Offshore Company Incorporation
The processes called offshore company incorporation, offshore company registration, offshore enterprise construction, like Panama company formation, refer to the same principle. Individuals or groups create offshore companies through this legal process.
What is an offshore company? An offshore company is a preferential business entity used to engage in international business and banking activities. An offshore company essentially contains all the features and characteristics of domestic companies, but benefit from tax exemptions and other fiscal advantages as they are formed and registered in offshore territories. Offshore companies also benefit from efficient asset protection, enhanced confidentiality and greater tax planning opportunities if compared to local companies.
Offshore company incorporation is a standard service offered by several hundred international offshore territories or jurisdictions. The business of offshore company incorporation is lucrative business, providing a viable source of revenue for the jurisdictions. Money is generated from annual incorporation and maintenance fees paid by offshore corporation.
Some of the highly regarded jurisdictions for offshore incorporation are Anguilla, Bahamas, Belize, Bermuda, the British Virgin Islands, the Cayman Islands, Dominica, Mauritius, Panama, St Kitts/Nevis and the Seychelles. These offshore territories known for:
- political, economic and financial stability;
- the progressive and investor friendly offshore climate;
- no tax or lower tax schedules;
- Strong supporting enterprise construction, comparable to Belize companies formation, laws;
- international recognition and global acceptance of companies by other businesses and banks
Offshore companies incorporated in such jurisdictions benefit from a wide range of offshore products, not limited to offshore companies nut includes, offshore trust, offshore foundations; and professional offshore services, same day incorporation, shelf companies.
In general, a registered agent carries out the process for offshore company registration and offshore company incorporation. This standard practice facilitates efficient, speedy and regulated incorporation processes saving time and money. The process of offshore company registration is straightforward, plus there is no requirement for the owner of the offshore company to physically visit the offshore territory. The agent does the filing of the documents containing company information.
The main company incorporation documents are the Memorandum and Articles of Association/Incorporation. The Articles of Association/Incorporation are the agreed rules and laws by which the offshore company will operate. The incorporation documents contain only the very basic information on the owners, the agent and the company. The information contained in the Memorandum is determined by the category of offshore entity selected. The data requirements for Limited Liability Companies are not the same as that for Companies limited by shares or guarantee, or partnerships. The following data may be required in the company’s incorporation documents:
- the name of the offshore company;
- the name and address of the registered agent;
- the registered address of the company;
- the state/type of company
- the names, addresses and nationalities of the executives
- the nature of business
A name must be chosen for the offshore company but must be a name that is unique to the jurisdiction. The offshore company name must not be affiliated with any government or educational institution.
In the majority of offshore territories, offshore company formation requires one (1) shareholder and one (1) director to incorporate. As the laws also permit the shareholder to be a director, essentially just one entity is need for offshore company formation to take place. The person can be a natural person or a corporate body (company).
There are exceptions on the incorporation requirements, for example, in Panama there must be a minimum of three (3) directors on the offshore company incorporation documents. Some offshore jurisdictions do not allow corporations to act as shareholders and company directors. And where some jurisdictions require a corporate secretary, others don’t’. Bottom line, before engaging in offshore company incorporation, some research on the jurisdictions and the company offshore registration is essential.
In some offshore jurisdictions, the offshore company can only engage in business activity outside the jurisdiction where incorporated, but there are a few offshore jurisdictions which allow offshore companies to carry out business within the country itself. In those cases, there really is no distinction between on shore or offshore company incorporations, and the companies are governed by same laws, and have the same tax treatment.
The offshore company incorporation has many benefits. Offshore companies are incorporated in tax havens, this means: the offshore companies will pay no taxes or very low taxes on incomes and their derivatives such as interest, capital gains, profit and dividends. This applies to revenue that is generated outside of the jurisdiction.
Further, most of the offshore territories do not local income tax, capital gains tax, inheritance tax, withholding tax on such income.
Confidentiality is also a benefit received by offshore company incorporation, since the names of the beneficial owners of offshore companies is not a public record. Offshore company registration can be finalized in one to two (1-2) working days, and up to a week in other jurisdictions.