- Challenges of your make-or-buy decision to acquire a ready-to-use offshore company
- Reasons to go offshore to jumpstart a foreign company
- Should you buy a ready-made entity or register an offshore company de novo?
- How much does it cost to buy a ready-made business?
- Where should you buy or register a non-resident offshore company?
- How to open an account for an offshore company: things the salespeople won’t tell you
- Fail-safe acquisition of an offshore company: a step-by-step guide to a make-or-buy decision
Is your plan to make or buy a ready-to-use foreign company, open its bank account, start earning profits and live in peace ever after, enjoying low tax rates and high confidentiality guaranteed by the host jurisdiction? This is quite a feasible plan. However, beware of scams! Unfortunately, too many promising offers popping up in an online search are mere bluffs that leave the investors empty-handed.
This article focuses on the safety issues and sound solutions for would-be buyers and founders of offshore companies. How to be alert to the hidden pitfalls, twists, and traps on your way to becoming a fail-safe business owner?
Pro tip: The only way to avoid fraud is by assessing the offer in advance in an unbiased manner devoid of illusions. The best strategy would be to discuss details with seasoned experts and rely on their professional judgment before jumping into anything.
Challenges of your make-or-buy decision to acquire a ready-to-use offshore company
Many entrepreneurs across the world decide to buy a shelf company as a quick fix. For example, one’s expectations of a lucrative contract with an advantageous partner or a very promising international tender may prompt a fast acquisition of a foreign company.
Please note that an offshore company is often defined as any foreign entity registered in a jurisdiction other than the place of residence of its owner.
This article is focused on companies incorporated in offshore zones or countries offering favorable tax regimes.
For decades, the purchase of ready-to-use offshore companies has been fast and easy in such classic offshore destinations as Belize, British Virgin Islands, Nevis, etc. In many jurisdictions, the legal transfer of ownership can be settled within 1 business day.
A ready-made company can be of 2 types:
- an aged shelf company (also known as a shell company) registered to be sold off and not in operation since incorporation;
- an active business – a currently operating company with some history.
Most often, when someone offers “to buy an offshore company” they mean a shelf company.
Which type of company is safer for the buyer? Isn’t it better to start your offshore entity from scratch? Where are the most favorable conditions for that? How much would it cost? How long will this take? What are the requirements? These and other questions need to be answered for the make-or-buy decision.
Reasons to go offshore to jumpstart a foreign company
Why buy or register an offshore company at all? There may be many reasons and needs for such a move:
- to enter international markets and optimize export/import operations;
- to benefit from preferential tax options;
- to protect assets, park funds, diversify risks;
- to protect personal data from fraudsters;
- to open a company or a subsidiary remotely, without a personal visit;
- to jumpstart cost-effective business operations in a favorable environment;
- to avoid the requirement to pay the registered capital (such a freedom is legally possible in some countries);
- to contact a professional CEO;
- to register vessels, vehicles abroad;
- to invest in real estate;
- to seek a second citizenship as a backing plan;
- other reasons.
Being aware of the needs of international entrepreneurs, many countries, including high-tax jurisdictions, are interested in attracting direct investment from abroad and thus offer beneficial conditions to international investors.
For example, Canada and the United States allow a zero corporate tax to foreign companies registered on their territories, many jurisdictions have introduced simplified fast-track registration and other incentives.
Should you buy a ready-made entity or register an offshore company de novo?
What do our experts recommend – a turn-key offshore company or registration of a new offshore company?
If your deadline was yesterday, you would most likely consider buying a ready-to-use company. Such a decision is quite justified, as a purchase deal may be finalized in just a couple of days.
On the other hand, by starting an entity from scratch you generally commit yourself to a longer procedure. While in some jurisdictions it takes just 1-2 working days to incorporate a new company (for example, Nevis or Marshall Islands), in other jurisdictions it can take a week only to check the availability of your future company’s name and make the name reservation. Not to say about the incorporation process, obtaining a tax number, etc.
However, if you register your own company, you can:
- choose a suitable company name;
- refine the Articles of Incorporation to your needs rather than use a standard document;
- decide on the amount of the share capital matching your situation;
- plan in advance where and how to open a corporate account and (with this decision in mind) choose the jurisdiction of incorporation.
