Offshore Company
Formation

Domestic Company or some countries call it a“resident corporation”:

– This is an organization that is created and registered in a specific country in which the company plans to carry out its activities.

– Domestic business operations occur within the geographical boundaries of the country of registration.

– As a rule, the manufacturer of the company and its customers reside in the territory of the same country.

– Trade agreements are based on the laws and regulations of the country of registration.

Advantages of a domestic company

Low transaction costs: A domestic corporation can have low transaction costs from simplified operations, lower fees due to fewer intermediaries, and lower processing costs.

Shorter time between production and sale of goods: Domestic companies have a faster “time to market” as the time between production and sale of goods is reduced and can lead to increased sales, consumer saturation and potentially increased profits due to faster response to demand and no inventory costs.

Easier Market Analysis:  It is easier for a domestic company to understand and define its domestic target market and to forecast customer preferences, which is less time-consuming, since it is more familiar with the products, the competition, and thus can more easily define its own market niche.

Communication: Speaking the same language and understanding the culture of your country makes it easier to communicate with consumers.

Preserving personal wealth: Domestic company allows separating personal assets from company assets, thereby limiting the personal liability of the owners.

Prestige and credibility: Doing business in the country of its registration increases the credibility of the enterprise, demonstrating long-term stability and compliance with the law. Such companies are more attractive to investors, clients and partners.

Tax advantages: Domestic corporations often take advantage of tax incentives and deductions established by government authorities and subject to certain criteria.

Employee Benefits and Rewards: Such incentives may include, for example, expenses incurred in running a business, benefits and compensation for employees such as medical insurance, pension packages, life insurance policies, etc.

Access to government contracting opportunities: Domestic companies are given the opportunity to have access to government contracts so that they can take advantage of incentives or certain programs.

Utilizes Local Networks: Domestic corporations can use chambers of commerce, industry associations and mentoring programs as support.

Streamlined Reporting: Typically, a firm must adhere to one local set of rules for accountability, comply with local tax rules, and thus incur fewer regulatory costs.

Global Operations: A domestic company is subject to statutory taxes in its home country. However, if a domestic company expands its international presence and receives foreign-source income, it may also be subject to taxes in its home country, subject to tax treaties and foreign tax incentives that can reduce the potential for double taxation.

Offshore company:

– The term “offshore” itself means located or situated outside the borders of the home country.

– An offshore company usually involves registering a company outside of its national boundaries. This definition also applies and is used in the banking and financial sectors.

– An offshore company that has been registered in another country is obliged to comply with its principles and laws, which also apply to the participants of the company: directors, shareholders, members, partners and owners.

– A classic offshores usually include island states where companies and individuals create foreign banks, corporations, trading, gaming, insurance companies, investments and deposits, trusts, foundations and holding companies. Registration of yachts, ships and aircraft in offshore countries is also very popular.

– The transition of companies and individuals to offshore is usually associated with more favorable conditions that include tax optimization, tax savings, protection and confidentiality of the company structure, easing of rules and asset protection from lawsuits, other privileges established by offshore jurisdictions or they may want to take advantage of foreign business opportunities.

Why do such jurisdictions exist?

Classic offshore countries usually establish such advantages due to the fact that this is one of their sources of income due to the collection of registration fees and duties from registration agents who directly carry out the formation of such organizations.

Offshore countries have created unique legislation for the registration of offshore companies and attracting foreigners to keep capital outside their countries. Some offshore countries, such as Bulgaria, Nevis, have established such legal provisions for LLC companies that allow protecting assets stored inside the company from seizure as a result of lawsuits and legal proceedings.

Currently, the EU or FATF monitors compliance by offshore countries with tax transparency and cooperation standards and can add an offshore country to the blacklist of international organizations. Such countries can also be blacklisted for non-compliance and shortcomings in the fight against money laundering, terrorist financing and financing the proliferation of weapons of mass destruction.

In order to avoid being blacklisted, offshore jurisdictions have begun to improve and supplement their legislation and consider international requirements. Innovations in the legislation of offshore jurisdictions are important for maintaining a good reputation, preventing international sanctions and complying with international standards.

