Business

Setting Up Businesses Offshore: Hold My Beer

It is not without a reason that setting up offshore companies has become not just a fad but a necessity in the brand new world of today. By default, offshore companies operate in overseas markets instead of conducting business in their home jurisdiction. The above strategy is useful to win access to favorable taxation terms offshore and thus make global expansion and trading less tricky. 

In spite of an urban legend claiming offshore companies to be illegal entities and their activities outside of the scope of law, it is perfectly legal to incorporate them. Provided your company isn’t involved in tax fraud or money laundering schemes, you will enjoy healthy profits combined with beneficial business and taxation terms as an offshore company founder. To do everything by the book, be sure to study offshore company incorporation basics and consult industry wizards well aware of all specifics involved here

At International Wealth, we do our best for those looking to set up a successful offshore business to reach their goal. Supported by our seasoned team, you will easily select the offshore jurisdiction matching your needs and aspirations to a tee. Beware, that to incorporate a company in a popular offshore jurisdiction, you should follow an established regulatory procedure:

  • cherry-pick an offshore jurisdiction that would be the best fit for your goals and objectives
  • register an offshore company in full compliance with local laws
  • set up a bank account in the chosen offshore jurisdiction
  • make sure you stay compliant and all laws and regulations are followed.

By doing the above you can be sure you’ll seamlessly set up a promising offshore business in next to no time. 

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1.Off we go – select a suitable offshore jurisdiction

When considering where to set up your future offshore company, keep in mind that not all that glitters is gold. In an offshore context, it basically means setting up an offshore business in a tax-exempt or zero-tax jurisdiction is not the same as establishing a company in an offshore haven. The latter are frowned upon by the European Union and the Organization for Economic Cooperation and Development that tend to include offshore havens into their gray and even blacklists.  Mauritius, the Cayman Islands, and the Seychelles are among the examples of such well-known offshore jurisdictions. When setting up a company therein, you are highly likely to encounter tough scrutiny combined with low credibility on the part of tax agencies, banks, and clients alike. As opposed to traditional tax havens, legally tax-exempt or zero-tax jurisdictions come with zero tax rates or no company tax, tougher reporting requirements, and higher credibility to promote your potential business deals. Companies established in tax-exempt or zero-tax jurisdictions enjoy an opportunity to engage in a variety of business activities, from investing to import and export.

2.On we go – select a business structure and set up your offshore company

Offshore businesses fall into partnerships, corporations, foreign offices, and sole proprietorships.

Out of those, sole proprietorships and partnerships are the easiest to establish, yet no limited liability is available in their case. Same applies to foreign offices that are also limited in the types of business activities they may carry out. For this very reason, investors favor a PLC (private limited company, that is a corporation in its nature). This is a smart and reasoned choice, considering PLCs face no incorporation issues, offer liability protection, and come with easy-to-follow succession rules and procedures.

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Depending on the offshore jurisdiction you choose, you may encounter additional incorporation requirements. Below, the typical ones are listed:

company name reservation

You are required to carry out a name search for your company and reserve the one you selected with the Company Registrar.

  • appointment of nominee directors, secretaries, and shareholders

Although requirements therefor vary with each particular jurisdiction, you will have to prepare and execute corresponding agreements with each of the above employees to guarantee smooth company operation.

  • legal address selection

To ensure trouble-free correspondence exchange, you will require a local and virtual office in the offshore jurisdiction of choice.

  • paid-up share capital

Be sure to stay in line with the legislative requirements for the paid-up capital of your offshore company.

  • accompanying documents

Here belong Articles of Association together with Memorandum of Association, your company’s business plan, and the like company documents.

Depending on the incorporation jurisdiction, you may also have to appoint a management company, select a registered agent or a corporate service provider for your offshore business. 

3.Going forward – set up a corporate bank account with an offshore bank for your business

Opening offshore bank accounts might be a challenge. Yet, assisted by our worldly-wise consultants and lawyers, you will seamlessly set up an offshore bank account in the jurisdiction of choice. Remote account opening is also an option, be sure to ask your consultant about it. With a multi-currency bank account offshore, your business will enjoy multiple payment options and face no issues with international transactions. 

4.For the finale – make sure you meet all compliance requirements

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To create a business that runs seamlessly, you should be certain that all reporting, accounting, and tax liabilities are met on time. Requirements therefor vary with each offshore jurisdiction and to be on the safe side and take a load off your mind, we recommend you entrust all accounting and reporting issues to a trusted service provider. Our team is here for you 24/7 should you need assistance with document preparation and/or report submission. This way, you will rest assured the business operates legally and is fully compliant with relevant legislative requirements in your offshore jurisdiction.

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