How much does it cost to buy a ready-made offshore business?
Perhaps the most topical question is how much it costs to buy a ready-made offshore company / to register an offshore company from scratch?
The formula for the total cost is: state duties + registered agent’s fees + filing and forwarding costs + legal address rent + additional expenses (a corporate account opening and maintenance, services of an accountant, director, consultants, etc.)
Please note that many internet resources publish misleading information about the costs of offshore company registration. Low prices often include hidden obligatory costs, making you pay distinctly more than it was stated in the initially lucrative offer. Quotations that go as low as USD 300 – USD 500 for a ready-made company should NEVER be trusted.
The actual total costs are much higher for the following reasons:
- The annual state duty for a classic offshore incorporation and renewal starts from USD 300.
- Services of a registered agent and/or notary are country-specific and can be worth from a few hundred to several thousand dollars.
- The rent of a legal address usually starts from several hundred USD per year. Please note that legal address is the obligatory requirement for a company registration in most countries. In addition, in some jurisdictions is required what is called the substance – the actual presence of the company in the jurisdiction of incorporation, though the requirements do differ and can be quite basic;
- The fees of international courier services are country-specific yet also are inevitable.
We have mentioned above only the underlying costs of the company formation. If a company has existed for a while, its maintenance by the previous owner and some other additional expenses are often also subject to payment.
If you want to open a bank account, you will often be required to submit apostilled copies of statutory documents. A fee is also charged for assistance in opening a bank account, and banks charge a commission for processing the application of a non-resident client.
Therefore, our costing of the most affordable offshore company formation in 2021 starts at USD 1,300 and does not include the opening of a bank account.
We hope you find this information useful. At least this rough estimation allows you to assess the minimum costs of buying a company.
The actual price range depends on the jurisdiction of incorporation. It also depends on the requirements and costs related to licensing, staffing, office rent, and maintenance, etc.
That’s why we recommend package solutions including company registration + apostilled documents + a turn-key bank account. When you consider our offers you will see that our packages will save you money, time, and effort, and will secure your ownership of a functioning company at an agreed price, without any extras to be paid for after the purchase.
You are welcome to book a free online session with our expert on selecting an account for your future company.
Prof hint: Given the current situation in the world, it would be unreasonable to rush into buying or creating a company BEFORE you have chosen the bank that will suit your needs and business.
Let’s state it once again that if you’re offered to buy an offshore company on the cheap, be prepared to pay dearly for such a risky experience.
Where should you buy or register a non-resident offshore company?
The choice of the country of offshore registration depends on the goals you set for the company. Some choose a jurisdiction based on its tax policy, easy licensing, and the reasonable costs of the company’s overall maintenance.
For example, one of the safest options offered by our experts at the moment is the purchase of a classic offshore company in the Marshall Islands.
It is also possible to hand-pick for you a ready-to-use company in any other offshore jurisdiction if you send us your request with details of your plans and considerations. It can be in Nevis, Seychelles, Belize, the British Virgin Islands, and so on.
There are also opportunities in such recently popular jurisdictions as Latvia, Estonia, Canada, Hong Kong. We never come up with standard fit-for-all offers. To customize our recommendations, we need to get your detailed information and discuss all options during a free consultation.
The discussion will be focused on the parameters by which this or that jurisdiction will fit your ambitions and situation. One of the key parameters will be your prospects of corporate banking. Thus, if you need a European account, you will have to assess together with our experts the chances to register a European company. If you need an account in the USA, you will consider the acquisition of a company in the United States.
Please see the list of countries where we offer our services
How to open an account for an offshore company: things the salespeople won’t tell you
A corporate offshore bank account is the most important planning detail before buying an offshore company.
There have always been two complications to be aware of:
- It is not easy to open an account for a classic offshore company;
- It has always been quite challenging for a brand-new company to open an account, and even more difficult if the company has a history.
However, today, you can open accounts for an offshore company much easier, and in some cases, quite quickly.
The best option is to choose a bank account before the company registration. This means:
- to specify your company’s development plans and business profile;
- select the relevant financial institution (and the jurisdiction) that would meet your company’s needs in the future; you will need to contact this institution for preliminary feedback on your wish to cooperate with it;
- make the final decision about the jurisdiction of incorporation or purchase of your company.