But every rule has its exceptions. Over time, offshore zones with enormous risks have emerged. They gradually found themselves on the “black lists” of leading banks and came under the close attention of regulators. That is why, when choosing a new jurisdiction, it is important to choose safe countries with loyal legislation. This is especially true during periods of instability in the global economy and the promotion of deoffshorization policies

So far, such attempts have led to little, but offshore companies are changing one way or another. For now, they still remain “safe havens” for businesses of any level. Here you can still avoid paying extortionate taxes, tedious litigation and unnecessary publicity.

In addition to these advantages, business owners when registering offshore do not have to worry about their companies being classified as unreliable. And this is often decisive when working in international markets!

Are there any tax haven countries in Europe?

There are no classic offshore zones in Europe, but there are countries with favorable tax conditions, we can describe them as tax haven countries.

Let’s first understand what “tax havens” are in Europe. Tax havens are generally considered to be European jurisdictions that have low or zero tax rates, privacy laws, and in some cases, minimal financial reporting.

Thus, such jurisdictions become attractive to individuals and companies that seek to reduce their tax liabilities from their income.

Foreign individuals and companies, having registered their company in such a jurisdiction, have the right to use favorable tax advantages without conducting their significant business activities in the country where the company is registered.

The popularity of these jurisdictions is expressed in the fact that they follow European and international established rules and obligations and at the same time provide financial benefits to foreign enterprises.

When registering a company in European tax havens, it is important to understand that, despite the fact that tax optimization is legal in the territory of the company’s registration, tax evasion is still illegal if the income received is not included in the reporting in their countries of residence, thereby violating international tax legislation.

Failure to comply with international tax legislation and failure to provide this information in the reporting at the place of residence is tax evasion, which entails legal consequences and may damage the reputation.

International legislation currently requires increased transparency in tax matters, which has affected the reduction of confidentiality in European tax havens.

Europe’s Best Tax Havens

Below are the most popular countries where you can take advantage of both zero taxation and a minimum tax rate with the possibility of obtaining an investment visa and citizenship.

– Andorra, Spain

– Bulgaria

– Campione, Italy

– Cyprus

– Ireland

– Isle of Man,

– Gibraltar

– Guernsey

– Hungary

– Jersey

– Liechtenstein

– Luxembourg

– Liberland

– Malta

– Monaco

– Monaco, France

– Netherlands

– San Marino, Italy

– Switzerland

– United Kingdom

Offshore companies can provide an additional level of protection and privacy:

• protection from lawsuits, creditors and government seizure.
• protected by strict privacy laws, making it difficult for creditors or litigants to seize these assets.
• protection of assets such as intellectual property, real estate and other investments.
• prohibition of disclosure of information relating to the owners, directors and shareholders of the company.

Asset protection in offshore companies refers to the use of legal methods under a foreign jurisdiction to hedge assets against domestic risks.

The best type of company and country that has laws that strictly protect offshore assets is the registration of a Trust in offshore jurisdictions such as the Cook Islands, Nevis and Belize. All these countries are politically stable and their legislation provides reliable asset protection.

The confidentiality of information about the beneficiaries and the trust is guaranteed by the Trustee, who is obliged to act in the interests of the beneficiaries and, accordingly, maintain confidentiality.

Advantages from an Offshore Company include:
Tax saving. Low tax benefits or tax avoidance.
Asset protection. Separating your assets from you as an individual.
Privacy. offshore corporate structure it separates you from your business as well as assets and liabilities.
High Confidentiality. In many offshore countries few or no records have to be maintained publicly.
Flexible and favourable corporate legislation. Simplified corporate laws, auditing and financial reporting requirements.
Perception of your business. The impression that you have an overseas business.
Owning property. Property ownership may include tax savings: inheritance tax, income tax, capital gains tax etc.
Broader range of investments. freedom to invest anywhere they like whether it be in any economic, financial or business activity. 
Lower labour cost. Reduce or eliminate the cost of recruitment.
Better banking infrastructure. there are still many banks that are welcoming offshore companies.
Low maintenance cost.
Low capital requirements for offshore business.
Access to Tax Treaties.

Attempts to denigrate offshore companies are constantly being made. The media and other information sources call them oases for illegal businesses that have earned capital through fraud and evading taxes. Such statements are difficult to refute due to the confidentiality of companies registered in offshore zones. But someone believes them without evidence.

