Offshore holding companies are structures that allow you to safely and profitably own, control and manage a portfolio of separate or related businesses in different jurisdictions.
The holding company serves as parent company, managing subsidiaries around the world. To qualify as a holding company, the entity usually must own controlling stakes in its subsidiaries. In return, many companies offer tax incentives to holding companies, as well as allowing the companies to benefit from DTTs (double taxation avoidance treaties often referred to as "tax treaties")
The parent holding company also provides strategic management of the entire structure. The holding can also finance other divisions and operate a treasury department as an "in house bank".
A typical holding structure is multi-jurisdictional, shifting profits around the globe in order to legally avoid taxes. Big companies like Microsoft, Apple, Walmart and Starbucks use these legal tax avoidance techniques and are often subject to public criticism, but you can be sure they have an army of expensive lawyers to make sure everything they do is legal. At InternationalWealth, our view is that tax competition between jurisdictions is a good thing that brings prosperity to all sections of society.
Fortunately, the cost of doing business worldwide has reduced over the years - so the same offshore holding company strategies employed by the big companies are also available to small companies and startups.
In summary, a holding company abroad can help you protect property rights, optimize taxation, and thereby protect the futures of your business and your employees. An offshore holding company is the place to start.
Learn more about registering a holding company offshore by studying the following articles from InternationalWealth experts, and then put your knowledge into practice!
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