Five Reasons to Incorporate a Company Offshore Account

Five Reasons to Incorporate a Company Offshore
Account

by: ED SAUNDERS

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.