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Offshore company registration procedure in 2024: how to set up an offshore company

Offshore company formation remains a hot topic. Judging by the terms ‘offshore company formation’, ‘offshore company registration’, ‘offshore company incorporation’ typed into our portal search box, your interest in how to set up a company offshore will become even more relevant than ever in 2024. 

Offshore Company Formation

Following your queries, let us focus in this article on the following aspects and some FAQs.

  • geography of offshore incorporation
  • legitimacy of offshore company formation 
  • purposes of offshore companies
  • forms and types of offshore incorporation
  • support in offshore incorporation
  • steps to offshore company registration
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What are the Reasons for Offshore Companies Formation? 

In the eyes of FATF and OECD, many former tax havens are losing their offshore status under international pressure. Let us see why their perceptions are deceiving them.

The geography of offshore company formation is part of human geography. Recent decades have seen throngs of private persons leave their countries in search of more security, economic viability, better environment, and brighter prospects. 

Likewise, many business owners apply for offshore companies’ registration in places where their investments are welcome, offshore company incorporation is reasonably easy, and assets are protected.

Many, however, are in no hurry to pack their bags, as long as they can open a company online and run it remotely. They can wait and see. But just in case of any adverse situation at home, they have their Plan B. So, their offshore corporation or offshore companies are legally registered and help to deal with any black swan. 

Besides, there are digital nomads, creative professionals, and other citizens of everywhere – who ‘chaise rainbows’ all over the world. All they need is the nice environment to live in, the right communication infrastructure, and cheap offshore company formation, preferably with nice perks

A typical set of offshore incentives includes 

  • benign or even zero taxation 
  • minimal or no reporting requirements 
  • enhanced personal data privacy for business owners 
  • asset protection 
  • other advantages subject to country-specific terms for offshore companies registration. 

The benefits of offshore business setup nowadays differ from advantages of off shore corporation or off shore company formation in the tax havens since the 1950-es. 

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In 2022, the list of offshore jurisdictions included over 100 countries: Seychelles, Nauru, British Virgin Islands, and Belize. Nevis, Belize and the Marshall Islands, China, Hong Kong, Singapore, Canada, New Zealand, Turkey, Georgia, Hungary, Cyprus, Ireland. the United Arab Emirates, Great Britain, Malta, Austria, the Netherlands, Lichtenstein, Switzerland, etc. 

You may be surprised to know that the USA is now recognized as the largest tax haven in the world, providing nice tax benefits to foreign investors. Moreover, non-resident HNWIs can place their assets in Delaware, Nevada, Wyoming, Florida and enjoy a high degree of owners’ data security. As you know, the US law requires financial firms around the world to report accounts held by US citizens. However, it does not oblige US authorities to share information with other countries about what happens in the United States. 

Most likely, however, the most advanced economies are NOT the best choice for your offshore corporation or Ltd company formation with a bank account. Why so? Because nations with very strong brands that enjoy good international reputation easily attract investments, great minds, and high-skilled talents. They have little need in offering investors strikingly low rates and exclusive incentives.

On the other hand, nations with weaker, or even blacklisted brands try every way to secure financial, human, other resources for their development. This is exactly why, back in the 1950-es, some island nations (that had historic ties to major economies) established themselves as tax havens. These included Bermuda and other British and Dutch Caribbean territories in the Americas, the Channel Islands and the Isle of Man in Europe, Hong Kong in Asia. They offered locally registered companies zero or low-rate taxation, confidentiality, and protection from foreign taxes and regulations. In the 1990-es, as they upgraded their legislation and infrastructure, these small offshore destinations became very attractive to international corporations and trusts. They turned into legitimate magnets for offshore company formation, and evolved into International Financial Centres (IFCs). 

