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Offshore Company

How to Start an Offshore Corporation

Are you tired of seeing your hard-earned business and investment income being taken by greedy politicians that don’t value your success?

Sadly, bankrupt governments have waged a war on success and rolled up the welcome mat for business. It’s as if they’re doing you a favor letting you create jobs and build wealth in their country. If you believe this is wrong, then setting up an offshore company is a legal and effective way to protect yourself.

The reality is that companies like Apple, Google, Microsoft, and Starbucks use offshore companies to save a lot of money and grow their business on their own terms. Fortunately, you don’t have to have billions to apply the same principles for yourself.

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Discover how to set up a business structure that
provides security and minimizes taxes.

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Like many aspects of going offshore, Googling “offshore company” won’t necessarily return the information you’re looking for. Not only does each type of business have specific needs that are served by specific solutions, but many of the service providers you’ll find are simply ill-informed or outright frauds.

If you believe that an offshore company is all about hiding money and evading taxes, you couldn’t be more wrong. There are 100% legal, legitimate strategies that international business owners and investors can use to reduce costs and grow their business.

As we always say here, you ought to “go where you’re treated best”. A country that taxes a large part of your company’s earnings just for being there isn’t a country that respects your accomplishments. Why pay a fortune in taxes and comply with endless regulations in a country that believes “you didn’t build that”?

 

How does starting an offshore business really work?

All too often the image of the offshore company industry is one of money laundering, gangsters, drug money, and villains wearing white linen suits that are never stained by the cognac they always seem to be drinking.

This couldn’t be further from reality (although your particular cognac consumption may vary) as offshore companies are simply entities that people create in order to legally take advantage of the global tax market.

Reasons why you may start an offshore company include:

  • Protecting assets from impending litigation
  • Shifting the tax burden imposed upon the company
  • Protecting the company from political unrest and economic instability within the country of the owners

This is how intelligent business owners choose to protect their hard work, protect their shareholders and maximize the potential profits of their business. These businesses can be a perfect fit for offshore strategies:

  • E-commerce or web based businesses
  • International businesses
  • Wills and inheritance
  • Stock brokers and forex traders
  • Holding property
  • Intellectual property rights
  • Counsellors and consultants
  • Business people

Online businesses in particular are an excellent fit for offshore business because they can operate anywhere. With an offshore business, you can process payments in one country, host your website in another, keep accounting records in another, and pay minimal tax in another.

For digital nomads and location independent entrepreneurs who earn money while traveling or living overseas, there is no need to incorporate in your home country and subject yourself to the litany of paperwork and taxes that come with doing so.

Meanwhile, inflation or hyperinflation in your home country can make your money worth much less quickly. Having an offshore company with an offshore bank account can get you around this issue so your business assets are well insulated.

If you own a patent or trade mark, registering it in the name of an offshore company can allow you to buy and sell these rights. Having these registered under an offshore company also makes it easier to grant these rights to third parties.

What type of offshore company should I set up?

There are five basic types of offshore companies that you can set up:

  • IBC – International Business Company
  • PLC – Private Limited Company
  • LLC – Limited Liability Company
  • GBC – Global Business Company
  • SÀRL – Société à responsabilité limitée (French) or Sociedade anónima de responsabilidade limitada (Portuguese)

Each type has its own unique strengths and appropriate uses. Some are only available in certain offshore jurisdictions. We cover them in greater detail in our free guide on How to Start an Offshore Company.

GET OUR FREE OFFSHORE COMPANY GUIDE


Discover how to set up a business structure that
provides security and minimizes taxes.

Download Now!

What are the best countries for an offshore company?

The best place for setting up an offshore company depends on your goals. One company might do alright setting up in a country with no accounting or audit requirements and zero tax.

A slightly larger, more diverse company might be better off going to Hong Kong or Singapore and paying a small amount of tax to gain access to more world-class banking, financial opportunities, and merchant services.

A company seeking to raise or pool capital might go somewhere else entirely.

