Article provided by: Wealth Safe
Why You Should Create An Offshore Company
The main reason a lot of businessmen and businesswomen love to create an offshore company is the minimization of taxes coupled with higher level of confidentiality. Others prefer to create an offshore company because of reduced business overheads. However, there are more benefits than can drive any investor to create an offshore company.
Some of the reasons offshore companies are quite attractive to business men have been outlined below.
As mentioned earlier, setting up an offshore company minimizes taxes considerably. As a standard practice all over the globe, non-resident companies are usually exempted from paying tax while some pay very small amount compared to their resident counterparts.
However, there are several other laws attached to it and this makes corporate taxation matters very complex. You may need the services of a professional to avoid paying more or lower than you should be paying because either way, you will lose money.
When you are paying higher than you should pay, you are losing money and when you are paying lower than you should be paying, when you are caught, it will be a tax evasion issue even if you are sincerely ignorant. Needless to say the penalty can be stringent.
In most countries, offshore companies are not legally obliged to disclose the details of their shareholders and directors to the public and neither are they required to furnish the public with their financial information. So, they enjoy a high level of privacy. It is only when terrorist or criminal activities are suspected that such information will be requested.
The duties and responsibilities of officers and directors of offshore companies are fewer. In addition, there is usually no need for members of staff or any physical office. So, an offshore company can make use of virtual offices thereby saving a lot of cost that would have been used to rent an office and hire staff.
Protection of asset
An offshore company can also be used for asset holding or protection. This is for the companies with international business interests. Some offshore companies have clauses in their statutes that protect them from claimants and creditors who may want to have access to the companies’ assets. This protects the assets, investments, and valuables of business moguls who may be a target for lawsuits
It is easier to set up
Despite the challenges posed by several anti-money laundry measures put in place, it is much easier and faster to set up an offshore company. In addition, it is also cheaper to maintain. This is why offshore companies seldom collapse. They are not so capital-intensive.
It is usually cheaper to register an offshore company. In fact, in some countries, operators in certain jurisdiction do not need any capital to register their company.
To make the best of these advantages you need the services of experienced professionals to help you set it up and probably advise you. This is because there are several rules that guide setting up and running of offshore companies and these rules vary across countries and across jurisdictions. Most importantly, the rules change often.
Only an experienced professional can easily navigate the waters of ever changing tax rules and other business rules.