Offshore Company Formations
Offshore tax havens which preceded the modern form of offshore financial centre were of British origin designed to shelter assets from the economic uncertainties following WW II.
The tax haven's key product was private offshore banking to manage the estates of rich families in a tax-free environment. The motivation for remote islands to establish such centres were economic, to create good local employment opportunities. The role of offshore finance centres in the cross-border financing of corporations has developed into a huge industry. Corporations find offshore centres indispensable for their expansion into new markets at competitive costs. For example, offshore centres already dominate such international activities as shipping, aircraft financing and captive (self) insurance.
Close to one million offshore companies have been incorporated in the past decade, and most of the world's leading corporations have operations in at least one offshore centre. Examples include IBM and Microsoft in Dublin; De Beers in the Isle of Man; and CNN in Cyprus. The world's leading financial institutions have all increased their offshore financial services, including Lloyds Bank, Barclays Bank ,Chase Manhattan, Citibank, Goldman Sachs, Fidelity Funds, Rothschild’s, Royal Bank of Canada, Deutsche Morgan Grenfell, Credit Suisse, and Bank of America.
Offshore activities still include international tax planning, using legal mechanisms to reduce, eliminate or defer taxes on income, wealth, profits and inheritance, or to accumulate tax-free income offshore pending recognition in a taxable jurisdiction. They are now on the cutting edge of new corporate, investment, trust, insurance, partnership and banking legislation and are amongst the first to offer unique structures such as limited partnerships, asset protection trusts, purpose trusts and limited duration companies, while continuing to provide the only effective shield against the dangers of confiscation, expropriation, tort law abuse and sanctions.
There are great variations between services rendered in different offshore jurisdictions, for example, the degree of specialisation that has occurred places Bermuda in a pre-eminent insurance and reinsurance position, Luxembourg, Dublin and Guernsey at the forefront of offshore investment funds, the British Virgin Islands in the formation of International Business Companies, Jersey in offshore trusts, the Caymans and Bahamas in offshore banking, the Caymans in medical liability insurance, Barbados in Foreign Sales Corporations, and so on.
Service providers such as international tax planners, trust lawyers, accounting firms, asset management companies, estate planners, bankers and security dealers are establishing offices offshore, so why not you?
OFFSHORE COMPANY FORMATIONS
Many people are familiar with using corporate entities for business or holding personal assets. From a legal perspective an offshore company is very similar to an onshore company. So why go offshore?
Offshore companies may be used for various purposes and may secure a number of advantages not available onshore. Persons wishing to utilize these benefits need to ensure they comply with applicable onshore laws and should obtain professional tax advice if necessary. The list below sets out examples of uses of an offshore company. In practice the modern day use of the corporate entity is endless.
Trading Companies
An importing or exporting company might establish itself in an offshore jurisdiction. The offshore company would take orders directly from the customer. Goods would be delivered directly to that customer from the manufacturer or place of purchase. The profits arising out of the difference between purchase price for the offshore company and sale price to the purchaser would be accumulated in a tax free or low tax area. With such trading companies, it is important to choose a jurisdiction that has good communication infrastructure as documentation may be critical to the arrangement. Certainly domestic tax legislation is important and appropriate advice should be sought.
Investment Companies
Investment companies set up in offshore jurisdictions may invest throughout the world without capital gains, dividend or other income being subject to tax. As above, domestic tax legislation in the shareholder's country of residence or domicile is important and appropriate advice should be sought.
Flexibility
One of the main advantages of an offshore jurisdiction is flexibility and limited regulatory regimes. As a result, transactions that may require regulatory approvals onshore may be achieved relatively easily offshore.
Finance Companies
Use may be made of an offshore finance company that would fund the operation of subsidiaries in various countries. The subsidiaries would obtain the benefit of tax deductions on interest paid. If the finance company is situated in an offshore area where there are no income or corporation taxes and no requirement that dividends be paid, then the profits can be accumulated in a tax-free climate. These funds can be used to further finance the requirements of subsidiaries or reinvested, as business convenience suggests.
Probate and Privacy
A high net worth individual with properties or other assets in a number of countries may wish to hold these assets through a personal holding company. This approach could possibly save legal fees and avoids publicity. As well it may be more efficient and cost effective than onshore probate procedures.
Property Owning Companies
There are often great advantages in using an offshore property holding company for the purpose of holding an overseas property. Advantages of offshore property ownership include avoidance of inheritance tax, avoidance of capital gains tax, and ease of sale that can be achieved by transferring the shares in the company rather than transferring the property owned by the company and reduction of property purchase costs to the onward purchasers.
Professional Services
Individuals who receive fees in respect of their professional services in capacities such as designers, consultants, authors or entertainers, may assign or contract with an offshore company the right to receive those fees. The offshore employment company may not have to pay tax on its income that can be reinvested in a tax-free climate to generate further income from the offshore company.
Patent, Copyright and Royalty Companies
An offshore company can purchase or be assigned the right to use a copyright, patent, trademark or know-how by its original holders with a power to sub-license. Upon acquisition of intellectual property rights the offshore company can then enter into agreements with licensees around the world who would be able to exploit the intellectual property right in various countries. In some cases it may be preferable to acquire, for example, a patent at the patent pending stage before it becomes very valuable so that the capital payment for the acquisition of the patent can be set at a lower amount.
Insurance Companies
There are a number of offshore jurisdictions that encourage the establishment of insurance companies. In a number of offshore areas it is possible to incorporate insurance companies that pay no tax in respect of their premium or investment income. Similarly, captive insurance companies have been created by many multinational companies to insure and re-insure risks of subsidiaries and affiliated companies. Captive insurance companies are particularly suitable for industries that might be insurable only at prohibitive premiums or risks that would otherwise be uninsurable.
We offer a full-featured IBC package plus a bank account arrangement
What is Included
Offshore Company Incorporation – you choose the name
Registered Office
Registered Agent
All first year fees
Certificate of Incorporation
Articles of Incorporation
Memorandum of Association
Resolution to Appoint Managers signed by Registry Subscriber
Resolution for issue of shares
Resolution to obtain a corporate seal
Notarization of documents (necessary for banking)
Bank account
Visa Card
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