Forming an offshore company has a number of benefits and is a route that many businesses are starting to go down. Offshore company formation is a much simpler and hassle free process than many people first think. Here we’ve listed 5 reasons to form an offshore business.
Easy to do
A popular belief is that forming an offshore company is difficult but this couldn’t be further from the truth. The process is an easy one. Firstly you must choose your jurisdiction. This will be the country in which your offshore business is registered. This jurisdiction will dictate the tax you’ll be paying (if any) and the types of compliance and reporting issues you may face. Secondly, you should decide any additional services you may want such as an international bank account or nominee service which will help you retain anonymity. Then register your offshore company. This requires certain paper work filling out and may be an ideal opportunity to hire some help. Once you have done these things you can start to build your company and reap the benefits gaining from huge tax savings.
No need to move
Another common misconception when forming an offshore company is that you must have a citizenship in the place of jurisdiction. Many people ask “is it necessary to have some sort of physical presence in the chosen jurisdiction?” The beauty of offshore companies is that you may have a business based in the UK, registered in the Seychelles, operating a virtual office in America. There’s no need for you to immigrate or regularly travel to the country to maintain your offshore business.
The majority of offshore jurisdictions have privacy and confidentiality policies that are legendary. They operate under strict rules to ensure that companies are protected. You won’t be required to disclose asset information to the public either. Sometimes as a business owner you want to remain anonymous but it isn’t possible when you are starting the company as a main proprietor, instead you can open the offshore account in the company’s name, securing your privacy.
An offshore company isn’t required to report on their financial activities and can make huge tax savings. It’s important to note though that some offshore jurisdictions do apply tax systems and residents and non-residents may be taxed on their income. Make sure you fully research the jurisdiction you have chosen before registering to ensure that you’re actually able to make tax savings.
Creating an offshore account also means that you’ll be able to create your own virtual office. This means that you can have a professional business address in a prime location. These virtual offices can help with credibility in business so if you live in the UK and have an offshore company in Latvia you’re going to struggle to persuade someone from Australia to do business with you. If however you have a virtual office in Australia for example, you’ll find it easier to work with natives of that country.
These are just some of the benefits which you will be able to take from forming an offshore company. Do remember though that you must create the business correctly as there are pitfalls down which you can fall making your business illegal. Make sure you talk to professionals who can assist in registering your offshore company correctly.