In recent years, offshore companies and tax haven entities have been in the limelight. Many individuals, however, are still unaware of the need to set up an offshore company. Businesses are going more global than ever. All the barriers to trade and capital have also been reduced in this century.
The reasons for setting up an offshore company are listed below:
1. Access to enhanced resources:
To get better infrastructure for your business, you should opt for an offshore entity. Moreover, setting up an offshore company will offer strategic advantages for your business like flexible legal structures, and better natural resources.
Privacy is not respected in every part of the world. In some countries, governments take advantage of personal financial data to create political pressure on businessmen. Hence, setting up an offshore entity where you can get proper security and data privacy will be beneficial for the business. The most preferable country for such a facility is Europe, the states of this country also offer a robust legal framework and a network of service providers like Swiss Financial Company and Trust SA that allows rationalizing the process of setting up a Swiss company and hiring a tax representative in Switzerland.
3 .Tax efficiency:
Some jurisdictions offer various tax advantages, which is lucrative for setting up an offshore company. For example, Singapore has the lowest corporate tax rates in the developed world. There are some tax haven countries like Mauritius, Cook Islands, British Virgin Island, etc. that provide special taxation advantages for International & Offshore Businesses. These tax haven jurisdictions minimise the tax burden which is very helpful for startups and small businesses.
An offshore company can be used as the most appropriate instrument to mitigate the risks of political instability, economic turmoil, or currency volatility. For example, to limit the exposure to their fallout from Brexit, British businesses have already started to register for European subsidiaries. Expanding your business operations across the borders can act as a long-term business strategy when the global economy is getting increasingly intertwined.
Strict regulations in some jurisdictions can act as a barrier for certain business operations, such as capital restrictions and protectionist policies in some countries can create an obstacle to the foreign entities to launch factories, purchase property, or make investments in local companies. Hence, opening an offshore firm to complete business transactions and hold local assets may be reasonable.
Setting up an offshore business can therefore turn out to be highly profitable for your company. It will also enable your company to gain good brand recognition from foreign markets and earn high revenues.