There are people who feel sceptical about an offshore company as they don't understand how it works. There are reasons why companies like Apple and Google are using offshore companies as part of their equations in tax planning. We will explore these benefits now.
6 Major Benefits of having an Offshore Company
- Minimising Tax Burden;
- Assets Protection;
- Minimal Administration;
- Low Cost;
- Low Capital Requirement.
Minimising Tax Burden
Individuals set up offshore companies to achieve certain objectives. There are individuals who use offshore companies to minimise their tax in their own country. However, there are conditions to abide. We are not talking about bringing the money into your homeland and don't pay any tax at all. Certainly, if the gains that you made in overseas under these offshore vehicles mustn't be sent back to your country, technically you don't need to pay tax. In this case, the offshore companies will serve as a wealth accumulator vehicle to put your gains that you made in overseas. There are also a group of offshore jurisdictions that require the offshore companies to pay some tax. As long as these jurisdictions have DTAs with your home country, you may be able to remit back your gains back to your home country if you follow some steps.
In most of the offshore jurisdictions, the public has no access to the information of the shareholders or the directors. There are some countries which reveal the shareholders or the directors of the companies upon request and the public may have access to the financial background of the companies as well. In current society, privacy is no longer an entitlement, it is a privilege. So confidentially has become a hot commodity to many of us. In modern days, we heard from reporters who bought banking transactions detail of politicians and attempted to topple the government. This confidential information will only be revealed if criminal or terrorist activities have taken place.
Many of the business with potential in the world failed because of the inability to segregate their assets and liabilities. So what does that got to do with your business? In the event, if your liabilities overwhelmed your assets, it may be too late to react. Have you ever thought of segregating your risky assets with your core business? Offshore CorpServe, an offshore corporate service provider, is committed to help you in restructuring your company. We specialise in assisting companies to establish the correct structure to protect their stable assets and minimise their tax burden.
The value of any company can be categorised into 2 distinctive parts. Firstly, it is the earning ability. This can be a case for companies that have activities which generate profit through providing goods or services. The second part is the assets of a company. This is the case for companies which are holding on to assets like properties, financial instruments or commodities mines. Their profits are derived from buying and selling of these assets. Offshore companies are ideal candidates to put in such assets if the jurisdictions are tax-free. At the same time, transactions in all these assets may incur additional transaction fees. So the best way to transact maybe to sell the whole offshore company to the new buyer. In the event, if the only shareholder has a pending lawsuit, the offshore companies will usually be the one that can be transferred out before the shareholder is hit with a bankruptcy order. Certainly, a Trust structure, in this case, may work more effectively than an offshore company. But at least things can move faster than those companies do not belong to the offshore jurisdictions.
In those countries that are not tax-free in particular, filing for annual return is a requirement. The tax haven jurisdictions will be an easy way out for many individuals if they want to minimise this burden as well as there is no need to file an annual return.
The accounting fee and auditor fee will be a yearly affair for those non-tax free companies. The bigger the company, the higher the fees. As for the offshore companies, the only fee that is payable is the renewal fee every year which is a relatively small percentage of the accounting and auditing fees.
Low Capital Requirement
The advantage of an individual who registered for an offshore company is the registered agent is unlikely to ask if he has put in the paid-up capital in most of the cases. To many offshore company's owners, they may not have put in capital in the company. It is not a requirement.