In the 2020-es, though, the international landscape for such offshore jurisdictions has become rockier. Their competitiveness is curbed by OECD and FATF requirements of better transparency, public beneficial ownership registers, Automatic Exchange of Information (AEOI), and other restrictions. The US, EU, IMF maintain black and grey lists of ‘high risk countries’ that ‘do not comply with their international tax standards’. So, please be sure you check these lists before you apply for your offshore company formation. 

Whatever trends, we all know that the business world is flexible to changes.  The number of applications for offshore company registration is growing where the offshore incentives remain very attractive. Such old evergreen offshore destinations of Nevis, Belize, the Marshall Islands are going to remain high on our customers’ list of popular offshore jurisdictions.

OFFSHORE COMPANY FORMATION: CUSTOMIZED BUSINESS SETUP SERVICES

Is it legitimate to set up a company offshores?

Offshore companies are formed for legitimate activities as legal persons. Just like with other business entities, offshore company formation includes registration and incorporation. Registration means to enter the company’s business name in the Register of business entities for the right to operate under this name, to be licensed, promoted and identified. The certificate of your Company Incorporation gives it a status of a separate legal entity, enhances its credibility, and protects its business name.

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Legitimacy of offshore company formation in a particular offshore jurisdiction is defined and protected by its law.

The specific feature in offshore company formation is that the registered office address is in the country of incorporation/registration. However, such a company is entitled to the reduced tax rates, and other perks only if the company conducts its business abroad, i.e. outside the jurisdiction of its incorporation.  

Before you apply for the offshore company registration, you need to study the local regulations and legal acts on offshore company formation.  Also, you need to check what the law in your home country says about owning a company abroad. You may be required to declare the fact of your offshore company formation.

Which purposes of offshore business are deemed economically and politically correct?

There can be many legitimate purposes for offshore company setup:

  • direct access to international markets after offshore company formation 
  • investment in some property abroad for the sake of assets protection or business development by means of the offshore company formation
  • import-export operations for offshore companies running business across the world
  • cooperation with international partners and partnerships after company formation offshore 
  • inheritance trust setup, diversification of inheritable assets by means of offshore company incorporation
  • access to better banking services, capital, loans, after the offshore company formation with a bank account  
  • opportunity to open and run a company online (the opportunity for remote offshore company formation was particularly of relevance during the pandemic-driven travel ban and restrictions)
  • set-up of a trust or a holding company offshore
  • stronger protection of ownership rights 
  • better personal data protection. 

The offshore company formation purposes will prompt you which offshore jurisdiction to select.

  • If your goal is to trade with China and in Asia Pacific at large, you should consider offshore company formation in Hong Kong and Singapore, or set up a company in Singapore with a corporate account in a bank in Hong Kong. 
  • If you are entering the US market, you should discuss opportunities for investment and citizenship in the Caribbean, Panama, Costa Rica; as well as your possible gains from offshore company formation in Delaware, Nevada, Wyoming. 
  • If your asset protection is the biggest concern, Nevis or Belize can be your best destinations for company offshore formation.
  • For a gambling license, you can consider offshore company registration in Curacao or Costa Rica. 
  • Are you looking for a proper set up of a financial start-up? Set up an offshore company in the UK, Estonia, Ireland, or Luxembourg. A UK company registration with a bank account is an attractive idea. 
  • The best offshore jurisdictions for obtaining banking licenses in 2022 were Puerto Rico, Saint Lucia, Vanuatu, and Panama.

The purposes will also impact your decisions on the form and type of your offshore company.  

For example, revocable trusts in Nevis can be an excellent alternative to the will. Irrevocable trusts in Nevis can protect your property and financial assets from fraudsters, sneaky creditors, rogue competitors, mean or wasteful relatives, and foreign court proceedings. The right trust incorporation in the right offshore jurisdiction is a win-win strategy

What are the forms and types of offshore incorporations?

