In a cross-border world, the rise of the offshore company is hard to miss. Business is becoming more and more globalised and as such, business owners and people are no longer restricted to their country of origin. In this section, we’ll take a look at offshore company incorporation, what it is, how it can benefit you, and how to go about it. Bringing you the information you need, based on our extensive work in this field will empower you to make informed decisions that will benefit you, and your business objectives.
What is an Offshore Company?
Most of us have heard the term “offshore company” but do you really know what it means? Simply put, an offshore company is a company that is incorporated in an offshore jurisdiction. An offshore jurisdiction is one that isn’t the jurisdiction you’re resident in or hold a passport of.
Favourable conditions including structural flexibility, some level of privacy and tax-efficiency are the most common reasons for international companies to incorporate in these jurisdictions.
One key difference between an offshore company and a regular company is that the offshore company doesn’t usually conduct business activities in the country it is based in. Instead, the company conducts activities from that country, internationally.
For example, you have an online gambling business that operates in Europe and parts of Asia. Setting up your international company in Curacao but maintaining your operations elsewhere, makes it an offshore enterprise.
Some people have the impression that an offshore company may not be legal but this isn’t the case. It’s a common misconception that offshore companies are used for criminals and tax dodgers looking to hide their wealth. While there are nefarious actors in every industry, offshore companies are predominantly used for legitimate activities.
Offshore company incorporation doesn’t exclude you from the law, instead, you are bound by the laws of that jurisdiction. Matters like compliance, accounting, filing, and licensing must all be taken seriously, regardless of which offshore jurisdiction you opt for.
Top Jurisdictions for Offshore Company Incorporation
The following are the top jurisdictions for offshore company incorporation. Click on any of the locations below to learn:
- Company formation costs
- Time frames to incorporate
- Country language and currency
- Background and a general outline
- Political structure and legal system
- Name and trading restrictions
- Taxation & double taxation treaties
- Accounting and financial statements
- Disclosure of Beneficial Owners
- Capitalization requirements
- Exchange control
Selecting the Best Jurisdiction for my Offshore Company
When deciding on a jurisdiction for offshore company formation, it’s important to consider a number of different criteria.
Political and legal structure:
Firstly, you should look at the political and legal structure of the country, to make sure it is suitable for your needs. If a country is unstable or has an unnecessarily complex or unreliable legal system, it may not be the wisest choice for you. You should also be aware of what the economy is like, which industries are thriving, and what international organisations and unions that particular jurisdiction is a member of.
Limitations to your company can include name restrictions and trading restrictions. Most jurisdictions have rules in place to make sure your company name is suitable, reputable, and cannot be construed as being a state or affiliated entity. Each offshore jurisdiction also has rules in place regarding what activity you can carry out. You may not be able to trade with certain countries or conduct certain activities. Be sure you know, before you start the incorporation process.
As discussed above, taxation is a very important consideration when incorporating an offshore company. How much tax you will pay on your revenue and where will ultimately be a part of your success. Likewise, being aware of any tax agreements or double taxation treaties will help you avoid being taxed twice on your income.
You should also be aware of what your obligations are in each offshore jurisdiction. You may have to submit financial statements and get audited? Do you need to disclose the beneficial owner? And how much capital do you have to put upfront? These, along with any exchange controls all need to be factored into your decision before you take the plunge.
You need to be sure the offshore jurisdiction is suitable for your needs. Knowing what you can and can’t do with an offshore company is important so you don’t waste time and money on forming an offshore company in a jurisdiction that isn’t compatible.
At Fast Offshore, we understand that every client is different and that their needs may be incredibly nuanced. Each jurisdiction has a range of pros and cons and other factors that need to be considered before a decision is made. Therefore, we invite you to Contact Us to discuss what you want and what you need. Then, using our 22+ years of experience, allow us to point you in the right direction for your offshore company formation needs.
