Why You Should Start an Offshore Company and How You Can Do It

Some entrepreneurs still preserve the old erroneous attitude to offshore business. They associate it with money laundering and tax evasion. They mistakenly believe that an offshore company can serve illegal purposes only and it can bring nothing but problems to the owner. Such an attitude disallows the entrepreneurs to make use of the advantages that an offshore company can bring in reality. These include tax breaks, access to new markets, asset protection, and many more.  

As a matter of fact, an offshore company is a company domiciled in a foreign country, not in the country of the owner’s legal and tax residence. That is it. Many offshore jurisdictions are politically stable countries that offer attractive tax incentives and advanced business infrastructures to foreign entrepreneurs. An offshore company is a legal business structure and if you set it up in a proper manner, you have a good chance to increase your profits significantly. 

Offshore Business

How can you register an offshore company or buy a ready-made one? What offshore jurisdiction should you choose in 2023? What offshore schemes are 100% legal?

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Why do you need an offshore company?

An offshore company can bring two most important advantages. These are tax reliefs and geographical extension of your business operations. In addition, you can use an offshore company for several other purposes. An offshore company, trust, or holding can help achieve the following goals:

  • Business legalization. There are countries where Forex trade, brokerage, fund and trust establishment, gambling, and private financial services are prohibited. There are offshore jurisdictions where these types of business activities are legally allowed.
  • Asset protection. You can protect your personal, family, or corporate assets by transferring them offshore. The transfer does not have to be illegal at all! Setting up an offshore investment trust or a business company, purchasing real property, ships, yachts, and so on – all these things can be done in a lawful manner.
  • Inheritance planning. It can be especially important to plan your inheritance wisely if you have multiple heirs to your property. A will is a simple document to draw up but an offshore inheritance trust can do some things that a will cannot. Please find out if you should use a will or a trust to hand down property to next generations.
  • Asset diversification. You can use offshore companies to diversify your portfolio. You can open offshore bank accounts and participate in international investment projects thus protecting yourself from economic fluctuations and sanction-related risks.

An offshore company can be an efficient business instrument if you are prepared to fly to a distant place on a regular basis and work diligently towards achieving your goals. An offshore company is a company owned by a non-resident of the country where the company is registered. The non-resident status can bring numerous privileges to the company owner including tax benefits.

We would like to make an important note at this point. Finding a zero-tax jurisdiction to register a company there has become a highly challenging task these days. Confidentiality of offshore company ownership is an opportunity that is totally unavailable now. Well, you can try to conceal the name of the company’s UBO from the bank but then banking services will be denied to you, which will render your offshore company useless. Even suspicions of any falsifications will make the bank turn down your application for services.

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Act wisely when setting up a bank account for your offshore company! Use our PRE-APPROVAL service by sending inquiries to several banks and other financial institutions before you apply for banking services.

Popular offshore schemes that are legal in 2023

Let us clarify what offshore companies can be used for and what benefits they can bring to the founders and beneficial owners. 

Export-import operations via an offshore company

A great number of international trading companies (those who buy goods in one country and sell them in another) use offshore-registered companies to lessen their tax burdens.

As we have noted above, you can hardly pay nothing in taxes if you register an offshore company. However, some serious tax reliefs are still available in many offshore jurisdictions. If your onshore company performs export-import operations, it is taxed in accordance with the onshore country’s fiscal regulations. If the company that is registered in an offshore jurisdiction performs export-import operations, it is taxed at the rates applied in the offshore jurisdiction. And these rates are going to be lower than those in your home country in all likelihood.

This is one of the most popular uses of offshore companies. Because your taxable base becomes lower, you can sell your goods at lower prices, which will make your trading company more competitive.

You have to bear in mind, however, that many countries have CFC rules and other regulations aimed at attracting more tax revenues from international business companies. You certainly have to look deep into these issues and apply for professional assistance in the matter. Economizing on taxes by going offshore is possible but the task is not so simple.

An offshore business structure to hold real property

If you have real estate in several countries, you can put it in the name of the offshore company or the offshore trust that you have established. This maneuver will help you save on taxes and protect the confidentiality of the real property owner. 

In addition to that, you can use an offshore company or trust to invest in international development programs. The world has become much more mobile (especially in light of the current events) and many people are relocating to other countries and buying/ renting residential accommodations there. The construction industry is on the rise and the developers in different parts of the globe are making record-breaking profits today.