Offshore incorporation is possible in different legal forms, each configured to offer the best solutions in relevant situations:

  • Limited Liability Company – LLC
  • Limited Liability Partnership – LLP
  • Public Limited Company – PLC
  • Private Limited Company-LTD
  • Company Limited by Guarantee –Guarantee Company 
  • Limited Duration Company – LDC 
  • Unlimited Company 
  • Limited Partnership – LP
  • International Business Company (IBC)

Different types of incorporation serve different business purposes:

  • holding company
  • trust
  • fund
  • trading company
  • offshore bank
  • shipping company
  • professional services company
  • intellectual property company
  • offshore recruitment process outsourcing company(RPO)
  • offshore financial company
  • offshore leasing company.

For more details, please see our topical article on forms and types of offshore incorporation., 

Who can help you with offshore company formation across the world?

The questions about offshore incorporation keep snowballing. Fortunately, you do not have to walk this path alone. Where can you find support?

Our team of seasoned experts and partners working all over the world is ready to support you. Choose from the menu of turnkey business packages posted on this portal and ask for a customized package. 

The best way is to start with a web-based private consultation (free) and discuss your concerns and questions about offshore company incorporation and registration aspects. 

Besides, you will need to hire a locally based Registered Agent licensed to help foreign investors. 

Thanks to this all-around support at all stages, you can get all the arrangements done for you remotely. 

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Your Registered Agent’s competence, our team’s support, together with your active and timely involvement is the key to success in your offshore company formation. 

Inept and reckless use of offshore companies and offshore bank accounts can subject you to account freezes, investigations, legal proceedings, and fines. 

Standard requirements include: copies of passport(s) of the company owner(s), directors, etc.; the application form, payment of the registration fee and the funds transfer to the authorized fund; proof of the legal address, proof of address of permanent residence, references from the bank.

Most refusals are due to such reasons as: inaccurate information about owners, incorrect documents, mistakes in the application form, the wrong choice of the company name, an attempt to open a branch in a blacklisted offshore jurisdiction

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In 2022, to help you learn more about offshore company formation, we published a series of posts on how to choose the right offshore jurisdictions for business relocation, offshore company formation with a bank account, offshore banking, offshore company entity forms and ownership types, economic substance requirements for offshore companies, staffing and salaries in offshore corporations, accounting and tax management issues of planning business offshore, wealth protection concerns of owners of offshore companies, and many country-specific cases on how to set up a company oversees. 

What needs to be done to set up an offshore company?

Offshore company registration will take no less than a couple of weeks, all things considered. This is because the procedure involves several steps, and each of them takes time. 

Step 1 – Make your homework

Select the right jurisdiction for offshore company formation. Compare the favorable terms and the possible risks. Analyze your purpose, trends in your business field, define your target market, estimate available access to the core resources, choose the bank*, assess the relevant legislative norms, and other important details of your plan. Study the requirements for offshore company registration in the jurisdiction of your choice. 

*The bank selection is a crucial point, because it will be painful if the bank turns down your application that has not been thought through and pre-approved beforehand. Your knowledge of the bank fees and tariffs is also important. 

Step 2 – Registration

Once the country is chosen, you need the following practical arrangements for offshore company formation (you can have them as part of our customized turnkey packages):

  • select a company name meeting the norms of the country of incorporation
  • obtain your corporate documents (Certificate of Incorporation, Memorandum and Articles of Association, etc.) 
  • rent the office space or at least a registered address (which some jurisdictions accept as a virtual office)
  • contract a Registered Agent, without whom opening an offshore company will not be possible
  • compile the set of documents to meet the requirements 
  • submit your portfolio for registration at the public Register (via your agent)
  • set up your management team, and if accounting/reporting is required, design the procedures accordingly
  • open a bank account.

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Please note that the pre-approval service is available as part of our turnkey business setup services on opening personal and/or business accounts.

Step 3 – Payments

In some jurisdictions, fees are reasonably cheap, the offshore company registration in other jurisdictions can cost a fortune. Certain fees are charged annually.

