Do you want to buy a ready-made offshore, open a bank account for it and work in peace, enjoying low tax rates and high confidentiality? It is possible.
However, today there are too many illusions that entrepreneurs see before buying it.
What is an offshore company, what are its strengths and weaknesses. And also the main question: how to buy an offshore company and register it in the best way possible. Get ready to learn everything you need to know below.
What is an Offshore Company?
Let’s start by explaining the concept in more detail.
So, an offshore company is a legal entity registered in one of the special zones.
The most attractive feature of such companies is that they do not pay corporate income tax or pay it at a very low rate. They are usually exempt from other local taxes like VAT, sales tax, capital tax, etc.
In most offshore jurisdictions companies are not required to be audited and submit financial statements.
As a rule, ready-made offshore companies are not allowed to perform commercial activities on the territory of the country of registration or with its residents. Often such companies are not allowed to own local real estate or transfer profits to local banks.
In recent years, many jurisdictions have revised their legislation in accordance with the requirements of the FATF and the OECD, which cast doubt on their status as offshore in the classical sense, but remain attractive because of no less significant benefits. Examples of such states: Hong Kong, Great Britain, Cyprus, the Netherlands, about which there is detailed information on our portal.
Is It Legal to Buy an Offshore Company?
It is possible to register a business in a foreign jurisdiction legally — it does not contradict the laws of most developed countries.
If the registration of a company offshore was outside the law, this procedure would not exist in principle. Today such a registration is not a crime.
The only limitations include the improper format of such business activities when a low-tax/no-tax zone is used for money laundering to evade taxes and conceal other illegal activities.
In order to maintain the status of a trustworthy corporation, it will be necessary to prove the industrial and economic feasibility of forming a legal entity of it. Also in some situations it is better to confirm the fact that the corporate exists not only on paper, but in fact.
Advantages of a Ready-Made Offshore Company
But why should you buy or register? Registering a firm is not only legal, but also profitable. By opening a special corporation, you get:
- Access to international markets and the ability to build relationships with foreign partners;
- Reduction of effective tax rate;
- Protection of assets, diversification of risks;
- Confidentiality, both in the absence of obligations to enter data into a public register, and through the nominal service of directors, shareholders;
- The ability to open a corporate remotely, without a personal visit;
- Possibility in some countries to specify but not pay authorized capital;
- To use the business assets for the development of the investment fund, the formation of a holding or trust;
- Ability to use the services of nominee directors.
If you register an offshore firm, the beneficiary can protect its assets, develop a niche in consulting services and international trade.
Today, many countries, including those that are considered high-tax countries, offer favorable conditions for foreign investors.
For example, it is possible to get a zero corporate tax rate for a corporate registered in Canada or the US.
Ready-Made Offshore Company Registration Procedure
An important feature of a ready-made offshore company with a bank account is the high speed of registration. However, it is not a few hours or a few days.
The peculiarity is that the time required for registration consists of several parts:
1. Time for Preparation of Documents.
Collect, certify, send to specialists, make sure there are no mistakes in filled in forms.
2. Registration of the Company
Speed of work depends on the offshore where your corporate is registered. Somewhere it is possible to do it in 1-3 working days, and somewhere it will take a couple of weeks. Remember that the calendar of national and religious holidays is very different around the world. In addition, it is necessary to consider time zones: many popular locations are on the other side of the globe.
And another factor that affects speed — the choice of additional services, which is better to do immediately, so as not to pay for courier delivery from several times. It does not apply directly to the registration for example when you buy an offshore company with a bank account, but it affects the performance of the business. We are talking about the following: nominal service, bank account, office rent, offshore accounting, website creation, staffing, etc. Some things, such as opening a non-resident account, take several weeks.
That is why the issue of time should be discussed with a specialist at the time of choosing territory for the corporation and before the registration of the company.
How to Buy an Offshore Company: Conclusion
Thus, offshore is a powerful tool to protect assets and international business. But today it requires several efforts and attention to activate it safely.
Do not give in to provocations and do not rush to buy offshore companies right away. Study the information, consult with experts and then make a decision.