A financial offshore company

Some offshore jurisdictions are referred to as financial centers because various types of companies that are registered there provide various kinds of financial services. You can register a financial company of one of the following types in an offshore jurisdiction:

  • An offshore bank. You will need to obtain a banking license before you can open an offshore bank but it is possible.  
  • An international offshore company that issues stock, participates in company groups, and hands its assets in trust thus obtaining profits from the investments and enjoying tax breaks.
  • An offshore insurance company.
  • An offshore trust or foundation. There are some schemes that can help you protect your property in the most efficient manner, safeguard your privacy, and simultaneously let you save on taxes. An irrevocable offshore trust can serve as an example of such a scheme. These schemes are highly complicated and it is challenging to set one up but they are perfectly legal. So, if you are prepared to work diligently on examining how this scheme works, it can bring you considerable benefits. 
  • Asset management and protection. Wealthy individuals and enterprises from countries with weak economies and fragile banking systems often transfer their capitals abroad. They normally choose the well-trodden routes to offshore jurisdictions that allow efficiently protecting their assets.
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If you set up a trust and an LLC in Nevis, you will have a very powerful combination to protect your assets from creditors and foreign courts of law.

Advantages and disadvantages of registering an offshore company 

As we have noted above, some people don’t understand the benefits that an offshore company can bring. Others, on the contrary, underestimate the risks involved in creating and using an offshore company. Registering a business structure offshore has both pros and contras.

Advantages of an offshore company

  1. An offshore company allows lessening your tax burden. An offshore trust is totally tax-exempt. Thus, you can increase your profits without violating any laws.
  2. You can enter new national markets and attract new international business partners with an offshore company.
  3. The process of offshore company registration is fast and simple. The requirements to the company founders, directors, and the registered capital and minimal.
  4. You can manage your offshore company via a nominee, a trusted agent, or a local professional director. As far as the annual shareholders’ meetings are concerned, many offshore jurisdictions do not require that the meetings be held in the country of the company’s incorporation. This does not apply, however, to companies working in the business areas where a license is required nor to the companies engaged in business locally (in the country of the company’s incorporation).  
  5. Banking privacy remains one of the top priorities for offshore banks and companies. At the same time, you have to handle the issue of opening a corporate bank account for your offshore company with great care. 
  6. Multiple organizational structures are available to those wishing to establish an offshore company. You can set up a limited liability company, a public company, a partnership, a trust, a foundation, and so on. There are also opportunities for grouping and merging several companies. You can fine-tune your offshore business structure in a way that suits you best.  
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If you want your offshore assets to be safe, we recommend that you should open a foreign bank account with professional assistance.

Disadvantages of offshore companies

Besides numerous pluses, offshore companies have some minuses too:

  1. Some offshore jurisdictions face reputational issues. International regulators such as FATF and OECD, for example, compile black and gray lists of uncooperative countries and they monitor and pressure these countries zealously. You should avoid registering a company in a blacklisted jurisdiction, as there are other options available. Many offshore zones have left the black lists now and it’s perfectly safe to register companies there.
  2. If you do not examine all the terms and conditions as well as all the relevant legal documents with great care, you might end up facing some liabilities that you didn’t expect. It would be wise to choose a jurisdiction with a stable company registration-related legislation. When a law changes, it seldom changes for the better. You should also find out what your home country’s legislation says about controlled foreign corporations. It might happen that you will be unable to save much on taxes by registering an offshore company due to your home country’s regulations.
  3. Because of the reputational issues mentioned above, some banks in onshore jurisdictions will not cooperate with offshore-registered entities. You should bear this fact in mind and ascertain that your offshore company is going to have the desirable banking opportunities before you initiate the company registration process.
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Please consult our specialists to avoid multiple traps and pitfalls that await you on the way to offshore company formation. You are welcome to contact us at any time and we will get back to you shortly.

Where can you start an offshore company? Offshore zones and their specifics

There are many countries and territories where you can register an offshore, that is, a non-residential company. The choice of the country will depend on the kind of foreign business structure that you would like to have.

For instance, you cannot find protection from foreign court rulings if you set up a company in the USA, Great Britain, Switzerland, and many other countries. If you would like to obtain a financial service license, a Forex license, or if you are planning to engage in crypto business, make an ICO, etc., you’d better give an eye to such jurisdictions as Belize, Labuan, Curacao, Hong Kong, the BVI, and the like.

