Offshore company registration procedure in 2021: how to set up an offshore company

Why are offshore companies still being registered, and what are the registration procedures in the era of transparency? This question is more relevant than ever. The media offensive against offshore jurisdictions is ongoing, but getting an offshore company set up remains a sought-after service in the international market. However, the environment has changed. More information on the ultimate beneficial owners is now required for disclosure. Maintaining an offshore company, for which it is still possible to open a bank account, requires more resources. From accounting, to a real office, to employees, to a website and a corporate email domain for communicating with one’s banks and counterparties.

In this article we will discuss what an offshore company is, what it is for and how to start one.

Contents:

How to register an offshore company: what is an offshore company?

An offshore company is a legal entity registered in a country with favorable corporate laws. Classic offshore laws most often imply various benefits and opportunities for foreign investors and business persons, i.e. simplified reporting and accounting regimes, taxes, management, a high level of the owners’ data security.

Since every country is interested in attracting foreign capital, elements of similar laws are present in almost every jurisdiction. Even if it is not officially called an offshore or tax haven by the media or international organizations, it may be one for overseas investors.

Here are several examples of classic offshore jurisdictions: Nevis, Belize, British Virgin Islands.

And these are the examples of mid-shores (jurisdictions providing certain exemptions for business but not considered offshore): Singapore, Hong Kong, Panama.

And finally, a couple examples of onshores (regular countries with high taxes): UK, USA.

Meanwhile, the US is now recognized as the largest and most secretive offshore in the world, as it provides a high degree of owners’ data security and tax benefits to foreign investors.

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Why register an offshore company?

What is this company for? Such legal entities are used for several typical tasks:

  • Running pro-active business in the international market;
  • Management of one’s foreign assets (real estate, investments, etc.);
  • Import and export operations;
  • Work with international partners;
  • Establishing a holding company;
  • Protection of ownership of any assets, in particular against illegal seizures;
  • Protection of data from inquisitive journalists;
  • Access to foreign resources such as loans, investment opportunities, markets, etc;
  • Diversification of risks by distributing assets to “different baskets.”

Today offshore is so strictly controlled, both at all stages of the procedure and at the stages of opening a bank account and carrying out every single transaction, that illegal operations with a higher probability of success can be implemented onshore. However, the main objectives of any offshore company that is not a fly-by-night are quite different.

How to register an offshore company: is it legal to register an offshore company?

Media offensives against offshore companies are ongoing. Regular leaks of protected data (Panama Papers, Paradise Papers, OffshoreLeaks, etc.), together with accusations that offshore companies are trying to evade taxes give the impression that offshore companies are out of law or on the fringes of it.

However, this is not the case at all. It is perfectly legal to register an offshore company, whether in a classic offshore jurisdiction, mid-shore or onshore. This will require a package of documents, the correct completion of forms and the help of experts who will speed up the procedure and keep you safe from frequent mistakes.

Should you have further questions on the legal aspects, please contact the email address at the bottom of the article.

How to register an offshore company: how fast can I register it?

It is important to keep in mind that one can register a company quite fast. However, it is by no means what it says in some brochures, an hour or even a day.

The point is that the time needed for getting a company registered includes several procedures. The first part is the time required to prepare the documents. Collect them, get them certified, send them to the experts, make sure there are no mistakes in filling in the forms.

The second part is actually establishing the company. The time required for that depends on the country where you decide to register an offshore company. Certain jurisdictions may take a few business days, and others may take a couple of weeks. Do not forget that the calendar of national and religious holidays, carnivals, and siestas is very different from one country to another. In addition, time zones have to be taken into account. Many popular offshore jurisdictions are on the other side of the globe, so when calculating the time required, please take this factor into account as well.

Another factor that affects the time required is the choice of extended services, which is better done at once so as not to pay for courier delivery several times. It does not apply directly to offshore company incorporation, but it does affect the viability of your business. What are these extended services? Professional directors, bank account, office rent, accounting service, website, staff recruitment, etc. Certain things, such as opening a non-resident account, take a few weeks to get it up and running.

This is why the question of timing should be discussed with an expert at the time choosing a location.

How much does it cost to register an offshore company?

The cost depends on:

  • Jurisdiction;
  • Services you pick up.

There are some areas that are conventionally affordable, and others where it would cost thousands of dollars to set up a company, not including the share capital. Certain countries require an annual incorporation fee.

