What is an offshore company?
An offshore company is an institution based outside the country of it’s company client providing offshore business solutions. Quite simply, a business’ workload is passed on to the institution (offshore company) located outside of the country.
When people register a company in a tax haven, they aim to pay less tax.
A tax haven is a country, territory, or part of a country that offers extremely favorable tax rates. In fact, some of them have a zero tax rate.Examples of tax havens include the British Virgin Islands, Bermuda, Gibraltar, and the Cayman Islands.Small intermediate countries such as Singapore and Hong Kong are also popular places to register an offshore company.
Features of an offshore company
There are many different types of offshore companies. In fact, not everybody sets up an offshore company for the same reason. However, they all share the following core features:
– They do not pay corporate tax in their home jurisdiction.
– People set them up with ‘business flexibility’ in mind.
– Corporate rules and regulations are usually less stringent than in the country where they are active.
– It is difficult to get information about them. Information regarding the company’s set up, structure, activities, and behavior is not available to the public.
In the Cayman Islands, for example, there is virtually no information available to the public. However, in Hong Kong and Singapore, law enforcement authorities have access to much more data.
Why use an offshore company
Professional trustees and nominal officials in the country of incorporation perform routine contacts with the local government, but take no active part in and have no authority to manage. The reasons for the use of offshore corporations include:
- Low or zero taxes
- Ease of international operations
- Freedom from state regulation
- Multi-currency funding of accounts out of the country
The above information hopefully clarifies the offshore company definition. Offshore companies are usually formed in tax haven countries where there are minimal or no taxes at all. Countries with no taxes are also known as tax havens.
The world is becoming smaller in terms of communication and travel, and with the ubiquitous online presence, it is making offshore incorporation easy, quick and inexpensive. This makes investing your assets more than profitable because you don’t carry a heavy tax burden.
THE STORY BEHIND OFFSHORE COMPANIES
Setting up an offshore company is a legal, effective way to protect your income from any greedy mouths (like that of whatever western government you call home).
Apple, Google, Microsoft, Starbucks–These businesses use offshore corporations to save a lot of money and grow their businesses on their own terms. Saving money with low tax rates means more money to reinvest in their companies
And your company doesn’t have to make billions of dollars in order for you to apply the same principles to your business and get the same low tax rates. There are legitimate strategies that international business owners and investors can use to reduce taxes and grow their business.
The most important part of these strategies is they’re 100% legal. You just need the right advice (and a little bit of money).
PROTECTING ASSETS FROM IMPENDING LITIGATION
Frivolous lawsuits, ex-spouses, crazy family members, ex-business partners–money leeches are everywhere, and you never know when they’ll come gunning for your assets. Setting up an offshore company can provide increased protection for your assets against the crazy people who want to sue you for them.
SHIFTING THE TAX BURDEN IMPOSED UPON THE COMPANY
Think of profit taxation as an expense that can be reduced. The global tax market is the legal, lawful system you can use to reduce taxes. Every nation has different policies and budget requirements. That means you can find much lower tax rates offshore than what you currently pay in the western country you call home.
Let’s be clear here: legally reducing your taxes through an offshore corporation is not the same as trying to evade taxes altogether. The former is legal, the latter is not. If you’re trying to evade taxes, you’re in the wrong place (and also, you’re an idiot).
What could you do for your business with the money you’d save if your tax rate legally went from a steep 40% to a low tax rate like 5%? If you could greatly reduce taxes on your business this year–what would that mean for the future growth of your business?
PROTECTING THE COMPANY FROM POLITICAL UNREST
Political unrest, inflation, hyperinflation–you can’t control any of these occurrences. But you can insulate yourself against them. Forming an offshore corporation can act as a safeguard against any potential turmoil in your home country.
WHAT TYPE OF OFFSHORE COMPANY SHOULD YOU SET UP?
Low taxes, secure business assets, and insulation against unrest at home–starting an offshore corporation is probably sounding pretty good right about now.
But starting an offshore corporation isn’t as easy as going online and signing up. Speaking with an expert will help you figure out which type of offshore corporation strategy will work best for you.
Maybe a Limited Company in Hong Kong is the right move for your offshore corporation–foreign profits aren’t taxed and local Hong Kong profits are only taxed at 16.5%.
A private limited company in the UK or Australia might make sense for you, or even an offshore PLC in Singapore (it won’t get you to 0%, but it will reduce taxes). Each type of offshore company and each jurisdiction have their own unique strengths and appropriate uses.
While the process of forming an offshore corporation is straightforward (and can be done in a matter of minutes, in some countries), laying the proper groundwork before and after the official process is important.
You need to consult with a provider who understands the rules and regulations in your home country, which most so-called “lawyers” on some deserted island have no idea how to handle (since most of them are just deflated volleyballs with painted-on faces).
The best thing you can do is choose the right representative. Overpaying a little up front is a no-brainer when it comes to your peace of mind down the line. iPaytotal has partnerships with agents all across the world to get you the best offshore solutions customized for your business.
iPaytotal can help you form legal entities in
- Anguilla, Offshore Company
- Belize, Offshore Company
- British Virgin Islands (BVI), Offshore Company
- Cyprus, Offshore Company
- Dominica, Offshore Company
- Dubai (RAK), Offshore Company
- Gambia, Offshore Company
- Gibraltar, Offshore Company
- Hong Kong, Offshore Company
- Latvia, SIA
- Liberia, Offshore Company
- Liechtenstein, AG
- Marshall Islands, Offshore Company
- Panama, Offshore Company
If you decide that starting an offshore company is the right move for your business, then you will want to choose an experienced firm that can help you set up the organization properly. iPayTotal has years of experience working with clients from all over the world. We offer a range of offshore services that can help you establish your company quickly so that you can start taking advantage of the benefits as soon as possible.We go the extra mile to ensure that offshore company can also help you save money. Offshore companies typically pay lower taxes than those that are incorporated within their home countries. Paying lower taxes means that you can reinvest the company’s earnings or keep a larger profit without handing a lot of money over the government.
A perfect offshore location offers:
- Political stability
- Internationally recognized reputation
- High data security standard
- Non-bureaucratic business law
- White listed by OCED
- Recognized jurisdiction
- Modern banking and financial services
- Access to modern IT and communication means
- Easy Access with regard to authorities and institutions
- Good infrastructure
Which country offers the ideal structure for my offshore company or foundation?
This is a comprehensible question of entrepreneurs as soon as they become involved in the process of founding an incorporation with the purpose of asset protection or inheritance planning.
Worldwide countries and British overseas territories, as well as low tax countries and tax havens, offer the chance to found an offshore company. Some offer better conditions than others.
Countries like the Cayman Islands, Anguilla, British Virgin Islands, Gibraltar and the Channel Islands (Jersey, Guernsey and Isle of Man) have signed international treaties which are based on the US-Foreign Account Tax Compliance Act (FATCA) and which make the automatic exchange of information possible. This exchange normally refers to a private account and not a corporate or trust account. In our view, nevertheless, such countries are not ideal for persons seeking for high level privacy.