Why establish an offshore company? Learn about the benefits

Why establish an offshore company?

An establish offshore company is an entity whose location is different from the site of primary operations. This simply means an offshore company is established elsewhere from where it is incorporated.

establish offshore company

An offshore company usually engages in various International trades and business activities with clients globally, thus generating considerable revenue every year.

Selecting the correct jurisdiction to establish offshore company is one of the prime aspects to enjoy the benefits. The common advantages of setting up an offshore company are listed below:

1.      Easy incorporation: Offshore companies can be set up within 24-48 hours through simple procedures if all necessary documents are submitted to the concerned authorities well in advance.

2.      Low fees: Many jurisdictions allow minimal fees establishment to promote economic activities in their country- often at 200-300 dollars. Leaving the initial business set-up cost, such an incentive can be particularly beneficial for business owners for generating higher revenues.

3.      Easy management with low reporting requirements: A company may operate with minimum number of directors or stakeholders following a simple management structure.An uncomplicated hierarchical system allows operations to be carried out easily. Also, there is minimal need of regular financial reporting or annual return filing. Thus, there may be less of legal hassles.

4.      Security and Confidentiality: Almost all offshore jurisdictions allow high degree of security for various confidential assets like owner’s details and financial account details. Very less information is available publicly; hence exploitation or theft of sensitive information is uncommon.

5.      Tax Benefits and Exemptions: This is the most lucrative advantage that encourages setting up offshore business. The offshore jurisdictions offer very low corporate taxes like income taxes, sale taxes and value added taxes enabling businesses to make higher profits.

6.      Complete freedom in different investment opportunities: There is absolutely no bar in conducting any kind of business, economic or financial activities. But, some jurisdictions require signing of licensing agreements before company set up.However, all companies should operate in compliance with the state legal laws.

7.      Smooth Relocation Prospects: Many jurisdictions allow hassle free relocation without restructuring or difficult documentation procedures.

8.      Foreign exchange control: Such offshore jurisdictions usually do not possess control over foreign exchange money.

9.      Relaxed local legislation: The local legislative laws are usually relaxed to promote offshore company formation and encourage foreign investments, thus providing the company owners added incentive to invest on their land.

 

Thus, to establish an offshore company may be profitable particularly if an individual is into one of these types of businesses:

·         E-commerce

·         Digital-based

·         Internet services

·         Holding company

·         Stock trading

·         International trading

·         Service company

Advantages of hiring an offshore company formation service

 

There are various firms offering corporate legal advice regarding setting up of offshore companies. Their services cover various aspects like selecting the right jurisdiction for a particular business to educating the owners about the offshore tax benefit policies, proper tax planning and bank account opening guarantee.

These companies usually operate globally giving sound advice on onshore and offshore jurisdiction options available.

They possess complete knowledge of local laws and give appropriate advice depending on the business model and objectives.

Thus, the advantages may be simply listed below as:

1.      Helps in fast-tracking offshore company formation process.

2.      Create awareness among the business owners about the local laws within the jurisdiction.

3.      Update owners about any change of law and educating them about the consequences of not pertaining to them.

4.      Allows easy company formation and maintenance.