For many entrepreneurs starting up their business, the tax advantages and other benefits of choosing to set up an offshore company are appealing. But where are the best countries to set up an offshore company?
What Is An Offshore Company?
An offshore company is an organization 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, as a country that is hospitable to foreign organizations. The offshore company itself cannot however do business with the host country.
Ten Countries Where You Could Open An Offshore Company
Some companies are known as tax havens and have fast incorporation procedures. These traits are important, but investors should also consider geographical location and ease of access to other markets. For more information on the advantages of an offshore company, take a look at our blog post on this subject. Ten countries that are known places to set up an offshore company are:
- Belize: The Belize International Business Company (IBC) is a flexible and advantageous type of company. Namely, no corporate income tax applies and companies are exempt from the stamp duty, capital gains tax and the withholding taxes on dividends.
- Bahamas: The Bahamas IBC is a flexible business structure that can be used for a variety of purposes, including asset protection, estate planning or tax reduction. Similarly to Belize, the company is exempt from all local taxes and can be incorporated by a minimum of one director and one shareholder.
- Cayman Islands: The Cayman Islands have a reputation as one of the premier offshore centres in the world and are neutral from a taxation point of view. There is a wide array of banking options for investors due to the large number of private banks that have set up their branches there. There is no corporate income tax, no withholding taxes, and no capital gains.
- Cyprus: By setting up an offshore company in Cyprus, you could expect to enjoy low corporate tax rates, easy setup, and low maintenance costs in Europe. Its geographical position is one of the country’s most notable advantages as it allows investors to access the European, African and Asian markets. It isn’t known as a tax haven, but Cyprus observes the EU rules and regulations. It has one of the lowest corporate income tax rates in the European Union.
- Dominican Republic: There are no exchange controls and no local taxes for companies. Another desirable trait is that there is no need to disclose the identities of the company directors and shareholders, therefore allowing for a maximum level of anonymity.
- Hong Kong: An offshore company in Hong Kong can be used for a variety of purposes and is one of the top financial centres in the world and an attractive jurisdiction that offers a stable and efficient banking system. The Special Administrative Region is not a tax haven, but it does have a low corporate income tax rate. Company formation in Hong Kong is a simple process and there is no mandatory requirement for a minimum share capital for the limited liability company.
- Singapore: Competing with Hong Kong as the number one financial centre in Asia, Singapore offers a low corporate income tax rate and an advantageous taxation regime as well as simplified business policies.
- British Virgin Islands: The British Virgin Islands, or BVI, are a reputable international offshore destination that is also tax-neutral for locally incorporated companies. There are no requirements to disclose the identities of the company’s beneficial owners and bearer shares are permitted.
- Panama: Company formation in Panama is a simple process and investors can have a high level of banking security and confidentiality. There are low requirements for company management as well as no corporate income taxes. Interestingly, the currency is the U.S. dollar, which is an advantage for investors from the United States.
- Seychelles: There are many benefits to forming an offshore company in the Seychelles. There is no corporate income tax, no capital gains, gift tax or value-added-tax and investors are not required to disclose their identities.
These countries are known to offer low or zero taxes on company profit, light banking and company formation procedures. This adds ease to the idea of performing and managing international operations.
At Paramount, we always recommend that entrepreneurs seek professional advice regarding company formation matters and before deciding where to base their offshore company.
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.