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Five
Reasons to Incorporate a
Company Offshore
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by: Rhiannon
Williamson
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When it
comes to the term ‘offshore’ used in conjunction
with
company incorporation, the term ‘offshore’
generally refers
to any jurisdiction other than one in which the company incorporated
will conduct the majority of its activities.
Usually such a jurisdiction has some degree of taxation or reporting
benefit attached that makes it attractive to the company owner, and the
concept of incorporating a company offshore will bring at least one of
the following five benefits to a business owner: -
1) Ease of Operations – depending on the jurisdiction and the
type of business activity to be conducted under the company name to be
incorporated, the operating restrictions, auditing and accounting
requirements and standards to which the business and its employees and
directors must adhere are often far less restrictive offshore than
onshore.
Exceptions to this rule are financial services based companies in many
jurisdictions for example, who have to comply with extra regulatory
legislation for the protection of the company’s clientele.
The advantage of easing operations particularly for a small or start up
company is a reduction in operating costs and in the amount of time a
company’s directors have to dedicate to form filling and
report
filing.
2) Reporting Simplification – this ties in with the first
benefit; in the majority of offshore jurisdictions favoured for company
incorporation the company activity reporting requirements are often far
fewer and simpler as the business activities entered into by the
company are conducted outside of the jurisdiction in which it is
incorporated.
Furthermore personal information relating to the company’s
directors and shareholders need not be declared in all cases or the
extent to which personal information is required is far less intrusive.
3) Taxation Reduction/Negation – the reduction in taxation
liability is one of the main benefits associated with investing
offshore, opening an offshore bank account or incorporating a company
offshore.
If you set up your company in a low or no tax jurisdiction you could
potentially save yourself substantial amounts of money legally. Often
the rules are that if the company incorporated in a particular
jurisdiction never derives an income from the local economy it can
operate tax free.
It’s therefore possible to use an offshore company in an
overall
international business structure and ensure profits are posted in the
offshore jurisdiction and so no tax is liable! Many international
corporations operate in this way and actually negate their tax
liability fully.
4) Asset Protection – by operating a company offshore, i.e.,
outside the jurisdiction in which the company operates, it is sometimes
possible to position assets away from the reach of any potential
litigious action and also to shield business transactions from the
eyes’ of the competition.
5) Personal Privacy Protection – the level to which a
director or
shareholder’s personal information is required, held, visible
or
investigated offshore is likely to be far less invasive and intrusive
than onshore. It is also possible to appoint nominee directors and
secretaries for offshore companies in many jurisdictions thus keeping
the true company owner’s identity shielded.
The information contained in this article cannot constitute advice.
Each individual’s circumstances are unique and whether or not
offshore company incorporation is something that could benefit your
business can only be determined with personal advice.
About the author:
Rhiannon Williamson is a freelance writer whose many articles about the
offshore world have appeared in business and financial publications
around the world. To find out more about Offshore
Company Incoporation visit www.ShelterOffshore.com
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