If you decide you’d like to reduce your tax burden, protect your assets, simplify your company operations or enter into cross border business transactions for example, and you’re interested in whether an offshore company structure could help with any or all of the above, chances are it could.
There are many ways you can use an offshore company, many benefits you can derive from the use of one and many locations in which you can set one up…so how can you decide whether such a structure is applicable to you and how on earth should you decide where to incorporate an offshore company?
What to Use an Offshore Company For
You can use an offshore company if you want to trade internationally or invest offshore. You can use such a structure to buy and hold real estate at home and overseas or to own intellectual property. Additionally you can use such a holding structure for asset protection purposes and for the specific protection of certain asset classes.
If you have staff you need to relocate overseas you can use such a company to employ those staff to maximise any taxation advantages of their international placement. For your overall taxation planning purposes such a structure can be significantly advantageous and finally, if you’re in the eBusiness world or are internet based there are certain significant potential advantages available to you through the use of a properly structured and located offshore company.
Where to Incorporate an Offshore Company
There are hundreds of locations in the world that are considered ‘offshore’ – i.e., low or no taxation jurisdictions – but not all of the nations are secure and not all of the jurisdictions are legitimate therefore you have to be very careful when deciding where to incorporate an offshore company.
Some of the best locations in terms of superiority of regulation and the potential benefits they offer are the British Virgin Islands, Belize, Panama, Gibraltar, Nevis, The Seychelles and even the British Channel Islands but to determine where best suits you please consider the following:-
The tax regime of the jurisdiction
The overall political and economic stability of the nation
The superiority of communications and technology
The spoken language and language of business operation
The basis of the legal system
The jurisdiction’s commitment to protecting an individual’s confidentiality
The exchange controls in place
The offshore jurisdiction’s banking facilities
The costs of company incorporation and ongoing management
Finally, to determine whether an offshore company can benefit you or to get help in selecting the most secure and beneficial jurisdiction it is always wise to take expert advice – after all, if you get it wrong you could lose out financially and in terms of time wasted!