Common traditional offshore jurisdictions include Nevis, Seychelles, Mauritius, the British Virgin Islands, the Cayman Islands, Antigua, Anguilla, and even the Gambia in Africa.

Other low-tax jurisdictions popular for offshore business include territories like Gibraltar, as well as low-tax European countries like Ireland, Malta, and even “zero tax” Estonia. In Asia, places like Hong Kong and Singapore offer the potential for zero or single-digit tax rates for foreign businesses, as well as a network of global tax treaties.

Meanwhile, the Middle East is growing as an offshore hub, with Dubai and Bahrain offering their services to those interested in that region.

The reality is that it can often be a good idea to pay a little bit of tax if doing so keeps your home country off your back. As the global war on tax havens heats up, setting up your business in a respected jurisdiction may be the best strategy for you. In some cases, it may not even cost any more to do so.

GET OUR FREE OFFSHORE COMPANY GUIDE


Discover how to set up a business structure that
provides security and minimizes taxes.

Download Now!

Tax implications with offshore corporations

In general, part of going offshore is about reducing or eliminating your tax burden. Having the right team in place to manage your business once it is setup is important to make sure you are in compliance and making the most of all tax benefits.

Some higher level offshore jurisdictions will require you to file annual accounts showing your transaction history. These include Hong Kong, Singapore, Cyprus, and Gibraltar.

Many traditional offshore jurisdictions may require you to keep books on your own, but don’t require you to file them. Whether you have to file reports or pay tax offshore or not, you should keep in mind that the country you are a citizen or resident of may require you to declare your interest in any offshore company.

Remember, going offshore is about saving money and protecting assets legally, not hiding away or evading taxes.

Offshore company requirements for US citizens

The US government has some tight restrictions on offshore companies. The biggest advantage for an offshore company and taxes is the concept of tax deferment. This essentially means that you can defer the taxes that are to be imposed upon your company indefinitely.

With your taxes deferred you can take that money and reinvest it in your company. When you combine this tax deferment with compounding interest, you’re talking about significant capital accumulation over the years. You’ll only have to pay these taxes off once you sell the company.

If you have been deferring taxes for a number of years, and using those funds to either continue to build your business or invest otherwise, you will be coming out far ahead of those who choose to not start an offshore company.

As a US citizen, however, you will be required to disclose any interest in an offshore business you have on your taxes each year. You will also be required to report any offshore bank accounts you are an owner of or signer on in most cases. Failure to comply with these rules in the US or any other western country that requires them can lead to steep penalties.

How to get started setting up an offshore company?

Searching the internet, the process of starting your offshore company seems so easy. There are any number of providers that compete to offer the lowest price. These are not the people you want to work with.

Sure, if you’re an African warlord, by all means use these services. If flouting the law and avoiding sound legal and tax advice is something you frequently do, the lowest priced provider will get you set up. (Hopefully; there are also plenty of scams.)

While the process of offshore incorporation itself is straightforward and can be done in a matter of minutes in some countries, laying the proper groundwork before and after the official process is important. This also means consulting with a provider who understands the rules and regulations in your home country, which most so-called lawyers on some deserted island have no idea how to handle.

The best thing you can do is choose the right representative and even overpay a little.

Once your company is approved and set up, the next step is to open a bank account and possibly an offshore merchant account. Depending on where your company is incorporated, your nationality, and where you want to bank, you may or may not need to travel to the bank in person.

Of course, the most important first step is to simply take action. The sooner you get your business set up, the sooner you can enjoy the benefits. The best way to get started right now is to download our free guide, How to Start an Offshore Company.

This guide answers:

  • Is starting an offshore company legal?
  • How much does it cost to start an offshore company?
  • Which jurisdiction is best for my specific business?
  • What are nominee shareholders and directors, and should I use them?
  • What are bearer shares and are they legal?

… and more.

GET OUR FREE OFFSHORE COMPANY GUIDE


Discover how to set up a business structure that
provides security and minimizes taxes.

Download Now!

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