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Five Reasons to
Incorporate a Company Offshore |
by:
Rhiannon
Williamson |
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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