The Definitive Guide to Setting Up Offshore Companies
Due to their convenient location and tax benefits, offshore companies appeal to entrepreneurs worldwide. No matter where you live, you can set up your business overseas and save millions in taxes without breaking the law. Here is everything you should know about starting an offshore company!
So you’ve been in business for a while or you’re getting started. Have you decided where you’re going to start your company? Did you know that where you set up your business can save you money?
Yes, you read that right. You could save millions only by setting up your business overseas. Have you heard about offshore companies?
If this is the first time you hear about it, get ready to become familiar with the term. Want to learn if offshore company setup is right for you?
We’ve you covered. We’ll tell you all there’s to know about offshore businesses and how you can set up your own. Read on to learn more!
Offshore Companies: Everything You Need to Know
Before we tell you how to set up your offshore company, we’ll go over the basics. What is an offshore company? Is it legal?
An offshore company is an entity that’s registered in a country different from where it has its offices. Also, the jurisdiction may be different from the principal’s residence. Yes, it’s legal to have an offshore company.
The offshore company structure helps your business work in an open borders kind of way. Because it gives your company a global reach. Having an offshore company doesn’t put limits on who you can do business with.
It depends on the business you’re running but, that’s a huge added value. The offshore company setup skyrockets growth for many companies. Some examples are offshore mooring chains manufacturers and online based businesses.
Benefits of Having an Offshore Corporation
Having an offshore company has more benefits than taking it to the international stage. Here the major benefits of having your own offshore business:
One of the benefits of setting up an offshore company is that it helps you keep your business private. Many jurisdictions make public the records of registered companies. You won’t have to worry about that when you set up an offshore corporation.
Many offshore centers don’t make public information like ownership, financials, and operations. This makes offshore businesses ideal for entrepreneurs looking to keep their transactions private. At the end of the day, you don’t want your competitors to steal your idea or property.
Minimal Maintenance Requirements
If you’ve registered businesses before, you know that you’ll have to meet many filing requirements. Not meeting these requirements can translate into fines and getting into trouble. You won’t have to worry about this if you have an offshore company.
Most offshore jurisdictions don’t have annual or financial reports requirements. Many of them have 2 basic maintenance requirements. You’ve to maintain a local registered agent and pay your annual license fee.
Potential Reduction of Your Taxes
Tax savings is the most known benefit of offshore businesses. When you own an offshore company, you might be eligible for major tax savings. Because tax havens impose little to no tax liabilities on income and capital gains.
It will all come down to where you register your company. But, you aren’t off the hook that fast.
Also, the tax laws and your country’s tax of residence will determine your tax liabilities. It’s recommended you consult a tax professional for more information.
Asset and Lawsuit Protection
Many offshore jurisdictions have strict clauses that protect your offshore company assets. Also, this protection extends to frivolous lawsuits. Many wealthy people take advantage of this benefit to protect their assets.
An example of asset and lawsuit protection is how expensive it’s in Nevis to sue a company. To sue a company in this jurisdiction, you would’ve to hire a Nevis attorney and post a bond of $25,000 minimum. That makes Nevis one of the best options for asset protection.
How to Set up Your Own Offshore Company
Setting up an offshore corporation isn’t as difficult as it might sound. The process is simple when you register in a tax haven. It will all start with your research and your business needs.
Here are the basic steps to set up your own offshore company in no time:
1. Choose the Right Jurisdiction for Your Business
Not all jurisdictions work the same way. That’s why you’ve to research what country fits your offshore business needs. Some jurisdictions have a more complex process and requirements.
But, their benefits might be worth the headache. An example is how Hong Kong has an annual audit requirement. This might not be a huge deal for you.
Yet, for some businesses, it means too much work. Countries like Singapore offer benefits such as residency and citizenship.
This might be a great advantage for your business. At the end of the day, you’ve to look for the jurisdiction that meets your business needs.
2. Incorporate Your Offshore Company
Once you decide what jurisdiction, you’ll incorporate your offshore company. Before registering, you should consult an attorney to make sure you’re meeting the requirements.
Some recommend you hire a local attorney or representative to complete the process. You could consider hiring an international law firm that has offices at the jurisdiction you chose. That’s a great way to oversee the process from start to finish.
3. Set up Your Bank Accounts and Assets
After you set up your offshore company, you can set up your bank and credit card accounts. Some countries like Switzerland allow you to open your accounts in other countries. Where you open your accounts will depend on where you registered and your country of operations.
If you want to minimize the taxing at your country of operations, it might be a more complex process. This happens when you want to lower your taxes in the United States.
You might’ve to open a corporation and accounts in your country of operations. Having both an offshore and local company can help you balance your taxes and billing operations.
Your local corporation will take care of your local expenses, payroll and rent. While your offshore company will handle your billing to lower your taxes. A tax specialist can help you navigate this process.
Is an Offshore Company Right for You?
Yes, setting up an offshore company can be right for you. Offshore companies are a great way to earn tax savings while keeping confidentiality. It will all come down to the type of business you’re conducting.
It’s recommended you consult an attorney and tax specialist to find out if it’s right for you. Want to know why a lawyer can help you setup your offshore corporation?
Check out our article to learn more.