The total cost of an offshore company setup depends on the jurisdiction and the scope of services you need:

  • the fixed state duty (a filing fee) is country-specific
  • the fee for the registered agent’s services are country-specific
  • the value of your authorized capital can be quite big 
  • you may need a license (banking, insurance, gambling), which renewal also means regular expenses
  • substance requirements do differ, you may be required to rent a brick-and-mortar office (not just a legal address), hire local employees, open a bank account, etc., or the requirements are minimal.
  • the fees for the agent’s annual report (non-financial) differ across the world
  • courier services are also an item of your cost planning.

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For our more detailed estimation of the total costs of offshore company formation, please refer to our article on the 1st-year costs and the post on the costs of offshore trust foundation

To sum up, offshore company formation is a hallmark of our time. Many business owners venture to set up offshore companies and secure access to many advantages and incentives. The offshore company formation takes time, effort, and can be costly. You need to rely on professional help and hire a Registered Agent. We offer many package services and will be happy to customize our support to your needs.

Does it matter where a company is incorporated?

Yes, the country of incorporation/registration specifies important default rules for legal entities in accordance with the corporate and securities law of that country. Depending on the country of incorporation of the offshore company, there are different levels of privacy maintained for the beneficial owners, different types of business activity are deemed legitimate. For example, in Nevis, you can open a trust connected to an offshore company. This is a way to protect the personal assets while managing the corporation. Curacao allows opening a gambling business under a separate offshore license. And from 2024, the US offshore U.S. states will introduce the beneficial owners’ responsibility to disclose their data. Please note, that your home country’s legislation may oblige you to declare ownership of companies abroad, and different regulations may apply depending on the jurisdiction of incorporation.

Can I register my company abroad?

Yes you can. In some countries, though, the rules and requirements are more transparent, direct and simple than in others. The scope of issues to consider includes citizenship requirements, tax and reporting implications, corporate governance, staffing, languages, and so on. You can start from scratch or consider redomiciliation of your existing company abroad without closing it as a legal entity. However, you will find most flexible requirements and nice incentives in midshore and offshore jurisdictions. A critical nuance, though, is that an offshore company is not supposed to conduct business activities in the country of its incorporation. Instead, it conducts activities from that country, internationally.

Can I register my company offshore?

Yes, as offshore companies are used for legitimate purposes, they need to be registered with the Register of business entities in the jurisdiction of incorporation. You will be required to hire a Registered Agent based and licensed in that offshore jurisdiction to help you with the registration, address, and administrative tasks on your behalf.

Can you incorporate offshore?

Yes, we can provide our customized services in offshore company formation. With our seasoned international experts and partners, you can set up an offshore business with or without a bank account legally, safely, and within a reasonably short period. We will help you with the paperwork. So, you will receive the following set of documents: the Certificate of Incorporation, the Memorandum and Articles of Association, the Resolution on the nomination of the director(s) and the distribution of shares, company share certificates. There are no one-size-fits-all rules of offshore company incorporation. Our seasoned experts are specialized in particular offshore jurisdictions and their requirements.

How do I register an offshore company?

Offshore authorities accept and consider applications ONLY when they are submitted via a Registered Agent. You are welcome to book our consultation and business setup services, so that we could introduce you to the right agent. Besides, our experts can help you compile all the right documents and other arrangements.

How do I incorporate an offshore company?

You should engage trustworthy business setup services. Start with booking a free web-based private Q&A session with our consultant. This will help you focus on your offshore company’s purposes, select a jurisdiction, plan other important issues, avoid mistakes, and save time. Matters like compliance, accounting, filing, and licensing must all be taken seriously, regardless of which offshore jurisdiction you opt for. Our team has been providing services to HNWIs from all over the world for many years.

How long does it take to set up an offshore company?

It takes on the average no less than a couple of weeks. Beware of scammers offering to sell or start for you a bunch of cheap offshore companies! The legitimate and thorough way of offshore company formation cannot be cheap, absolutely effortless, and fast.

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