Offshore Company Benefits
Those that decide to incorporate an offshore company are able to avail themselves of a significant number of benefits. These range from quick set up time, flexible corporate structures, tax incentives and varying levels of privacy. Here are some of the key benefits you can expect to find in the top offshore jurisdictions:
There are many reasons why you may be looking for a high level of asset protection. If you are native to, or live in a socially, economically, or politically volatile nation, protecting your wealth is incredibly important. By placing your assets in an offshore company structure, they are beyond the reach of these factors and cannot be seized. This is important in situations and scenarios where instability within a country threatens HNWI or business people who conduct business internationally.
Similarly, asset protection is an important consideration when it comes to marital issues. Placing assets in an offshore corporate structure can prevent family wealth, heirlooms, or property being divided up by the courts. Furthermore, you can preserve your wealth from excessive taxation such as inheritance tax which can often amount to more than 50% of the value.
Offshore company formation can also protect you from lawsuits or other legal issues. By placing the bulk of your wealth and assets into an offshore company structure, you can prevent them from being used as collateral in legal action. Another popular use for international companies is the protection of intellectual property. By assigning IP to an offshore company, it makes it harder for someone to claim the trademark, copyright, or patent of your product or idea.
International company incorporation comes with many fiscal benefits for the owner. But it is important to make a distinction between tax avoidance, which is illegal, and optimised tax planning, which is not. Having an offshore company is not about hiding assets or avoiding paying what you are due, it’s about using international laws to your benefit.
Tax optimization is a popular way of limiting company expenditure and creating additional profit. If a company benefits from a lower tax rate, the more funds the owner has to reinvest into expanding the business. Finding a jurisdiction which provides optimum tax rates is a smart business strategy for international businesses.
Tax efficiency is where a company attempts to minimize the amount of tax liability they incur. A decision is ‘tax-efficient’ when the outcome is lower than a similar decision in another less tax-efficient jurisdiction. Offshore companies are a great way of achieving both tax optimization and tax efficiency in a legal and regulated way.
Flexible Business Laws
Incorporating an offshore company is often more simple than many think. Offshore jurisdictions usually offer quick incorporation times, favourable costs, and straightforward ongoing maintenance requirements. In addition to this, many jurisdictions offer flexible regulations when it comes to accounting and public filings.
Additionally, offshore jurisdictions often have low capital requirements. This means that little capital is required to be paid upfront upon the incorporation of the company. This is a benefit to the owner as it means less expenditure at the set-up stage.
Different jurisdictions also have varying requirements in terms of confidentiality. Many onshore jurisdictions require beneficial owners to be registered with the authorities and the information made publicly available. While some jurisdictions do require registration of identities, it is rarely accessible to the public or anyone else.
If you want to operate in a licensed market such as iGaming, blockchain and cryptocurrency, or forex, offshore jurisdictions are attractive options. They give you the opportunity to pick a licensing regime that suits your needs, budget, and timescale. Incorporating an international company in one of these jurisdictions allows you to operate with a license while enjoying other benefits.
If your business is ready to take the next step, offshore company incorporation could be for you. Many companies who want to expand internationally opt for offshore company formation. This allows them to operate and work within that area while reducing costs.
Incorporating in an offshore jurisdiction also gives the business access to new markets, clients, partners, and other opportunities. This is pertinent in cases where companies incorporated in an individuals home country are subject to limitations for trade worldwide or with certain countries.
Steps to Opening an Offshore Company
There are a number of steps you need to take to incorporate an international company, but thankfully Fast Offshore can take care of most of them for you. Here is what you need to do:
Select your preferred location
You may already have some jurisdictions in mind, in which case- great! Just contact us and let us guide you through the entire process. Reach to us if you are considering multiple options and we´ll tell you which is the optimum jurisdiction for you.
Consider your needs
You need to be completely sure of what the objective of your company will be. Are you setting up a crypto exchange, online gambling company, or forex brokerage? Will the company just hold assets? Or is it for another purpose? Where is your target market located? Be totally clear and ready to communicate this in full as it will have a big impact on how we tailor our service to you.