Depending on the type of business, you may need a license the renewal of which also requires funds (banking, insurance, gaming).

The initial costs also depend on your willingness to risk the lack of quality substance, from the need to rent an office, to hiring staff, the bank account requirements, etc.

Going offshore in the age of transparency is by no means a penny-worth undertaking. That is why everything needs to be planned just as carefully as a business funnel for clients.

How to register an offshore company: where can I register an offshore company?

There are still plenty of places to open an offshore company. Virtually everywhere abroad they offer you an opportunity to register it.

The choice depends on the purpose for which you are setting up the legal entity.

If your goal is to trade with China, consider Hong Kong and Singapore. If you are entering the US market, explore the Caribbean as well as Panama.

For those in need of asset protection from the encroachment of crooks, Nevis or Belize is the way to go.

A financial start-up? UK, Estonia, Ireland, Luxembourg.

Gaming license: Curacao and Costa Rica. Banking: Vanuatu, Saint Lucia.

At the beginning it is much more important to understand what you need a foreign corporation for and what your goals are, and then ask the experts of our portal to advise you on what would suit you best.

How to register an offshore company: what do I need to know for that?

In this article we would like to discuss certain important things that will keep you out of trouble as a business person. The fact is that the industry is indeed under a lot of pressure from international organizations and major governments.

They fight tax evasion, terrorist financing and the laundering of the proceeds of crime.

The old approach no longer works. Decades ago, it was possible to open a secret firm with no documents, transfer profits from any part of the world, keep no records and accounts and live happily ever after.

Now, in order to use your company and benefit from it by getting  access to new markets, asset protection, and the ease of tax burden, several requirements must be met:

  • Any company must keep accounting or other records. If the business is in a mid-shore or onshore, it must also conduct audits and other related procedures, if the corporate law requires so;
  • Any legal entity must have a real presence in the country of residence (substance): an office, employees, telephones, workplaces or at least a functioning website, in addition to real operations that meet all legal requirements;
  • The company undertakes to comply with international requirements for transparency and legality.

Another point: each jurisdiction has a different reputation. Depending on that, opening a bank account may become easier or more difficult. The reputation also affects the interaction between countries and the number of inspections. If a jurisdiction is blacklisted in another country, it adds extra hassle to the business.

The newest clause to look at is the tax residency of both the company and its owners (beneficial owners) and directors. Where do the beneficial owners and directors actually reside and pay taxes? The tax residency of managers and directors affects the possibility of taking full advantage of the company.

You can find out more details about tax residency for businesses from your advisors. Please use our email specified at the bottom of the article.

How to register an offshore company: extended services

What else you might need:

  • Opening a bank account. The requirements of the banks are extremely high, so we recommend that you make an appointment for a consultation on selecting a bank account before you contact the institution. Otherwise there is a chance of ending up without an account for a registered company;
  • Bookkeeping. If you don’t know how to do the bookkeeping for an offshore company, ask us about it. We will be happy to assist you.
  • Services of professional directors. This allows you to improve your data security. It is not  available in all countries. Please check with our experts;
  • Obtaining a license. Gaming, banking, insurance etc. Some businesses require a license and we can help you with that.
  • Other.

Offshore company registration procedure

  • Make an appointment with us for a free consultation. It is conducted online, requiring only access to the Internet.
  • Determine the goals and objectives of your foreign company. Based on these, our expert will advise on the right jurisdiction.
  • Prepare the list of extended services.
  • Prepare and submit your documents (in most cases translation into English is required):
    • Passports of beneficial owners and directors;
    • Proof of residence (most often a utility bill);
    • Other documents, depending on the options you pick up.
  • After your documents get checked you will be required to pay the registration invoice. Payments can be made by card, bank transfer, WesternUnion, WebMoney, PayPal. The price depends on the jurisdiction and the set of services.
  • Once the money lands in the account, the procedure begins. The time required for establishing a company depends on the jurisdiction, as mentioned above.
  • As soon as we receive confirmation that the legal entity is registered, you will need to send us the original documents. In return, we will send you the original company incorporation documents. You will receive a copy of the documents as soon as the procedures are completed, and you will be able to start your business operations and/or proceed with the extended services.

Should you have any further questions, please feel free to contact us or email to info@offshore-pro.info.

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