Which Countries Are the Best to Register Offshore Companies?

An offshore company setup is an ideal solution for international corporations seeking to legitimately reduce their tax burden, enhance confidentiality, and protect their assets. However, selecting the right country to establish an offshore structure can be a complex and challenging task.

Offshore company formation services continue to be a top choice for business owners and stakeholders engaged in business structuring. Offshore company setup may offer an easy start, flexible corporate management, and enhanced confidentiality of corporate and private data. HNWIs and wealthy families also resort to setting up offshore companies as a vehicle for lucrative investments and reliable asset protection.

To select an ideal offshore country to start a business, you should focus on your ultimate business goals and objectives.

The Best Countries for Offshore Companies Incorporation

What are the best countries for offshore companies? This is a rather general question that can hardly be answered straightforwardly. For example, an offshore company setup in some island states may be the ideal solution for owners of some gambling businesses. However, it may not be suitable for setting up offshore companies operating in other business fields.

In any case, the following aspects need to be analyzed:

• the type and status of the existing business entity 
• the specific needs for financial services
• the legislation in the country of the beneficial owner’s residence and the existing company’s incorporation 
• the legislation in the offshore country chosen for a new offshore company formation
• provisions for personal data protection, etc.

In this article, an offshore company is considered not as a business in a tax-free country, but as a foreign legal entity formed outside the owners’ country of tax residency.  By taking this approach, we can select the best countries for offshore companies, depending on the cost of annual maintenance, business field and activities, taxes, and other aspects.

Island States and Territories as the Best Destinations for Offshore Companies 

Foreign investors and business owners name the following island nations as the best countries to set up an offshore company and do business, even in the face of geopolitical risks and crises:

• The British Virgin Islands (BVI) offers attractive conditions for offshore company formation, including zero taxes and access to the global market.
• Nevis is a popular country to set up an offshore company, a trust, and make investments, with the highest level of asset protection from foreign creditors and greedy relatives or partners.
• Saint Lucia is the birthplace of the banking sector for offshore companies, and the best country to start a business on favorable terms, smoothly, and in compliance with relevant international laws and regulations.
• The Isle of Man is an offshore country where a company can be opened for legitimate high-risk business (eg., gambling or crypto-related businesses). The hallmark of this island nation includes data confidentiality, asset protection for foreign owners, as well as benign taxes, and fast company formation.
• Seychelles is a well-known offshore country welcoming investors from all over the world if they plan to start their companies on the islands and expand their business into the global market.
• The Marshall Islands is known for attractive tax benefits and a positive reputation for new companies. Startups can take advantage of the laws and incentives in this country to secure their status as growing global giants and enhance consistent development.
• Belize is an attractive island country for setting up offshore trusts, funds, and companies that are not taxed on their worldwide income but are obliged to comply with the local legal norms, including transparency and duties.
• Saint Vincent and the Grenadines is an offshore country that does not charge incorporation tax and is a unique option for registering an offshore company.

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The Broad Geography of the Best Countries for Offshore Companies

Should you go very far away from your home country to incorporate offshore companies? Not necessarily. While offshore island jurisdictions have been luring international investors for decades to fill their national budgets and help economic development, you can also find very good business incentives in dozens of countries in Europe, Asia, and other parts of the world. Here are some reputable examples:

• Switzerland is a renowned banking hub, a stronghold of banking secrecy and asset protection. Though it is not an offshore country, offshore company owners can build international business structures there and take advantage of the famous Swiss fiduciary management services to expand their business network.
• Liechtenstein is another beneficial country for offshore company registration. It’s an excellent option for the incorporation of public JSCs, LLCs, trusts, and foundations.
• Singapore and Hong Kong are the two most attractive Asian countries for setting up offshore companies. They offer advanced benefits and special incentives for startups.
• Luxembourg, although not an offshore country, is a lucrative choice for investors wishing to open world-class companies in Europe.
• Gibraltar is one of the best countries for offshore companies in Europe. It does not charge worldwide income tax.
• Some US states offer very beneficial terms for startups and offshore banking. These are Delaware, Nevada, Oregon, Arkansas, and some other states, plus Puerto Rico.
• Canada provides incentives to foreign investors and business owners who decide to open a limited liability partnership (LP) in the country.
• The UK is one of the most popular European offshore countries where foreigners can start their companies and enjoy many benefits and advantages. 
• Serbia is a European country with a unique neutral status that makes it an attractive option for foreign companies looking to expand their operations. Entrepreneurs can easily open a branch of an offshore business in this country.
• Turkey is a highly recommended choice for businesses seeking to rapidly and legally expand their activities internationally. Depending on the place of incorporation and the business structure type, company owners may be entitled to significant tax holidays and incentives.
• The United Arab Emirates (UAE) is a renowned low-tax paradise that offers many benefits for both local and foreign companies. With its favorable tax policies and business-friendly environment, it is a prime destination for entrepreneurs seeking to establish a presence in the Middle East.

