Offshore formation results in and offshore corporation and this can be done in many countries called offshore jurisdictions around the world. Offshore formation can be completed for International Business Companies (IBCs) or offshore corporations, offshore trusts, offshore foundations, offshore Limited Liability Companies among others. Offshore formation is done in the following tax havens: Panama, Anguilla, Dominica, Seychelles, Hong Kong, Singapore, Belize, British Virgin Islands, St Kitts, Nevis, Dubai and the Bahamas among others. Offshore companies formation has many benefits which includes the reduction in tax liabilities as well as asset protection.
Offshore Formation entails a process which is not very costly and time consuming. Offshore formation is completed in one working day on many offshore jurisdictions whilst in other the process can take up to two (2) weeks. Offshore formation results in a business company which has many similarities with an ordinary business company. The process for offshore formation is similar to that followed for the incorporation of an ordinary company. For offshore company formation a Memorandum of Association and Articles of must be completed and submitted to the Registrar of Companies for inspection and a Certificate of Incorporation will be issued if all the requirements are met.
For offshore company formation Articles of Association and Memorandum of Association with the following information must be listed:
- The proposed name of the offshore company
- The name and address of the registered agent
- The registered address of the company
- The authorized share capital of the company
- The currency in which the offshore company’s share capital will be issued
- The number of shares to be issued
- The classes of shares to be issued
- The rights, privileges, restrictions, voting powers and limitations placed on each class of shares
- The objectives for forming the offshore company
- The names and addresses of the shareholders of the company
- The names and addresses of the company directors
- The by-laws of the company
For offshore formation in most offshore jurisdiction a registered agent is needed for incorporation.
The major difference between an offshore company formation and an ordinary or onshore company is the tax benefits which the offshore formation eventually ends up with. Offshore companies are incorporated in offshore jurisdictions and these countries offers tax exemptions to offshore company which vary in the jurisdictions.
Tax exemptions for offshore corporations can start at zero taxes and go up to the low rate of 20% taxes on a corporation’s net profit. Many offshore havens imposes no local taxes ( income tax, corporate tax, capital gains tax, withholding tax) on offshore companies who have no business operations within the jurisdiction of formation whilst ordinary companies are subjected to local forms of taxations. Offshore companies are exempted from stamp duty and only have to pay a registration and annual license fee. Tax exemptions for offshore companies are guaranteed by legislation in the offshore jurisdictions.
Offshore company formation results in privacy for offshore companies. Information regarding offshore companies and offshore shareholders are not made public records in the jurisdictions. For offshore company formation the use of nominee shareholders and nominee directors are encouraged by some offshore jurisdictions. This results in added privacy for offshore companies shareholders. Asset protection is also another advantage of offshore formation. All assets in offshore companies are protected by laws of the jurisdiction of formation making assets safe from foreign court rulings and creditors.
Offshore company formation is affordable and the benefit which it presents surpasses those of an ordinary business company. Offshore companies make very good trading companies and are acceptable globally. Offshore formation is the way to go for persons who are keen on tax planning and asset protection.