Offshore Company Registration and 1st Year Costs

Your questions about the cost of offshore company registration and maintenance in year one is a reason to discuss the real value of such a venture. 

Offshore company formation remains a popular solution not only because of the owners’ tax bill optimization aspirations. There is so much more to it.

Any offshore company offers a lot of advantages in terms of assets protection, privacy, and ultimate separation of personal assets from liabilities of a legal entity. Moreover, entities incorporated in offshore zones are reasonably inexpensive in maintenance and most often require minimal effort, if the application portfolio meets the requirements. 

The hereby article estimates how much it is to kick-start a business entity in classic zero-tax and low-tax offshore jurisdictions that offer a broad scope of benefits and incentives. We will also look at the average maintenance costs incurred by an offshore company’s owner during its first year.

Cost of Essentials During the First Year of an Offshore Company 

The costs of registration of your offshore company begin with the fees payable to the state. These include the registered agent’s services (engagement of this agent is a prerequisite in almost all jurisdictions), licensing, state duties charged by the authorities. In certain cases, you will also need to pay the courier, notary, and administrative fees, depending on the package of services you order.

If you choose the minimum package of offshore company registration services,  it will include the following must-haves:

1. The fixed state duty (a filing fee).

2. Registered agent’s services in the jurisdiction of incorporation.

3. Annual report (non-financial) prepared by the agent.

4. Administrative office costs (legal address).

5. Courier services. 

Depending on the country of incorporation, additional fees may be charged, for example, for filing an audited financial statement, or a small corporate tax rate (in Mauritius, Liechtenstein, Labuan, Cyprus, and other low-tax jurisdictions).

Possible Additional Costs During the First Year of an Offshore Company

Depending on the wishes of the clients and/or their business needs, the cost of maintaining an offshore company during the first year of operation may involve bills for such additional services as the following ones:

• the services of a nominee director;
• the services of a nominee shareholder;
• mailing incoming address for commercial documents;
• accounting and preparation of financial statements, day-to-day bookkeeping;
• a Certificate of Good Standing;
• Powers of Attorney;
• Preparation of the Minutes of general meetings of shareholders;
• drafting of tax returns, their certification;
• licenses and their renewal; 
• other services. 

The above-mentioned list of extra services is not complete, because each client’s company is a separate case. The customer-specific budget estimates require a tailored approach and a precise study of all the client’s intentions, needs, and nice-to-haves. The spending plans would be different when you open an offshore company for developing e-commerce or set up an international trust, or an investment fund.    

Estimates Across Jurisdictions – Offshore Company Registration and 1^st Year Maintenance Total Cost

Popular tax havens are gradually introducing new rules for company incorporation, as well as for economic substance. Today, many offshore states allow foreign companies registered under their jurisdiction to operate in their territory and obtain the tax residence. At the same time, foreign investors have the right to register an international commercial offshore company without its economic presence in the country of incorporation. Such entities cannot use the advantages of DTT agreements and are taxed at the source of income (in the country of its actual activity). 

We recommend that before you register your offshore company, the most efficient business concept should be designed by/with our experts specialized in international law. We know what it takes to build a structure deriving utmost benefit from the virtues available in offshore jurisdictions. 

Depending on the jurisdiction, the offshore company set-up cost plus the first-year expenses can range from several thousand to tens of thousands of US dollars. 

Overview of company registration and 1st-year maintenance costs across some most popular offshore jurisdictions (the end of 2020*)

