What Are the Advantages of an Offshore Company?

There are multiple potential benefits of forming a properly structured offshore company. In this blog post, we’ll take a look at what an offshore company is and how establishing one can benefit you and your business.

What Is an Offshore Company?

An offshore company is an organisation that has been incorporated outside of its home country. Namely, if your company operates in the UK, then you could establish an offshore company in Belize, a country that is hospitable to foreign organisations. The offshore company itself cannot however do business with the host country.

What Are The Benefits of an Offshore Company?

Why do companies choose to go offshore? Some of the benefits include:

Asset Protection

As an offshore company, you can effectively screen your finances from public view. Placing assets into offshore corporations with overseas legal structures can provide high-level protection from future liabilities. This is because trusts, investments, bank accounts and other assets owned by your offshore company are very difficult to find through asset search.

Legal Protection

Having assets held by your overseas company means they are no longer associated with your name. This means that if someone is pursuing legal action and judgement is awarded against you, your assets are effectively protected. An asset search would be conducted to ensure there is money to pay out, and if they are not something that can be found you are shielded from legal action.

Confidentiality

Most offshore financial centres do not share details of the owners within the offshore company with a third party. The only exceptions tend to be if criminal activity is being investigated.

Enhanced Privacy

In many jurisdictions, the identities of directors and shareholders can be excluded from company documentation as they are not deemed a matter of public record. Individuals with high net worth are at a higher risk of themselves and their families being targeted by criminals, meaning enhanced privacy is a great benefit of an offshore company.

Tax Optimisation

Offshore jurisdictions are ‘tax neutral’. This means that they have low corporate tax rates or companies can be exempt from paying tax in that jurisdiction. If structured and administered properly, a reduction, delay or elimination of the tax burden on a company can be the result. Or it could mean the avoidance of double taxation of the same income.

Growing Your Business

A knock-on effect of lower taxes and operational costs, whilst also adhering to legal requirements, means more cash flow can be used to grow your business. On top of this, you are expanding your global reach.

Low Capital Requirements

Flexibility is often an advantage of offshore company formation through the structuring of the capital of the company. Very low or no minimum paid-up capital requirements are to be expected with an offshore company.

Flexibility

Some of the company laws designed to provide benefits surrounding offshore companies add flexibility. The structure of a company and its capital, alongside meeting locations, annual meeting requirements, and the number and location of directors or shareholders are just some of the factors that become more flexible.

Simplicity

Offshore company formation and maintenance are relatively simple. After the company is formed, an offshore company benefits from a more flexible structure and regulations.

Tax Efficient Jurisdictions

We can incorporate in many different tax-efficient jurisdictions including:

  • BVI
  • Belize
  • Delaware
  • Seychelles

Choosing the most suitable jurisdiction requires careful consideration as there are many factors to consider; such as the political and economic stability of certain locations, statutory compliance requirements, exchange controls and banking facilities. That is why we would recommend you take our professional advice.

If you are looking to gain maximum protection, with minimum tax, then our experts can assist you in setting up your offshore company quickly and efficiently.

If you would like any advice, information or guidance on any types of limited company and their formation, do not hesitate to ask! Call us on 0800 0198 698.

* All timescales are dependent on how busy Companies House/HMRC are and if their system is operating normally.

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