Offshore businesses can help both companies and individuals save money, whether they are performing typical company activities or simply investing overseas.
International Business Companies (or IBCs) are one vehicle for offshore business formation, along with private companies, limited liability companies, partnerships and trusts. Many investors choose to form an IBC because they are exempt from local taxation laws and offer complete confidentiality.
Privacy in offshore trading and investing is very important to many people and completely legal. The beneficial owner of the company is not revealed to the public nor to government officials. Since the owner’s identity remains anonymous, he is protected against lawsuits related to divorce, business, or controversial ventures, such as online pharmacies or casinos. Many medical practitioners seek offshore businesses to protect themselves personally against potential lawsuits. Additionally, in some jurisdictions which require a public record of the owner, it is possible to name a nominee so that your private information remains private.
Online business formation is often used by large corporations to save money in taxes. Google, for instance, only paid a 2.4 percent corporate tax rate for 2010 through the use of a shell company in the Netherlands combined with an offshore business in the jurisdiction of Bermuda. Other technology companies, such as Apple, IBM, and Microsoft, reported tax rates between 4.5 percent and 25.8 percent.
Offshore financial centers are located in jurisdictions across the world, including Antigua, Anguilla, the British Virgin Islands, the Bahamas, Belize, Gibraltar, Nevis and Seychelles.
In most financial centers, you are not permitted to perform any trading or investing within the jurisdiction. However, you can perform any financial or business activities with outside countries. You will pay much lower taxes – or even none at all – as compared with your home country. This enables investors to trade stocks or invest with a maximum return on investment.
Forming an offshore business is not that difficult. Although outside assistance is often required, most individuals find that it does not require as much paperwork as they anticipated. Additionally, the yearly paperwork and meeting requirements for the business are not near what is required in their home country.
In some cases, one can purchase a shelf company, which has already been created and registered. It is then shelved until it is purchased. This lessens wait time for formation as well as enabling an individual to purchase a mature company. However, shelf companies are more expensive and often not needed for individuals simply wishing to trade or invest overseas.
Speaking with an agent in offshore business formation and investing is a wise decision. Governments change laws and policies continuously, and an agent will be knowledgeable on the latest information about each jurisdiction and vehicle available to you.
Discuss with your agent your goals in order to best decide which vehicle would suit your needs, be it an IBC, private company, or some other choice. Next, you can review various jurisdiction rules. Different jurisdictions are better for different vehicles. Your agent will be able to lead you to the best choice for your needs.
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