The Best Country to Set Up an Offshore Company

Please note: Even if you make a deliberate effort to shortlist the countries that are most popular with foreign investors and owners of offshore companies, no expert would encourage you to rely on the statistics and rankings from open sources. 

You need a customized selection of the best countries for offshore companies, and it should be based on a thorough analysis with consideration of your specific needs, status, resources, country of residence, tax residency, plans, etc. This is especially relevant now that the political, economic, trade, social, and environmental challenges may mushroom across the world, and the situation in any country selected for starting an offshore company may become less favorable than just a month ago. 

Now, as never before, you should seek the private advice of a personal trustworthy advisor.

An offshore company can be used to access a wider range of financial advantages and instruments, including tax planning. For example, a bank account opened in an offshore country can help you reach a broader target audience and offer your clients the most convenient payment options. 

Offshore companies can also be used to transfer one’s assets and real property to a trust for efficient management, revenues from trading operations, or profit from intellectual property rights.

Offshore corporations take advantage of the legal tax incentives, thus increasing competitiveness and profitability.

Other aspects that offshore company owners should consider when choosing the best countries for business include:

• provisions for the ultimate owner’s privacy and anonymity 
• bilateral Double Tax Treaties
• reputational risks
• laws in the country of tax residency regarding offshore business
• the business, economic, political, and environmental situation in the offshore country
• the legal system type (English, European, or US law) in the offshore country
• intentions to use the new offshore company as an intermediary in import-export operations
• the possible impact of the offshore country’s prestige and reputation on your business success, etc.

When choosing the best country to set up an offshore company, a trust, a  partnership, or another form of an offshore business, you should also consider the national legislation and the situation in the shortlisted offshore countries regarding every critical aspect of your new business venture. These may include information about:

• the ease of doing business
• the requirements for creating and operating companies
• the list of illegal, prohibited, and restricted activities 
• the list of activities subject to licensing
• the possibilities for subsequent redomiciliation
• the availability of the RBI or CBI (residence/citizenship by investment) programs, etc.

To incorporate offshore companies without too many issues and risks, you need to assess all aspects and rely on professional experts.

When it comes to setting up offshore companies, the choice of country will depend on the business activity type. 

For instance, if you are involved in the export and import of goods, countries like Cyprus, the UK, and Denmark might be your best bet. On the other hand, for software development and IT, your options will include Panama, Dominica, the USA (some states), Canada, Malta, Denmark, Cyprus, Lithuania, and the Marshall Islands.

For offshore real estate investment, countries like the UK, Ireland, Portugal, Spain, Italy, Cyprus, and France might be suitable. If you are seeking a financial license, consider counties like the Cayman Islands, Dominica, Vanuatu, Puerto Rico, Panama, Andorra, and Luxembourg.

For cryptocurrency, brokerage, and currency trading, the Caribbean Islands, the UAE, and several European jurisdictions may be appropriate. If you need to set up asset protection trusts, your options include Belize, Nevis, and Cook Islands.

If you are going to register your company in an offshore island state, the following prompts may be helpful:

BVI is ideal for banking and insurance, investments, financial and leasing activities, IP holdings, shipping companies, and head offices (subject to substance requirements).

St. Lucia offers excellent conditions for trading companies, real estate corporations, financial institutions, and trusts. It is also a great option for setting up your bank.

