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An offshore company is usually referred to as a company incorporated for the purpose of doing business outside of its country of registration. This means that such a company can be registered and operated outside the national borders of a person or company. This can be particularly worthwhile when it comes to legal, financial or tax advantages. A company can also legally move abroad to benefit from relaxed regulations, or in other words, to benefit from international laws. This is also the main reason why business people decide to set up a company abroad.
Some of the countries are deliberately making their local business attractive to leverage foreign capital and investment. The well organized and well known worldwide offshore destinations are UK, USA, Belize, Cyprus, Hong Kong, Dominica, Singapore, Seychelles, Panama and St Kitts & Nevis to name a few. Buying a business remotely these days is advantageous and easy to do.
Advantages of offshore companies
There are certain advantages of running an offshore company. For example property protection when a person has a lot of money and can take such an opportunity to protect them from lawsuits and divorce settlements. Another benefit is low taxes. Some jurisdictions are called tax havens due to the level of taxation that depends on the jurisdiction: tax exemptions, flat taxes, 0% capital gains tax, etc. The other advantage is related to international expansion when a company encounters many legal and bureaucratic issues in its homeland. Other benefits include: lower costs of doing business, tax deferral, compounding of deferred tax profits, easy annual reporting, multiple revenue streams, VAT savings on services, and anonymity.
Normally, the benefits to be derived from an offshore company depend on the jurisdiction of the offshore company and to some extent also on the laws of the country of residence of the owner of the company. Because of this, business people need to be mindful of the offshore jurisdiction they choose and take into account the local laws of that country.
Incorporation procedures for offshore companies
There are only a few basic steps that need to be taken to incorporate a company in Hong Kong, Belize, Seychelles or St Kitts & Nevis. Firstly, the costs of the basic services to form a company must be covered, which include a certificate of incorporation, a decision on renting an office and a list of directors (approx. €700). Second, there is an additional fee for privacy; depending on the chosen law firm (approx. 400 €). There is also a fee for opening a bank account with personal presence, which is required to open it for the sake of the businessman's security, a fee for obtaining a logo, rubber stamp, seal, name tag, as well as fees for apostille, virtual offices, etc. A person must provide their personal credit card details and contact information. There is also a mandate to be signed that specifies who has the right to control the opened bank account, add and remove signers and close it. It depends on the articles of association of the company.
Frequently, the above services may also optionally include the formation of international trading companies, the provision of a registered agent, the provision of business management, document preservation and business administration services, governance, equity participation, offshore fund formation, as well as assistance with the licensing of Offshore insurance includes companies and offshore banks, offshore bank account setup, virtual office services and corporate searches. These services can be offered and provided by professionals such as high net worth individuals, private entrepreneurs, professional advisors, accountants and legal advisers working in local businesses of local jurisdictions in Hong Kong, Belize, Seychelles or St Kitts and Nevis etc.