In 2023, offshores are as popular as ever! Offshore destinations experience pressure from FATF, OECD, and other international organizations. They are blacklisted – but manage to get on the white list shortly as they comply with the requirements set. All of these are temporary difficulties that offshores successfully overcome: they adapt and offer beneficial conditions that will attract businessmen to the country.
Offshores are often mentioned in mass media in connection with scandals. Of course, this makes some people wonder whether offshores are legitimate, and many of our clients ask this question to us. And the answer is yes – they are perfectly legitimate on the condition that you comply with the laws! An offshore company is just as lawful as a company in any other country – until you resort to some dubious schemes or aggressive tax optimization.
Taxation: the Main Attraction of Offshores
It is common knowledge that people go offshore to pay less taxes, and offshores do their best to offer the best conditions possible and at the same time comply with international requirements. Read a full account on offshore company tax and formation on our portal – and book a free session with offshore consultants who will help you form a company, open a bank account, optimize taxes, and much more.
If you are looking for a tax-exempt jurisdiction, you’d better hurry as their number dwindles with every year. However, there are still low-tax destinations that may serve the purpose equally well.
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All offshore jurisdictions may be roughly classified to form 4 types of places where foreigners can establish an offshore company:
- Offshore jurisdictions that offer zero income tax on the condition that the company generates 100% of its profit outside the country of registration
- Low-tax offshore countries with special tax regimes for foreign companies registered in the jurisdiction
- Offshore destinations that adopted a territorial taxation principle, which means that no corporate income tax is paid on profits derived abroad
- Offshores with regular taxation that offer tax incentives to certain categories of businesses and activities
Our specialists will help you choose a jurisdiction that will bring your company the most benefits. For example, we will shortlist the destinations that have a double taxation treaty with your home country as it will help you pay less. Our experts will also inform you of all the implications that an offshore company may have in your home country (some countries will require you to declare that you possess assets abroad, such as an offshore company or a foreign bank account).
Why Set Up an Offshore Company?
People are always engaged in the search for the better, and this is how they discover offshores. Investors and entrepreneurs flock here to take advantage of good conditions for their investments, benefit from straightforward company establishment, and enjoy enhanced asset protection.
Offshore destinations offer citizenship by investment, so many entrepreneurs get second passports for the whole family, set up an offshore company, and… stay at home in most cases. Why is it? Well, what they really need is a Plan B to relocate quickly – meanwhile, the company can be successfully managed online.
Digital nomads are also attracted by offshore countries as they get exactly what they want: a beautiful natural environment to enjoy, well-developed infrastructure, and affordable company set-up and maintenance costs.
Offshore destinations usually offer the following benefits to attract businessmen and investors:
- Low tax rates or even complete tax exemption
- No need to file reporting
- Confidentiality for beneficial owners
- Enhanced asset protection
- Some country-specific terms
Choosing the Right Destination
There are about 100 offshore jurisdictions to choose from, which is an impressive figure.
Offshores are typically associated with island nations. However, the USA, for example, is also used as a tax haven by entrepreneurs from around the world! Non-residents can benefit from laws of separate states, such as Delaware, Nevada, Wyoming, or Florida, to have low tax rates for their companies and enjoy a high degree of confidentiality.
However, your choice should be based on the conditions offered rather than the reputation of a country. On the whole, countries with robust economies may not be the best choice as they are not interested in attracting capital as much as the small offshore states: they have an incoming investment flow without much effort on their part. Tiny islands have only tourism and offshore company registration (and sometimes banking) as the main spheres of activity, so they try hard to create the most attractive conditions they can legally afford. And you can take advantage of their efforts!
Our specialists will help you shortlist the best offers based on your personal situation and needs.
Legal Form
Many entrepreneurs are not sure which legal form to choose – a Limited Liability Company, an International Business Company, or maybe a holding company? Each form has its benefits and serves its purpose, so it is better to ask a specialist to select the right one for your business.
Let’s consider a holding company as an example. It may be good for various purposes:
- Integrating different companies or assets into one structure
- Ensuring ultimate confidentiality for business owners
- This is a very flexible structure that allows one to quickly respond to changes
- There is no need to engage professional directors or any other third persons to run the company
There are situations when the legal form is selected depending on the jurisdiction: for example, the two most popular legal forms for offshore company formation in Belize are LLC and IBC; however, a Belize LLC has more advantages than an IBC, and some of them may be critical to you.
Sometimes the most appropriate form is a partnership as in this case the partners take care of their personal taxes, and the entity itself does not pay any taxes.
By Way of Conclusion
An offshore company is a really good business instrument that will help you achieve your goals and give you the benefits you need. All you need is to set it up correctly and open a bank account for it with a good bank, and this is where we will be glad to help you. Follow the above link and book a session to choose the most suitable jurisdiction today: it’s free!
