There are many reasons why individuals decide to look for an offshore solution. Whether its because they've decided to internationalize their assets, secure their families future, are looking for a offshore banking alternative, or are pursuing an international business opportunity, there are never a shortage of offshore opportunities.
Similar to on-shore business entities, off-shore company formations reap much of these same benefits, along with some other unique offshore advantages including:
- Strong asset protection clauses
- Low-tax status possibilities
- Little corporate maintenance costs
- Reduced administrative regulations
- Lower capital requirements
- Quick incorporation procedures
- Confidential business operations
- Increased privacy of accounts and assets
- Laws that protect against frivolous lawsuits
Offshore strategies aren't about tax dodging and keeping money from the government, its about harnessing international opportunities that support your business and financial situation. Local laws in jurisdictions other than your own, may provide a more supportive alternative, so why not take advantage of those opportunities.
With the constantly changing nature of the financial and business markets there are always new ways of using offshore structuring as an effective tool in many industries.
Like regular onshore company structuring there are literally limitless ways offshore entities can be used, some of which include:
The offshore market is not merely limited to multi-national conglomerates, but rather can act very similar to traditional onshore business structures. The difference is that offshore companies exist in low-tax low-regulatory environments different from many traditional Western high-tax high-regulatory jurisdictions.
Offshore industries tend to exist in a regulatory system that highly values and protects the rights of the person. While regulations do still exist they support financial markets rather than restrict. Having a legal and corporate environment that encourages financial investment and growth is why countries like the BVI, Bahamas and Panama have hundreds of thousands of registered offshore companies despite their relatively small size.
Importance of a properly structured offshore formation
The Offshore Advantage comes only with a properly arranged offshore formation structure that is ideally spread across multiple jurisdictions using multiple offshore entities. Appropriate structuring, such as pairing a Nevis Company together with a Belize Trust creates a multi-layered arrangement that twice removes the owners name from being personally identified with the assumed assets.
Multi-layered offshore entities are a more recent creation that has been used largely as a response to the changing nature of regulatory practices such as the Controlled Foreign Corporation (CFC) and OECD tax laws that have been enacted by many countries seeking to get individuals to report worldwide income. We are not however, advocating a means to avoid reporting your worldwide income, what we are offering is a space where confidentiality and asset protection is ensured.
To get around many of these meddling pieces of legislation an individual can either find a jurisdiction that has not signed many of these treaties, such as Seychelles or Panama, or pair a Foundation or Trust together with an IBC, together using third-party director nominee services for an added layer of security and protection.
Having two structures in two different locations gives you literally twice the protection as it forces would-be creditors the trouble of having to go through two different regulatory jurisdictions neither of which share tax-information and who do not recognize foreign originating court orders.
Offshore Asset Protection
The heart of any asset protection solution will use different types of corporations, foundations and trusts as a way to insulate the original owner from the assets and make it difficult for a creditor attack your assets. These various types of legal structures separate the different legal entity and separate from an individual. In certain jurisdictions such as Panama, Belize, Nevis and others, laws have been created to enhance the characteristics and features of a corporation to the greatest extent possible (the same also applies to foundations and trusts).
As an example see Panama Corporation for further details on the flexible features of these types of companies, known as International Business Corporations (IBCs), which makes their operation convenient and effortless. So that the entity or entities created do not appear to be an individual’s alter ego, certain minimum standards must be adhered to in the set up of the structure, as well as its operational characteristics. Where applicable this may include the use of nominee directors and third party shareholder solutions. For more information please see Offshore Asset Protection.
Offshore Tax Reduction
The complication starts for most people because they are either a resident in a high-tax country and not able to move to a low/no tax country and do not want to renounce their citizenship. At the same time, they wish to set up a business, invest, or engage in another type of financial activity in a low tax jurisdiction using one or more tax-free structures with the use of an offshore bank or brokerage account to assist in that endeavour.
The problem is that most high-tax jurisdictions want to tax you on your worldwide income regardless of where and how it is earned; there are all forms of policies and pieces of legislation in affect that force you to report your ownership interest in foreign companies and structures, for the purpose of not only taxing that income stream, but to tax it on an accrual basis, even before any of it has been repatriated home.
Proper Offshore structuring using either a International Fiduciary structure or combining and pairing different Foundations and Trusts together with an IBC effectively gives you the advantage of reducing your tax burden as the company or Foundation used to hold your assets can be held by a second IBC which gives you the ability of keeping your assets separate from your household or primary revenue stream. For more information please see Offshore Tax Reduction.
Offshore Business Solutions From Offshore Protection
Join thousands of satisfied clients who have experienced the Offshore-Protection advantage for more than 18 years. When you purchase any offshore company formation product from us, you'll get FREE support from our lawyers to help answer your overseas company day-to-day management questions.