In fact, owning an offshore company is not illegal. But only if the business registration is carried out according to all the rules. Here it is better to seek the help of specialists who will help you avoid mistakes and check all documents.

The following forms of companies are most often registered in offshore companies:

• LLC (Limited Liability Company);
• LTD (Limited Company);
• IBC (International Business Company).

The process of deoffshorization inevitably introduces changes to the existing rules of jurisdictions. If previously it was possible to use a minimum package of documents to register a business and get a guarantee of 100% anonymity, now everything has become much more complicated.

To obtain maximum economic benefits from offshore, business owners often must comply with tax reporting requirements, undergo a financial audit, etc.

This allows you to receive full protection of capital and identity, tax benefits, security from foreign courts, access to international markets, etc.

These restrictions and current sanctions make it difficult to register offshore companies, but do not make the procedure impossible.

Main types of Offshore Companies:

IBC – International Business Company also known as Business Company (BC)

LLC – Limited Liability CompanyLLP – Limited Liability Partnership

PLC – Public Limited Company (Pte. LTD)

LTD – Private Limited Company

Company Limited by Guarantee – a Guarantee Company (whose members’ liability is limited by a guarantee)

LDC – Limited Duration Company (a company with a short life cycle)

Unlimited Company – a company with unlimited liability

LP – Limited Partnership

Offshore Trust – to be the strongest offshore structures in the world

Offshore Foundation

Offshore holding company – offshore holding companies are usually set up to passively hold shares in the assets of another company. Although an offshore holding company can be used for a variety of purposes, it is most often not intended to be an active business entity as it is most often used to hold shares in its subsidiaries.

Offshore Trust – to be the most powerful offshore structure in the world. An offshore trust is an estate planning tool that provides individual legal jurisdiction outside of one’s own jurisdiction by creating a trust in another country. The assets are then transferred offshore and placed under the management of trustees and other estate plan managers.

Offshore shipping company. This type of registration is applicable to ship owners, boat owners, yacht owners or sailboat owners. The Offshore Ship Registry allows ships to trade internationally without taxation as their sole territory and does not impose taxes on the income of ships engaged in international shipping or trade. The main activity of most of these vessels is logistics support and transportation of goods.

Offshore trading company (export-import operations). A reseller can register an offshore company for trading, distribution or import-export business activities. The company typically purchases goods directly from a manufacturer or wholesaler and arranges for the goods to be shipped directly to the end consumer from the point of production or purchase. The  advantages of an offshore trasding company include tax advantages, data protection and confidentiality, legal protection, and asset protection.

Offshore professional services company.  The term “offshore” indicates that the service provider is located in a country far from its client. This type of company is popular due to its cost-effectiveness. For example, companies located in Europe, Canada and the United States outsource services to BPO firms located in the Philippines, India, Malaysia, and other countries to reduce labor costs and operating costs. In addition to saving money, businesses use offshore service companies to gain access to qualified specialists, technology and resources to improve services.

Offshore intellectual property company (intellectual property ownership, licensing, franchising). An offshore intellectual property company is usually created in an offshore jurisdiction with zero or minimal taxation in order to reduce income from trading companies or businesses trading in industrialized or high-tax countries.

An offshore intellectual property company is the ideal driver for the administration and management of licenses and intellectual property, including computer software, technical know-how, patents, copyrights and trademarks.

Offshore Recruitment Outsourcing Company (RPO). Offshore Recruitment Company is also known as offshore recruitment. An offshore company recruits candidates from other countries in order to find candidates with a certain set of skills, professionalism, that method allows the search for candidates to be expanded outside the recruiting region, and in addition, this method allows for cost savings.

The main benefit of offshore outsourcing is the opportunity to save money. Suppliers with overseas operations often charge less than domestic third parties to perform the same tasks due to lower labor costs.

Offshore finance company. This type of company is mainly used to register foreign banks, corporations, investments and deposits. Some of the benefits of having offshore finance company is tax savings, asset protection and privacy.

An Offshore foundation is a legal entity and created under civil law and registered in outside of the founder’s country of residence.
A Foundation can open a bank account and provide business activities outside of the country where the entity is registered.

