Partner Article

Destinations to set up offshore companies

Many entrepreneurs are choosing to expand their businesses overseas to take advantage of the easy access to international markets. Offshore companies can also enjoy a range of tax, privacy and asset protection benefits if incorporated correctly in the right jurisdiction for the particular business.

However, you must not assume that an offshore company is a licence to print money. There can be pitfalls along the way for the unwary entrepreneur. There are three essential factors you need to be aware of:

Know your business inside and out

Study your business and determine how it works in terms of cash flow; know your market and how to recognise changes and find out what the implications are of choosing to locate offshore. Of course, every business is unique, but the key features you need for success offshore are solid policies and practices. Know what is best for your business and you should be able to transfer this knowledge to your chosen offshore jurisdiction.

Know your options

When you choose to incorporate your business offshore, you must choose the right location. Not all offshore jurisdictions are the same. For example, some types of offshore companies will work better registered in the Seychelles than in Panama, and vice versa. It is strongly recommended that you get professional advice from offshore formation agents about the structure of your business and where will be the best fit for its particular model and goals. They can offer additional services to improve and develop your business.

Trustworthy partners and advisers

Offshore companies are different from those registered domestically. In theory, they can offer a number of significant benefits but you must seek out all the information you need. This is why a reputable and experienced offshore formation agent is worth every penny you spend.

There are many jurisdictions where you can incorporate offshore companies. They all differ in what they offer the foreign investor, but three of the most popular are outlined below:

Hong Kong

Hong Kong is an ever-growing, renowned and respected world financial centre. It stands at the gateway to China and Asia for financial and business dealings and activities. It is the third largest economic hub after London and New York. Offshore companies based in Hong Kong can deposit, withdraw and move money with no tax liability. Hong Kong’s legal system is similar to England’s. A major benefit is that its tax legislation and system is based on source, not residence. There is no requirement for local directors or shareholders. Corporation tax is charged at 16.5% for obtained revenue, and there is tax exemption on income not gained in Hong Kong.

The Seychelles

The Seychelles is an independent and democratic republic consisting of 115 named islands, situated in the Indian Ocean. The islands have a modern and prosperous economy and are politically stable. The country has impressive environmental standards and a great climate. The Seychelles are situated strategically close to the major manufacturing, transport and trading nations of Africa, Asia and Europe. Offshore companies located there are tax exempt from foreign income tax. They provide a great level of confidentiality for foreign companies as there is no information sharing or personal information registered in the public domain. There is no requirement for accounts, tax and financial information to be reported. Directors, officers and shareholders can be of any nationality and need not be resident. Offshore companies can typically be registered within a couple of days at minimal cost.

Panama

Panama is a republic located in Central America. Famous for the Panama Canal, it is a great prospect for investment and development. The country is modern and stable with a free trade economy. It has more than 100 local and international banks, making it a great international financial centre. Its economy is growing quickly, with the majority of its income (around 75%) coming from tourism, real estate, construction, commerce and manufacturing. Non-resident international business companies are tax exempt on activities outside Panama. Identities of shareholders are kept secret, as are banking details. Directors, officers and shareholders need not be resident and can be of any nationality. An offshore company can usually be registered within three to five days.

The Information provided in this article was presented to you by www.offshoreformations247.com. They are a specialist offshore company agent and offer assistance to those looking to set up a new company.

This was posted in Bdaily's Members' News section by Tom Brown .