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Please read about the license types that you can obtain in offshore jurisdictions.

Countries where you can gain tax advantages

Low-tax jurisdictions. Foreign entrepreneurs can find attractive tax conditions in some states of the USA as well as England, Scotland, Cyprus, and some Caribbean countries.  

Long-standing offshore jurisdictions. There are countries and territories where foreign business operations are not taxed at all. The level of the company owners’ confidentiality protection is also very high there. These countries include Nevis, Belize, the Cook Islands, Mauritius, and some others.

European offshore zones. You can incorporate a company in some European countries with practically no risks at all. You can also become a tax resident there and pay the local taxes. These countries include Switzerland, Great Britain, Estonia, Italy, Portugal, and others.

Mid-shore Asian countries. Territories like Hong Kong, Taiwan, and Singapore have some characteristics of offshore countries and some characteristics of onshore countries. You can find some serious tax incentives if you register an offshore company in one of these countries and territories.

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Please find out how you can start an offshore company in the Caribbean, Europe, Asia or North America by contacting our experts. Below please find links to a few ready-made service packages.


Answers to some FAQ

Below please find the answers to some questions that our clients frequently ask us when planning to register offshore companies.

How can I go into offshore business?

You are going to need an intermediary (a licensed agent) in the country of your company incorporation in most cases. Such is the legal requirement found in many offshore countries. Besides, you certainly need professional assistance in choosing the best place to register an offshore company.

The procedure contains the following steps:

  • Define your priorities and main goals.
  • Choose the country of company incorporation and form of ownership.
  • Prepare the incorporation documents.
  • Open a corporate bank account.
  • Solve the administrative issues.

You can run into various obstacles at every stage of the company incorporation process. The chances for losing some money are also going to be rather high if you try to form an offshore company without anybody’s assistance.

Can I buy a ready-made offshore company?

Yes, you can, and many international entrepreneurs choose to buy shelf companies rather than set up new ones. To avoid mischief, you should choose the intermediary carefully and check the company that you are buying for its history. We will be happy to help you make the best choice if you would like to buy a ready-made offshore company.  

Do I have to visit the country of the company incorporation?

Not necessarily. However, a personal visit to the country may be required to open a corporate bank account. At the same time, you can also issue a Power of Attorney and have a trusted agent open the bank account on your behalf.

Is offshore business legal?

Yes, offshore business is legal. If you view an offshore company as an instrument for laundering money, then your views are a bit outdated. An offshore company is a company located in a country that is different from the country of its founder’s legal and/ or tax residence.

How you can start an offshore company in a safe manner

You may have heard different opinions about the security, legality, and desirability of offshore business structures. We would like to stress again that offshore business is legal and safe unless you want to register a company in a blacklisted country.

Even if you do, you will still have a legal company. Problems are going to arise when you apply for banking services: you are going to have a hard time obtaining them. Finding international business partners who would agree to cooperate with you is also going to be problematic.

You should apply for professional assistance in setting up an offshore company, trust, holding, or another sort of business structure to avoid the potential obstacles and losses. We have been helping people to go offshore for years and we are knowledgeable about all the ins and outs of the industry. Please write to info@offshore-pro.info to request a consultation from our experts. 

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Offshore business can bring a number of weighty benefits if you understand how it works. Our team will be delighted to assist you in setting up an offshore company and opening a corporate bank account in the jurisdiction of your choice. If we are unable to open a bank account for you in a certain country, we will openly say so in advance.  

What is offshore business?

Offshore business is business done outside the country of the business owner’s residence and citizenship. An offshore company can take your business venture to the international level, help you save on taxes, and protect your assets. Offshore business is perfectly legal as long as you engage in legal business activities.

Is it legal to use offshore schemes?

It depends on what you mean by ‘offshore schemes’. If you are thinking of tax evasion and money laundering instruments, of course, they are illegal. However, there are some countries that offer important perks that cannot be found in your home country. If that is what you mean, offshore schemes are as legal as onshore schemes.

How can I open a bank account for my offshore company?

Setting up a corporate bank account for an offshore-registered company can be a challenging task indeed. Large onshore banks are reluctant to provide services to companies registered in ‘dubious’ jurisdictions, those that have reputational issues. If you start a foreign company in a reputable jurisdiction and want to open a corporate bank account in another country, you will be asked ‘Why do you want to have an account here?’ anyway. The simplest working solution would be to set up a bank account in the same country where your company is incorporated.

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