Establishment of a business entity outside the owner’s country is called an offshore company. The term “Offshore” is associated with commercial practices that deal with insurance policies, investments, real estate. An offshore company’s specific definition varies by jurisdiction. Offshore company functions like other companies. They can carry out the same business activities; possess similar management structure, issue share to its shareholders. The main difference is the tax structure and confidentiality level.
The Offshore registration process is similar to the onshore business. The prime differences between offshore and onshore company are the offshore company will not pay any taxes and some jurisdictions allow the regular companies to do business in and out of the country. However, the offshore company is not allowed to do business outside the jurisdiction. Offshore company registration takes normally one working day or sometimes up to two weeks of time.
The Offshore registration can be done for various types of the business corporation in different countries. Offshore company formation will not be without any benefits for the company owners. Limited liability companies, International Business companies, and partnership firm can be registered under offshore registration. Foundations and trusts will also come under this registration.
Offshore company’s registration is completed by submitting a complete Memorandum and Articles of Association to the Registrar of Companies. The document will encompass with basic information like name of the offshore company, authorized share capital of the company, shares value to be issued, the numbers and types of shares to be issued, the name of the registered agent, etc., Along with a registration fee the information is filed. To form an offshore company most of the jurisdictions accept one shareholder and one company director. The shareholder and director can be the same person. Some jurisdictions state that the offshore registration must be completed with at least two or more company directors.
Benefits of offshore registrations:
Favorable Local Corporate Legislation – Most of the offshore jurisdictions have to assist legal frameworks which would encourage and promote the offshore industry growth and foreign investment.
Tax Benefits – Many jurisdictions offer either zero or low corporate taxes along with the exemption of other taxes say value added, stamp, capital gains, income, sales.
Ease of Incorporation – Straightforward procedures for Registration and Incorporation and it may take sometimes only 24-48 to complete the process. It requires preparing and providing all the required documentation before forwarding incorporation paperwork to the right authorities.
Possibilities for relocation – Smooth transition possibility is offered by many jurisdictions without any restructuring or cumbersome documentation.
Flexible Management and Minimal Reporting Requirements – A Minimum number of shareholders and directors are required. Account information, annual returns, financial reporting are not required often.
Confidentiality – Offshore companies offer total privacy to keep the business affairs confidential. If a Trust holds the company’s shares, the ownership is lawfully granted to the trustee, thus achieving the prospective for even greater tax plan advantages
Reduced administration – An offshore company’s director or officer will seek less legal obligations. The accounting need, staffs or a physical office can be altered with economical virtual office services that save both money and time.
Why choose offshore company?
To protect assets, maintain privacy, reduce costs, manage risk, avoid bureaucracy, reduce tax, and enhance assets.