Seychelles is popular with businessmen involved in insurance and investments, consulting, tourism, and international trade.

Bermuda is suitable for insurance and financial companies operating under licensed service providers. A separate license is not required, and only resident organizations can obtain a license anyway.

Should One Buy or Open an Offshore Company?

Many of you ask us if it is better to buy an offshore company with a bank account or to start your own company with a proper registration date, name, and effective corporate structure. First of all, one should understand how much a ready-made offshore company may cost and whether it makes sense to invest in an already registered company. 

Ready-Made Offshore Companies

If you are planning to buy a ready-made offshore company with an account, say, for a regular business and tax optimization, it may be a challenging task for many reasons:

• The purchase of an existing company comes with its history (not always impeccable).
• The cooperating bank may instantly block the account until all the circumstances regarding the new owners are clarified. In any case, buying a ready-made offshore company with an account will be subject to the same compliance verification procedures as the first-time application to the bank, and you and your business will be thoroughly scrutinized. 
• The decision to buy a ready-made offshore company with an account is not always reasonable, as any business will have to prepare and file a full package of documents. When setting up a new offshore company, you get a ‘fresh’ package for the legal entity, so you don’t have to spend much money to update it (while banks may require documents that are not older than 3 or 6 months). 
• It may be more challenging to launch business operations in certain fields if it is a ready-made offshore company. The change of the company structure and the authorized capital, as well as the fees of the registered agent (if necessary), and other formalities are more costly.  
• Please note that the change of ownership means a change of account signatories. You will have to undergo the same (sometimes more stringent) compliance procedure, depending on the history of this offshore shelf company and the peculiarities of your business structure. 

Turnkey Offshore Companies Setup Services

If you choose a country to register an offshore company from scratch, you can automatically receive the following benefits:

• the opportunity to choose the name, the business entity type, and the registered agent 
• the opportunity to set up a company with a specific registration date
• a new package of documents for the offshore company, so the preparation and submission of papers to the financial institution takes less time
• the company that best suits your type of business and vision.

When assessing the countries to register offshore companies, please note: nowadays we recommend having a business and a bank account in the same country, or better yet, several accounts for emergencies.

Your best solution may be one of the following strategies:

• to set up a company + a U.S. payment system account remotely
• to form a partnership in Canada with a Canadian bank account – remotely
• to open a company in Cyprus plus an account with a Cyprus payment system (required)
• to start a resident company in Estonia with an account in a local bank (substance and personal visit required)
• to form a company in Singapore with an account in a Singapore bank (personal visit required)
• to open an offshore company + account in Serbia (ask our experts for details).    

The basic recommendation is: you should focus only on business and business goals, and only then can you select the most appropriate jurisdiction. For example, for a company that needs to enter the EU markets you should create a structure that will include an offshore company but operate in one of the low-tax jurisdictions. In such a case careful planning is especially necessary. We have many years of experience and can hand-pick the best solution for you.

Does the Bank Matter?

Choosing the right bank is a critical decision when setting up an offshore company. However, not all banks accept clients from offshore jurisdictions. Moreover, rejection rates for non-resident buyers of ready-made companies are higher. The current global crisis has made it even more challenging for foreign entrepreneurs to obtain personal and corporate accounts, as financial institutions have tightened their requirements. 

If you’re expecting difficulties of this kind, you can opt for one of the following strategies:

• buy an ‘all-in-one’ package that includes an offshore company with an account,
• seek the guidance of experienced professionals who can help you open an account for your business abroad.

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Takeaways on Selecting the Best Countries for Offshore Companies

Offshore countries have retained their capacity to maintain the privacy of the ultimate business owners (UBOs), thus allowing them to protect assets and businesses from competitors, raiders, database theft, and other adverse situations. 

The choice of the best countries for business and/or company formation is a purely individual matter. Please rely on the experience and services of our experts. Here is what they can do for you:

• analysis of your request for help and the design of a plan for offshore company registration to meet your goals and objectives
• documents preparation, translation, legalization
• registration of a personal/corporate bank account
• assistance in administrative and technical matters (accounting, office rent/purchase, auditing, agent’s services, etc.).