Offshore company

Published:

February 1, 2020

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Offshore company. What is offshore? An offshore is a territory with a specific business climate. There are reduced or zero tax rates for foreign companies.

An offshore company is a legal entity registered in a territory with a milder business climate: reduced or zero tax rates (offshore)

An onshore company is a legal entity registered in a territory with an unattractive business climate: strict requirements and taxes.

What is an offshore company used for?

For comfortable doing business abroad;

To attract foreign investment;

To save on taxes without breaking the law.

What are the types of offshore companies?

Investment – the basis of their activities are investments made in various projects. Profits are subject to minimum tax.

Holding – registered for the development of the business, or for making investments in other companies. Profits are not taxed in whole or in part.

Trade – used to establish trade links between branches of one company in different countries. With their help, it is possible to arrange the export and import of goods (works, services) from one state to another.

Banking – subsidiaries of all kinds of financial organizations.

Due diligence for an offshore company is an examination carried out to assess the current state of the company from a legal and tax point of view.

Offshore company management. The managing person of an offshore company is its director. It is possible to appoint a nominee director if the real owner wishes to remain incognito.

The purchase of a ready-made offshore company is a procedure for re-registering an already registered legal entity with a new owner and introducing him to the company’s shareholders council.

What is the difference between an offshore company and an onshore company? An offshore company is fully or partially exempt from taxation, its owner may remain unknown. Offshore and onshore companies operating in offshore territory practically do not differ from each other.

Offshore company registration process:

Choice of name;
Preparation of constituent documents and holding a constituent assembly;
Approval of the authorized capital;
Office registration.

An offshore company renewal is required annually. There is an annual tax payment, transfer of fees for the services of a registered agent, for a legal address and other services.

Why is the power of attorney for an offshore company given only for a year? The nominee director is re-empowered annually. This is necessary to minimize the risks of the actual owner, and also allows the owner to refuse nominee service if it is no longer needed.

Taxation of an offshore company. Depends on the specific country and type of legal entity. This can be the complete absence of any transfers, the minimum rate, or preferential taxation.

Concealment of the real owner (beneficiary) of the offshore company. Allows the owner to remain incognito to avoid any problems. Management, in this case, is carried out by a nominee director.

What is nominee service? This is a tool for managing a company, in which the actual owner remains unknown. The board includes nominee (dummy) persons: director, secretary, other members of the board of directors.

What is a nominee service for? So that the real owner of the organization remains unknown, for security reasons or to avoid the recognition of the parent and subsidiary companies as interdependent.

Liability of the offshore company denominations. The nominee director is responsible for the correct accounting, payment of the necessary taxes and fees, etc. In the event of any claims from the regulatory authorities, it is the face value that will have to be answered.

Set of documents for an offshore company:

Certificate of Incorporation;
Charter;
Appointment of a director;
Nominee service documents

What is apostille? Apostille is one of the types of certification of documentation, officially recognized by many countries of the world.

Apostilled stitching of documents of an offshore company is a list of certified documents required for running an offshore company.

A bank account for an offshore company allows you to take part in various transactions, invest in any projects, as well as protect the company’s money from arrest or other encumbrances.

A merchant account for an offshore company is required so that a legal entity can accept payments from global payment systems: Visa, Mastercard, Maestro, American Express.

The Good Standing certificate is a document confirming the legality of the company’s activities, as well as the absence of any debts for mandatory payments.

An Incumbency Certificate is a document containing the required information about officers.

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