Offshore companies are entities that people create in order to legally take advantage of the global tax market. British Virgin Islands-BVI, United Arab Emirates-UAE , Belize, Thailand, Vietnam, Hong Kong, USA, Australia, Singapore…, for example, are common traditional offshore jurisdictions. This article is based on a the five key benefits of forming and owning an “offshore company”.
An offshore company is a corporation that set up in a jurisdiction other than the jurisdiction that constitutes its main place of operations or where the company’s principal investors reside. You definitely see that there are dozens of advantages to setting up an international organisation and running your business using an offshore bank account instead of, or in association with a local account. For example, establishing an offshore company and/or relocating your corporate structure to an overseas have advantage of international tax cutting and grow your investments overseas.
One of the main offshore company benefits is that they are generally “tax neutral” meaning they are often tax exempt in the country of incorporation or they pay a low or nil effective rate of taxation when used as a holding company receiving dividend income for instance. However, corporate taxation matters can become very complicated and it is very important to be guided by an experienced professional. As such, it is always best to get the advice of a qualified tax and legal professional whenever considering whether or not to incorporate offshore. That way you can get accurate guidance on how to use an offshore company to be more tax efficient.
Another of the main offshore company advantages lies in the fact that internal information of the owners and sometimes even the directors are not a matter of public record. Most offshore financial jurisdictions will not reveal any of this information to any third party unless criminal or terrorist activities are suspected. This can especially be beneficial in situations where a person or an organisation would like to apply for a patent or acquire a piece of property, without having the application or transaction easily traced back to them by their competitors or other third parties. Forming an offshore company in BVI, UAE, Hong Kong,… can have advantages of enhancing privacy.
Many company administrators in offshore jurisdictions specialise in providing company secretarial and administration services and due to economies of scale and automated systems are able to provide these services at a very reasonable fee. The need for accounting, other staff or a physical office can also be overcome with cost-effective virtual office services – saving time and money. This allows the client to focus more time on the core revenue generating activities associated with the company.
Lower set up and maintenance costs
Unlike onshore jurisdictions, the majority of offshore companies registered in tax havens are not required to file annual reports or financial accounts with the Registrar of Companies. In order to keep an offshore company in good status and compliant with its local government, the owner just only have to maintain a local registered agent (who will be accepting service of process and receiving official correspondence from the government on the company’s behalf), and paying an annual business license application fee to the government where the entity was formed. This is usually simple and inexpensive.
Lower capital requirement
Offshore companies typically provide flexibility in terms of the structuring of the capital of the company. The requirement is often minimal paid up capital or no minimal paid up capital at all. Setting up an offshore company does not have to be complicated and can provide many benefits for individuals or companies involved in business across international borders.
How ACE Global Accountants can help you? We understand that time is essential for you in setting up an offshore company, hence when you turn to ACE Global Accountants, we can ensure you for a hassle-free incorporation process at the most economical price. Contact us today for more information!