Engage Fast Offshore
At this stage, we will take an in-depth look at you and your business needs. From this and combining it with our experience, we will advise you on the best jurisdiction to suit your needs. We will never sell you something that won’t work for you and we always take the time to get to know our clients properly before giving advice.
Once jurisdiction has been decided upon, Fast Offshore will tell you what we need from you. This will include due diligence and various identity documents, information on the business activity, and a range of other documents. Once we have them, we will get the ball rolling.
Sit back and relax
As soon as you’ve handed over the required documents to us, there really is little else to do. We will handle matters from here on out so you can take care of your other business needs.
Have you already selected your preferred location and are looking for a free consultation? Contact us now!
Requirements to Incorporate an Offshore Company
Each jurisdiction that offers offshore company formation has different requirements for doing so. In other words, there is no one-size-fits-all answer to this question. The requirements will depend on the type of business you will be conducting and where you will be conducting it once the company is incorporated. There are however some requirements that are the same across the board.
KYC for Directors, Shareholders and UBOs
All jurisdictions and any reputable corporate service provider will require at least basic KYC on these individuals. This includes name, passport, proof of address, and sometimes professional references from a bank, lawyer, or accountant. These are required to verify your identity. Note, not all jurisdictions require this to be submitted to the authorities, but at the very least, the service provider needs to know who they are dealing with.
Specific nature of the business
Every jurisdiction requires some information about the business the offshore company intends to conduct. This is often included in the Memorandum and Articles of Association or similar. Different jurisdictions require different amounts of detail, but the authorities need to ascertain whether the activity is legal, or needs to be regulated.
Geographical location of customers
If your offshore company will have customers, you need to tell the authorities who they are. In particular, they need to know where they are based. This is due to restrictions and limitations in place on conducting business with residents or citizens of other countries.
How Much Does it Cost to Open an Offshore Company?
When you look to incorporate an international company in an offshore jurisdiction, costs can vary significantly. It really depends on which country you wish to incorporate in and which legal entity you choose.
For more information, visit our Top Jurisdictions above, click on the country that interests you to navigate to a more detailed view. For any other questions, contact Fast Offshore.
Documents included in all Offshore Company Incorporations
The Certificate of Incorporation issued by the local registrar
The Memorandum and Articles of Association.
A company legal address (registered address and where applicable registered agent)
The share certificate(s)
The resolution relating to the nomination of the director(s) and the distribution of shares
A dedicated account manager at your service for one year
Important: Annual fees are applicable from the end of the first year to renew your company’s registration and maintain its good standing.
Documents and services included with renewal and maintenance
The payment of all annual government and local registrar fees and charges
The Certificate of Good Standing issued by the local registrar
The Certificate of Incumbency
Renewal of the company legal address (registered address and where applicable registered agent)
A dedicated account manager at your service for an additional year
Why Fast Offshore?
For over two decades, Fast Offshore has been working in the International Business industry. During that time, we’ve assisted countless clients in incorporating offshore companies, opening offshore branches, setting up trusts in offshore jurisdictions, and opening an offshore entity and applying for applicable licensing. We have experienced almost every conceivable business scenario and have guided our clients through the process smoothly and efficiently.
22+ years of experience
Fast turnaround time
Guaranteed professional, efficient and reliable service
Competitive and transparent pricing (no hidden fees)
Ongoing support and assistance
Not only are we top when it comes to experience, but we pride ourselves on honesty and integrity as well. We play by the rules, follow the legal obligations and insist on compliance with all applicable laws and best practices. There is no such thing as cutting corners in our work, and we insist on our customers adhering to the same attitude.
As our client, you are at the heart of our business and our sole goal is to serve your business needs while protecting your interests. If you’re looking for a reliable, trustworthy, and competitively priced partner for your offshore company incorporation, contact Fast Offshore today.
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