When it comes to the term 'offshore' used in conjunction with
company incorporation, the term 'offshore' generally refers to
any jurisdiction other than one in which the company
incorporated will conduct the majority of its activities.
Usually such a jurisdiction has some degree of taxation or
reporting benefit attached that makes it attractive to the
company owner, and the concept of incorporating a company
offshore will bring at least one of the following five benefits
to a business owner: -
1) Ease of Operations - depending on the jurisdiction and the
type of business activity to be conducted under the company name
to be incorporated, the operating restrictions, auditing and
accounting requirements and standards to which the business and
its employees and directors must adhere are often far less
restrictive offshore than onshore.
Exceptions to this rule are financial services based companies
in many jurisdictions for example, who have to comply with extra
regulatory legislation for the protection of the company's
clientele.
The advantage of easing operations particularly for a small or
start up company is a reduction in operating costs and in the
amount of time a company's directors have to dedicate to form
filling and report filing.
2) Reporting Simplification - this ties in with the first
benefit; in the majority of offshore jurisdictions favoured for
company incorporation the company activity reporting
requirements are often far fewer and simpler as the business
activities entered into by the company are conducted outside of
the jurisdiction in which it is incorporated.
Furthermore personal information relating to the company's
directors and shareholders need not be declared in all cases or
the extent to which personal information is required is far less
intrusive.
3) Taxation Reduction/Negation - the reduction in taxation
liability is one of the main benefits associated with investing
offshore, opening an offshore bank account or incorporating a
company offshore.
If you set up your company in a low or no tax jurisdiction you
could potentially save yourself substantial amounts of money
legally. Often the rules are that if the company incorporated in
a particular jurisdiction never derives an income from the local
economy it can operate tax free.
It's therefore possible to use an offshore company in an overall
international business structure and ensure profits are posted
in the offshore jurisdiction and so no tax is liable! Many
international corporations operate in this way and actually
negate their tax liability fully.
4) Asset Protection - by operating a company offshore, i.e.,
outside the jurisdiction in which the company operates, it is
sometimes possible to position assets away from the reach of any
potential litigious action and also to shield business
transactions from the eyes' of the competition.
5) Personal Privacy Protection - the level to which a director
or shareholder's personal information is required, held, visible
or investigated offshore is likely to be far less invasive and
intrusive than onshore. It is also possible to appoint nominee
directors and secretaries for offshore companies in many
jurisdictions thus keeping the true company owner's identity
shielded.
The information contained in this article cannot constitute
advice. Each individual's circumstances are unique and whether
or not offshore company incorporation is something that could
benefit your business can only be determined with personal
advice.
About the author:
Rhiannon Williamson is a freelance writer whose many articles
about the offshore world have appeared in business and financial
publications around the world. To find out more about Offshore Company Incoporation visit www.ShelterOffshore.com
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