of security of the entrepreneur, a fee for the acquisition of a logo, stamp, seal, name tag, as well as fees for apostille, virtual offices, etc An individual must provide their personal credit card information and contact information. Also, a mandate must be signed that specifies who has the right to control the opened bank account, add and remove signers and close it. This depends on the articles of incorporation of the company.
Frequently, the above services also optionally include the formation of international trading companies, the provision of a registered agent, the provision of corporate management, document preservation and corporate administration services, directorship, shareholdings, offshore investment fund formation and licensing assistance of offshore insurance companies and offshore banks, introduction of offshore bank accounts, virtual office services and company search. These services can be offered and provided by professionals such as high net worth individuals, private entrepreneurs, professional advisors, accountants and legal advisers working in local businesses of local jurisdictions in Hong Kong, Belize, Seychelles or St Kitts and Nevis etc.