Only then you should proceed to the company acquisition or registration procedure.
Please note that it is impossible to buy a ready-made offshore company with an existing account which you would be able to use unless it is an active and successful business.
After the transfer of the company ownership rights to you, the bank will usually need to restart cooperation with the company and may even close the existing account, so the existing account will not be valid. That is why you will need to apply anew and pass the due diligence in any case.
Nowadays, it is easier to open an account for an offshore company, compared to what it was like some time ago. This is especially true for a new company that hasn’t run operations yet.
To open a foreign account for an offshore company in European countries is more difficult than in many other regions. But again, it all depends on the company, the jurisdiction, and some other parameters. Some applications are processed quickly, some are rejected after a sophisticated compliance check.
Even the owner’s country of residence can make a difference.
To sum up, it is a quite feasible task to open an account for an offshore company. But it takes professional analysis, planning, and assistance. You just need to consider the nuances and be prepared. Please note:
- An account is unlikely to be opened in Europe with a bank, but it is quite possible to be opened with a European payment system;
- The application processing time may last for months due to the bank’s very meticulous scrutiny of the business profile, history, and standing;
- The documents you submit to the bank and the answers you give to the officers’ questions need to be impeccable;
- Payment systems are a sound alternative to banks. They open accounts, process transfers and currency conversion.
Requirements set for applicants in terms of document preparation are usually a real quest. Every bank has its peculiarities. For example, one international bank can be ready to provide services to offshore companies (if they prove to comply with the requirements during the Due Diligence check). However, this very bank may reject applications or documents with an inked signature of a ‘wrong’ color (in black ink, not in blue)…
This is where an expert comes to your rescue:
- the blanks to fill out will be forwarded to you for free,
- the bank’s requirements will be explained,
- the package of documents will be inspected for errors, omissions, and other faults,
- the risks of failure will be mitigated to a minimum.
Given that the portal works with banks around the world, we can guarantee that our experts will find a solution that suits you best.
Fail-safe acquisition of an offshore company: a step-by-step guide to a make-or-buy decision
To avoid any complications, risks, and long-term problems here is what you will need to take care of.
- Decide on the goals that you are pursuing by buying an offshore company.
- Book a free private web conference with our expert to discuss the selection of a foreign account. Our expert will offer several options/solutions to help you choose the most favorable jurisdiction, bank, account, and warn you against wrong steps.
- Make your final decision about where you should register or buy your company
- We will help you negotiate and conclude the purchase contract or register a company in the shortest possible time.
- Then we will immediately start opening a bank account with the shortlisted bank.
- An offshore company is a powerful tool for asset protection and international business. To acquire a company abroad, one has to invest some time, effort, and resources in a fail-safe procedure of company purchase or registration.
- Please never trust offers luring you to buy a shell offshore company at cheap. Most likely, such temptations are plotted by scammers as a sunk cost trap and a snowball of expenses.
- Always consult with reliable experts. You are welcome to take advantage of our FREE one-on-one sessions with seasoned professionals. Listen, discuss, then make a decision.
We will continue to publish our reviews and updates of the real state of affairs on the offshore market. So, follow us and contact our experts at the e-mail address given at the top of this page.
How to buy an offshore corporation?
To buy an offshore business, you will need to i) compile the required documents (a certified copy of the passport and proof of residence address of the owner; ii) pay for the service. The service fee depends on the chosen country, the status of the company (a shelf or an active entity), the need to obtain licenses or open accounts.
Should you buy a shelf entity or register an offshore company de novo?
You can buy a ready-made company or register a new one. The choice depends on your goals and objectives. If time is critically important to you, the acquisition of a ready-to-use company is the best solution. If you can afford a few days more, it’s better to start a new company, choose the right corporate name, refine the Charter, and pay much less than the price of a shelf company (all costs considered).
How much does it cost to buy a ready-to-use offshore?
The formula for computing the total cost is: the state duties + registered agent’s fees + filing and forwarding costs + legal address rent + additional expenses (a corporate account opening and maintenance, services of an accountant, director, consultants, etc.) Depending on your aspirations and operation, the price can range from a few thousand dollars to a few dozens and even hundreds.