An offshore company is essentially no different from one incorporated in an individual’s own country of residence and can therefore trade, hold assets or investments, have a corporate persona and enjoy limited liability status.
However, unlike companies incorporated in the owner’s home country, or country in which a trade is conducted, an offshore company may confer the following benefits for the owners:
Low taxation – trading profits and dividends can be charged either at low rates of tax or, in certain circumstances, a nominal annual charge. Where the company is engaged in international trade, it can be incorporated in a country where benefits can be claimed under a double taxation agreement therefore reducing or avoiding taxation in the country in which the trade is conducted
Payroll savings – individuals employed by an offshore company, but working elsewhere, may receive remuneration without the deduction of payroll taxes or accounting for employee and employer social security contributions in the jurisdiction of incorporation.
Confidentiality – a higher level of privacy can be met as the disclosures required to be made by an offshore company may be less rigorous. Shares can be held by nominees to enhance confidentiality. Furthermore, if shares are held in a trust the ownership is vested in the trustees and the trust beneficiaries’ details are not disclosed.
Cheaper running costs – often the administrative and reporting requirements in offshore jurisdictions are less bureaucratic meaning that the ongoing costs of running and maintaining a company are lower.
Investment returns – company funds can be invested in offshore banks that typically offer high investment returns paid either free of tax or with a minimal withholding.
Stability – the offshore jurisdictions Calmanx offers are established in politically stable and economically secure locations making them an attractive place to incorporate and ensuring the long-term status of the company.
Exchange control – most offshore jurisdictions do not have exchange control regulations limiting the ability to retain or repatriate foreign currency.
Accordingly, offshore companies and trusts are highly flexible vehicles that can assist individuals in increasing, preserving and protecting their wealth in a low tax environment.
Your individual circumstances will ultimately determine the appropriate jurisdiction for your company. Some of the most common locations include:
- Isle of Man
- Bahamas
- British Virgin Islands
- Gibraltar
- Cyprus
- The Seychelles
