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Annual Maintenance of Offshore Company. What for and Why?

When you register an offshore company, you will be required to pay registration fees that include state fees, registered agent’s service fee, the costs related to renting an office, and the legal address fee.  Usually these fees imply the possibility of official operation of the newly established company throughout a year. It is very rare that at the time of incorporation the fee is charged for two years of the company’s operation.

In order for the company to continue operating in a regular mode, it is necessary to keep it active and regularly renewed. What else do the annual offshore company maintenance fees include? Why are these fees necessary, and why is it worth paying these bills?

Payments for a foreign company

Annual Maintenance of Offshore Companies

Any and all offshore companies that are focused on a long-term operation must effect annual maintenance payments:

  • established state fee;
  • payment for the services of a registered agent (in many jurisdictions, their services is a prerequisite);
  • payment for the registered office and legal address.

This list of payments also includes preparation and filing of the company’s statements, and courier services. 

Additional expenses also include accounting support (preparation and filing of financial statements), preparation and obtaining of the Certificate of Good Standing for the company, execution of the Powers of Attorney (notary services), preparation and certification of tax returns, obtaining and renewal of permits (licenses). The list of additional fees may vary depending on the needs of a particular offshore company.

Annual Maintenance of an Offshore Company in Dominica

Non-residents usually establish international business companies (IBCs) in Dominica. The annual registration fee amounts to 500 USD. The Certificate of Good Standing will cost your company 100 USD, and the Certificate of Incumbency is 150 USD. Other services may be provided upon request.

Should you wish to transfer your company to a classic offshore such as Dominica, you will need to pay 2,450 USD. If the owner decides to go out of business in Dominica, then the liquidation process should be initiated. The cost of this service is 2,400 USD. 

Annual Maintenance of an Offshore Company in Panama

Payments for the annual company maintenance in Panama amount to 7,250 USD in total. This is the basic package. It makes sense to renew your company between January, 15 and July, 15 if it was established in the first half of the year. The companies registered in the second half of the year are renewed between July, 15 and December, 31. If you use a professional director service, the cost will increase by 3,400 USD.

Extra services and documents:

ServiceCost, USD 
A set of copies of the incorporation instruments (notarized)450
Preparation of the Minutes360
Share Certificates450
Full Power of Attorney (notarized)300
Declaration of Trust (notarized, no apostille)420
Declaration of Trust (notarized, apostilled)480
Letter of reference from a banker450
Certificate of Good Standing (apostilled)450
Certificate of Incumbency270
Certificate of Incumbency (notarized)360
Certificate of Incumbency (notarized, apostilled)510
Company dissolution3,000
Fund dissolution3,000
Fund/Company reservation240
Fast-track entry to the Register1,050
Change of registered agent1,320
Company seal180
Global courier delivery200

In addition to that, the annual maintenance of an offshore company in Panama may include payments for an office, preparation and filing of the financial report.

Why Do I Need to Pay for My Offshore Company Maintenance?

Sometimes the offshore company owners ignore these annual maintenance payments, do not pay for secretarial services, and expect that this way the company will get self-dissolved. Indeed, in a while such an offshore company will be removed from the lists of active companies. But all of its obligations will still remain with the owner. But if the company has been active for a certain period of time, and it had a bank account, then this company may have problems. If the funds have not been previously withdrawn, they will be frozen, and a penalty will be charged for the services. Companies that have not paid the annual maintenance fee have no right to do business, manage their accounts, or defend their interests in court.

Important note! If a nominee service was used for the directors and/or shareholders, but the company was not renewed, the registration authority will assign all the positions to the actual company owners (beneficial owners).

Registered Agent for Offshore Company

Any offshore company needs the services of a registered agent. After all, the offshore company owners often manage their businesses from abroad and cannot fully keep track of all changes to the legislation, deadlines for mandatory payments and other important issues. A legal practice at the place of company registration takes all these responsibilities and keeps the company active. Registered agents have special licenses. Their business is strictly regulated.

Their responsibility includes::

  • updates on the changes to the legislation of the offshore jurisdictions;
  •  reminders about obligatory payments for maintaining an offshore company;
  •  preparation and forwarding of incorporation instruments at the owner’s request;
  •  payment of state fees and fixed taxes on behalf of the offshore company;
  •  filing of reports to the state register;
  •  making changes to the incorporation instruments;
  •  translation and certification of documents;
  •  storage of books and accounts;
  •  forwarding the company’s Certificate of Good Standing to the bank.

In a word, you will have no need to worry about mandatory payments for the annual maintenance of your offshore company, it will be taken care of  by a reliable registered agent. In this case, the company will be maintained active for as long as its owner will need it.

If the company is no longer necessary, then it is recommended to take care of its dissolution. If the annual maintenance fees have risen unreasonably in the jurisdiction of incorporation, or if other circumstances affecting the business have changed for the worse, then the company can be re-domiciled to a more appropriate jurisdiction.

Should you have any questions regarding the registration, maintenance, re-domiciliation or dissolution of an offshore company, please feel free to email us at info@offshore-pro.info.

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