Jurisdictions	Registration +first-year costs of S.A./INC/CORP or IBC	Basic package services	Extra costs
The Bahamas	USD 2,850	Company registration. M&A.Seal. Courier services.	Registration at a new address USD 3,810 Redomiciliation to Bahamas USD 3,825
Belize IBC LLC  Payment for next year’s company renewal service (charged at the time of registration)	USD 1,100 USD 1,750 USD 1,400	Registered agent. Legal address. Corporate documents (portfolio or original copies). Courier services	Nominee services: Director USD 1,399 Shareholder USD 1,399
Bermuda	USD 13,450	Fees for registration with the Monetary Authority and Company Register.  Annual fee (to be paid at the time of incorporation).  Registration of the director.  Tax exemption certificate.  Additional costs.	Change of the agent USD 1,000 Professional Executive Director services from USD 10,000
BVI  IBC IBC+apostille+nominee shareholder	USD 2,550 USD 5,850	Company registration.State duty (filing fee) for the registration.  Registered agent services in the BVI.  Legal address. Portfolio or original copies of documents. The first appointment of the Director (mandatory within 30 days after the registration).  Worldwide courier services.	Virtual office package USD 400 per month Certificate of Good standing original USD 400 Virtual office package from USD 400 per month Certificate (the first) of Good standing 400 USD
The Cayman Islands  A company with an authorized capital of USD 50,000	USD 4,500	Company registration.All state duties and filing fees. Drafting and completion of Articles of Association. Memorandum of Association. Minutes of Director’s appointment. Annual renewal fee.	Virtual office up to USD 4,500 Secretarial services. USD 2,250 Fund registration from USD 6,000 to USD 22,500
Dominica (IBC)	USD 2,299	State duty. Legal address. Secretarial services. Registration and data entry. Courier services	Company redomiciliation in Dominica USD 2,450 Liquidation  USD 2,400
Gibraltar Option 1: a company  without documents for the bank Option 2: a company with documents for the bank	EUR 3,300 EUR 3,800	Standard incorporation.  Legal address for 1 year.  Agent’s services for 1 year.  Courier delivery.  In Option 2 – apostilled and certified documents.	Urgent registration:- without documents to the bank EUR 4,200 – with documents to the bank EUR  4,700 Redomiciliation in Gibraltar EUR 4,999
The Isle of Man  Company Company+nominee service+account Company+account Company+nominee service	EUR 8,900 EUR 11,700 EUR 10,900 EUR 9,700	Company registration in the Isle of Man.  Certified :Certificate of Incorporation.  Articles of Association. Memorandum of Association. Minutes of Director’s appointment. Legal address. Registered agent. Nominee Shareholder. Annual tax return). Annual compliance fee. Courier services. Bank account set-up (standard rate of EUR 2,999).	Hybrid company EUR 8,900 Trust/fund registration EUR 5,900
Labuan (LLC with Standard Authorized Capital of up to USD 10,000)	USD 5,050	State duty. Legal address. Secretarial services. Offshore entity registration and data entry. Courier services.	License for a private foundation USD 8,200
Marshall Islands IBC, LLCLP	USD 1,385 USD 2,500	Registration of an offshore company. Filing fee (state duty for registration). Local registered agent. Legal address. Corporate documents (one portfolio of original copies). Worldwide courier services.	Virtual office in Panama USD 3,000 Tax certificate USD 900
Nevis Trust	EUR 8,335	Trust deed and registration in Nevis. PTC with you or your Directors as nominees. Legal address. Courier services	Certificate of Good Standing+ apostille  EUR 725 Certificate of Authority EUR 445
Panama basic package registration+apostille documents registration+apostille+nominals	USD 2,950  USD 3,515  USD 6,770	Incorporation. Administrative office. Registered agent services. Courier. For extended package – issue and receipt of extra documents	Private fund registration – from USD 3,080 Liquidation of the company USD 3,000
Seychelles IBC	USD 2,099	Offshore company registration. Registered (licensed) agent. State duty. Legal address. Portfolio of original corporate documents. Courier services.	Professional Executive Director services USD 3,200 plus operating costs Virtual local office from USD 3,500 a year
St. Lucia  Standard Company without Corporate Account Standard Company+account with St. Lucia BOSLIL BANK Company+account in another country’s bank	EUR  4,500 EUR  6,499 EUR 7,499	Incorporation. Portfolio of original corporate documents Registered agent. Legal address. Apostille. Courier services.  In Options 2 and 3 – documents for the bank.	Certificate of Good Standing EUR 1,000  Registration of the merger EUR 2,100

*The fees of registered agents and other prices are subject to change. The given rates refer to the basic packages and are for your general reference only. For updates, please contact our experts.

Actual total prices depend on the choice of services ordered by the client. Our experts are ready to help with the establishment of offshore companies, as well as entities in onshore, midshore, and low-tax jurisdictions.

Annual Offshore Maintenance Costs

The annual maintenance fee may include (besides the renewal fee and the fee for the registered agent), a variety of fees, depending on the ordered services. The total costs can be computed only after analyzing the client’s needs and requirements. For example, in the case of hiring a professional Executive Director, the total cost significantly increases. Or, if you are the owner of a foreign company and are not going to prepare financial statements, it is necessary to hire an accountant. 

Therefore, the total operating costs of an offshore company need to be specified individually. Moreover, some changes in legislation may and often affect the compensation amounts payable to staff (for example, a secretary or an accountant). 

Please note, that the annual payment of the state duty/filing fees in some jurisdictions is tied to the date of the registration, and no postponement is allowed. This is a recurring mandatory payment. Other essential costs can be inevitable from the second year and onwards and thus increase the total annual amount. Such expenses may be associated with the following needs:

• remission and issuance of shares, including those signed by nominee directors;
• notarization of documents, apostilling of corporate documents;
• submission of the Charter amendments to the Company Registry;
• Certificates of Good Standing, awarded authority, etc;
• change of the registered agent;
• Power of Attorney;
• trust tax returns;
• other. 

Our company is ready to fully support your endeavors and help you issue or obtain all the necessary documents at any time. We can also compile your annual financial statements, conduct audits. If necessary, you can order the liquidation of an offshore company (please note that commercial entities should never be abandoned without annual renewal or complete closure). For more information, please order an individual consultation with our experts. 

It is also useful to keep track of other regular publications featuring all relevant issues, updates of the fee and tariffs schedules, other matters of incorporation, maintenance, renewal of offshore companies.