The Foundation term:
There is a document call a Charter which includes wishes of the Founder, who establish the entity. The Founder can be a person or a company.

There is the Foundation councel who acts behalf of the company according to the Charter.
There can be a Beneficiary or few Beneficiaries for whom the foundation is created.
There are also can be appointed Guardian or Protectors who control the Foundation cancel activities according to legislation and Terms and conditions of the Charter.

IBC – An International Business Company is a type of offshore company incorporated under the laws of some jurisdictions as a tax-neutral entity that is subject to zero or minimal tax. An IBC is usually limited in terms of the activities it can carry out in the jurisdiction in which it is incorporated.

IBC is a private company designed for use in international commercial activities such as trade and non-local services, offshore banking, investment, as well as for asset protection.

The IBC structure:

• owned by shareholders, minimum 1 shareholder is required
• controlled by directors, minimum 1 director is required
• some jurisdictions require a company secretary

Features:

• Exemption from local taxation
• Confidentiality
• Powers to engage in different business activities
• Ability to issue shares (registered or bearer shares)
• Limited by shares
• Must have local registered agent
• Must have local registered address
• Financial Report is not required to submit to local tax authority

LLC – An offshore limited liability company is a legal entity incorporate in offshore country. Most popular countries for such type of companies are Belize, Nevis, Panama, St Vincent, Cook Islands. LLC is owned by members and controlled by managers.

The LLC structure:

• owned by members, minimum 1 member is required
• controlled by managers, minimum 1 manager is required
• some jurisdictions require a company secretary

Features:

• Members protection from lawsuits or debts
• Taxation is passed onto the members rather than the entity itself
• Assets protection
• Possibility of accumulating assets overseas avoiding capital gains tax
• Confidentiality in offshore countries
• Powers to engage in different business activities
• Limited liability to shareholders
• Must have local registered agent
• Must have local registered address
• Financial Report is not required to submit to local tax authority in offshore countries

An offshore trust is an ordinary trust registered in accordance with the laws of an offshore jurisdiction. Typically, offshore trusts involve the transfer (or “settlement”) of assets (“trust property”) by the settlor to trustees to be administered for the benefit of a person, class or groups of persons (“beneficiaries”).

What is the main advantage of an International Offshore Trust?
– the trust reliably hides information about the true owner of the property, and on completely legal grounds. According to the trust agreement, access to information through the trustee can be obtained in strictly defined situations only by representatives of the judiciary and law enforcement agencies. That is, in the normal course of events, even the state will not learn absolutely anything about the founder of the trust and his property.

– for the duration of the ILO, the trustee of the trust becomes the formal owner, which means that the one who transferred the property to trust management (the founder) will not be able to confiscate, requisition or seize creditors.

– this is a good tax planning tool, with the help of which you can quite legally avoid paying property tax in the country of permanent residence of the founder or beneficiary.

For some, relocating a company to an offshore location does not pose any difficulties, but for most entrepreneurs this procedure raises many questions. To fill this information gap, company formation agency will guide you step-by-step to register a business in countries with laws that are friendly to foreign capital.

The number of offshore zones is so large that not even all experts know the features of each. When choosing a jurisdiction, you should first consider the goals pursued by the investor or entrepreneur. For example, some people need a one-time deal, while others are interested in ongoing business.

Currently, in most offshore countries you can open a company that will allow you to operate on favorable terms. It is first necessary to analyse this area in the context of a specific area of ​​activity. Here are some useful tips that will certainly be useful to the vast majority of businessmen:

Owners of start-ups in the field of finance are better off choosing an offshore company in the UK, Luxembourg or Ireland.

Those wishing to establish trade relations with China can recommend Singapore or Hong Kong.

If you want maximum asset protection, you should choose Belize or Nevis.

Vanuatu and Saint Lucia are suitable for opening an offshore bank.

Companies registered in the Caribbean Islands, Costa Rica and Panama will be able to organize their activities in the US market best.

For obtaining gambling licenses, it is ideal to choose Curacao and Costa Rica.

The most famous asset protection structure used is the offshore Trust, which is considered the most powerful offshore structure in the world, as it is strictly regulated by the strongest corporate laws, which make it incredibly difficult to break into the trust structure.

