Best Countries To Set Up An Offshore Company For Tax Reduction
- Last updated on . Written by Offshore Protection.
What are the Best Low Tax Offshore Countries to Move Your Business?
Many countries offer tax benefits like tax exemption or reduction in offshore environments that give advantages and incentives, including privacy and confidentiality, minimal reporting and compliance requirements, asset protection trusts, and currency flexibility, to foreign entrepreneurs, investors and business owners looking to internationalize business operations.
While there is no single BEST country for an offshore company setup, there are certain characteristics that make offshore environments more suitable for international business company formation.
We have chosen three corporate structures in traditional offshore jurisdictions that have some of the world's best offshore formation environments, together with two corporate structures located in modern onshore financial centres.
While onshore financial centres are largely overlooked as being low tax jurisdictions, they can offer very similar corporate structures similar to those found in the Caribbean or Pacific Islands.
Here are a few countries that are some of the best jurisdictions today for your offshore company formation.
Table of Contents:
- What are the Best Low Tax Offshore Countries to Move Your Business?
- Best Countries
- 1. Panama
- 2. Nevis
- 3. Cook Islands
- 4. Scotland
- 5. United Kingdom
An Offshore Panama Corporation is one of the world's best offshore formation companies. It offers structures at very reasonable prices, without compromising on services. Panama still has favorable offshore banking policies despite a tighter regulatory environment that is still open to non-residents, though it is more difficult to open an offshore bank account for Americans and if you do not already have a Panama IBC.
A Panamanian Corporation requires no audit, no financial account preparation, no capital gains tax, nor is there any local corporate taxation and can be formed by a single director who can be a citizen of any country.
The registration process is straightforward though it may take an extra week or two due to due diligence practices which are currently enforced in Panama. Panama has had to enact KYC requirements due to international pressure the last few years. This has helped to clean up Panama's image and has helped the country root out laundered money.
A Panama offshore company is one of the world's best due to its liberal structuring practices and minimal requirements that have made it an offshore structure hard to compete with.
Go here for more info on Panama as an offshore tax haven.
A Nevis Limited Liability Company (LLC) is a strong pass-through taxation entity structure that taxes individuals separately as members rather than as a single entity. An Offshore LLC is a strong liability corporate structure that can be used for a variety of investment and joint collaborations. As members, it can be governed by one or any number of individuals who are shielded legally with limited liability.
There are great hindrances that prevent creditors from the pursuance of claims. In order for a foreign court to go after assets held in an LLC a USD 100,000 bond must be filed prior to submitting the legal case.
There is a statute of limitations of two years, and a creditor must have evidence beyond a reasonable doubt that a member of the entity transferred assets to the company specifically with the intention to defraud the specific creditor.
Nevis has very strong privacy and confidentiality regulations. Client names and personal details of company members not available to the public nor foreign entities unless it is apart of a criminal investigation.
Nevis has very secretive banking codes, whereby they do not reveal any information even to this day. Even the corporate registry of Nevis does not know the directors and members of the company's that are incorporated. The Nevisian Premier stated, "We feel very strongly that people are entitled to some semblance of financial privacy," and therefore due there best to ensure the offshore structures are ironclad.
Despite the trend toward greater global banking transparency, it seems Nevis is one of the last to hold out.
Go here for more information on Nevis as an offshore tax haven.
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3. Cook Islands
Cook Islands LLC
The Cook Islands LLC is perhaps one of the strongest asset protection vehicles today. The Cook Islands is most recognized for their asset protection Trust which stands to be the strongest offshore structures in the world due to their corporate laws that make breaking into the structure incredibly difficult.
The LLC is a hybrid between a corporation and a Limited Partnership that protects the members of the structure from the debts incurred from the company.
There are strong asset protection provisions anchored within the corporate legislation. Section 45.6-13 prevents foreign court orders from being recognized and makes any lawsuit or charges brought against the assets to be placed on the individual rather than the LLC.
A Cook Islands LLC has flexible structures with minimal reporting requirements and maximum protection of client identity.
Go here for more information on the Cook Islands as an offshore tax haven.
Many countries around the world offer different types of corporate structures for non-resident individuals and corporations to attract foreign capital and businesses to the country. Though typically classified as being modern financial centres they can take on offshore tax haven characteristics. Scotland and the UK
Scotland Limited Partnership (LP) is perhaps one of Europe's leading offshore company structures. Though it is relatively unknown in comparison with its rival UK LLP structure or other popular jurisdictions such as Cyprus or Malta, this has played to its benefit as it has largely been able to maintain its liberal financial policies and banking environment.
The limited partnership must be formed by two or more members, one being the general and the other the limited partner. An SLP is allowed to go into contracts and take on debts and acts as a separate legal entity.
The structure is tax neutral or tax transparent whereby taxation is on the individual level rather than the SLP itself.
There are zero corporate taxes nor any requirements to submit any financial accounts, which makes it a very competitive EU based structure.
The company's organizational structure is well recognized around the world. Scotland being part of the UK is not generally considered a tax haven and so has been able to escape many negative associations. Though it acts very similar like many other traditional offshore company entities, an SLP exists in a modern 'onshore' environment and enjoys the benefits that come with being apart of both worlds.
Go here for more information on Scotland as a tax haven.
5. United Kingdom
The United Kingdom though it is a modern financial onshore centre offers many advantages for foreign investors, non-resident individuals, and international business companies looking to incorporate in the UK.
There are several different types of structures that can be used, however, the UK LLP is perhaps the most versatile as it allows for many members to exist with liability, to form collaborative business and investment possibilities with pass-through structure keeping members free from taxation on foreign earned income.
The UK benefits from having a premier international reputation as well as access to numerous European trade agreements and Double Taxation Treaties (DTT) with countries around the world.
The UK is a world-class modern financial centre that simultaneously allows for low-tax corporate structures giving you both the advantages of an offshore tax haven while being in a modern environment.
Go here for more information on the UK as a tax haven.
Whatever your choice for going offshore there is likely to be a country that suits your specific needs and circumstances. There is no one size fits all solution, there are many countries in the world that offshore attractive offshore advantages to form a business. See what country is right for you.