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What is an Offshore company, and how you can set it up?
– An Offshore Company is a legal entity formation, established outside the country of residents.
– Protected by specific legislation that guarantees full tax exemption, except for a small annual fee, and generally a high level of privacy.
– Offshore Company incorporation is a very simple process for all of the popular jurisdictions.
– You can have a fully legal company to conduct international business, or to protect your assets, or to avoid tax.
How a corporation is taxed?
Due to differing tax rates and legislation in each country, tax benefits can be exploited.
For Example. If a Russian Company buys goods for the price of $100000 from China and sells them for $220000, the Russian Company will have to pay taxable income on $120000.
How a corporation can set up an Offshore Company in Tax Haven and maximize profit?
However, tax benefits can be exploited if the Russian Company by set up an offshore company in an offshore jurisdiction, for example, British Virgin Islands, to buy the same goods for $100000, sell the goods to the Russian Company for $200000 and then sell it again in the domestic market for $220000. This allows the Russian Company to report a taxable profit of only $20000 because it was purchased for 200000 and sold for 220000, therefore based on the current tax rate of 20% the tax that should be paid in Russian is only $4000. While the offshore company will have to pay tax on $120000 profit, the tax is payable to the tax authority of the British Virgin Islands and Since the British Virgin Islands has a corporate tax rate of 0%, no taxes are payable.
Main Benefits of using an Offshore Company
Offshore jurisdictions are tax-free environments. There is no corporation tax, no income tax, capital gain tax, no vat or sales tax.
An Offshore Company that has been established properly will give the owner financial confidentiality.
“The secret to success is to own nothing, but control everything.” – Nelson Rockefeller
Maintaining Offshore Companies is very easy due to the lack of bureaucracy and minimal documents required.
Easy & Fast Incorporation
We can make you ready for your business for as little as 1 day.
Who is using Offshore Companies? Take a look at the facts:
Offshore companies are used by everybody. The majority of multinational companies around the world are using offshore structures to make the most effective use of their resources and their assets.
Many international brands are conducting their business to an Offshore Company in order to take advantage of lower tax rates offered by offshore jurisdictions for maximum returns.
Offshore Company Applications:
- Consultancy Business
- Real Estate Holding
- Royalty Holding
- Offshore Private Funds
- Ship management & yacht ownership
Criteria for choosing the right jurisdiction:
- Tax benefits and ability to apply them
- Minimal Administration
- Flexible Legislation
- Avoiding Bureaucracy
- Double Tax Treaties
- Level of professional services
- Registration and maintenance cost
If you need to keep up to date on legal tax optimization techniques and find out which structure will best suit your business, CONTACT US for FREE CONSULTATION