The best offshore trust jurisdictions are:

• Cook Islands.
• Nevis.
• Belize.
• Luxembourg.
• Cayman Islands.
• British Virgin Islands.
• Jersey.

Each offshore zone has its own specific legislation. We can highlight the main advantages of the most popular jurisdictions:

Great Britain: Loyal taxation, Easy registration, Using a nominee service, Many treaties to avoid double taxation, Prestige, Low probability of political upheaval, No tax on dividends.

Curacao: Ability to access exempt status, No restrictions on capital repatriation, Zero tax on financial gains,Low risks of taxation of profits, Lack of exchange controls.

Hong Kong: Optimal conditions for acquisitions and mergers of companies, Maximum security of information about beneficiaries, capital amounts, transactions, etc., Ideal jurisdiction for an initial public offering, No taxes on profits earned outside the state.

Vanuatu and Saint Lucia: Lack of audit and financial reporting, Simple and inexpensive company registration, High level of confidentiality, Maximum loyalty of legislation to foreign business, Belonging to the OECD white list, No taxation.

USA: Reduced tax obligations in a number of states (Delaware, Washington and others), Possibility of reducing the tax base by creating an LLC, Keeping the identity of the founders secret (not relevant for all states).

Nevis: Good asset protection, Quick business registration (no more than a week)

Availability of tax benefits, including for corporate income and capital gains,

We mentioned only a short list of benefits, there are many other features for each jurisdiction.

Also, you need to choose an offshore company that is suitable for your finances. The cost of registration will depend on the jurisdiction itself and the opportunities provided (Substance). In some courtiers you can become the official owner of a company for little money. In others, this will require several thousand dollars and a substantial authorized capital.

For some companies, a license is required. And you should consider how realistic it is to formalize it in the chosen jurisdiction. For example, when opening a bookmaker’s office, you will need a gambling license.

To summarize, registering an offshore company will in any case require certain costs. With skilful planning and knowledge of the characteristics of different jurisdictions, financial losses can be kept to a minimum.

Registering an offshore company is very simple, as it is handled by a registered agent or lawyer.

The process begins with the provision of KYC documents for the company’s beneficiary, shareholders and directors.

The purpose of KYC rules is to prevent the use of trust companies and lawyers by criminal elements, ensures reliable client identification, establishment of trust and compliance with regulatory requirements for a comprehensive security perimeter

What information and documents are required to register a legal entity.

• You need to decide on an Appropriate Offshore Jurisdiction.
• Choosing a Company Structure: IBC/BC, LTD, LLC. LLP, LP, Trust etc.
• Chose the Company Name.
• Provide a company structure: Directors/Shareholders/Secretary.
• Provide details of the company’s proposed business activities.
• Provide documents of Beneficial Owner /Directors /Shareholders.

KYC documents Know Your Customer (KYC) document refers to official documentation such as passport, utility bill, which can verify the identity and address of the customer. Requesting and verifying KYC documents is a mandatory part of customer due diligence for legal entities.

-A certified copy of passport;

-A certified copy of a document proving residential address;

-Source of Funds / Source of wealth.

The above list of documents in some countries is not exhaustive as their legislation may require additional documents or information

• Most overseas jurisdictions make registration easy for everyone. The statutory obligations to manage an offshore organization have also been simplified.
• An offshore company must have a registered address in the country of incorporation, usually this is the registered agent’s address.
• Every year the company must undergo renewal and pay an annual fee for the registered address, for the registered agent and the Registrar’s fee.
• If the structure of directors and shareholders has changed, it is necessary to make changes officially and documented.

• An offshore company is legitimate and can open business accounts in any country. Our company offers not only the registration of an offshore company, but also the opening of a bank account, which makes it easier for the owner to find a reliable bank. We are introducer of many banks from different countries and thus opening an account is much faster and without additional delays.

Corporate or Business Bank Account

• Corporate banking usually refers to services used by larger businesses with higher turnover.
• Business banking usually refers to services used by small companies, including individual entrepreneurs.

• Before you start the process of registering your business in an offshore country, we recommend that you study and understand all of the pros and cons of an offshore company.
• It is very important to draw up a business plan and strategy for your offshore company.
• These are the most important points that you need to familiarise yourself with offshore.