Setting up an offshore company
Prior to deciding how and where to set up an offshore company, there are some very basic questions one must ask of themselves.
“What is the purpose of setting up this offshore company? What do you expect it will accomplish for you”
The effectiveness of setting up an offshore company depends entirely on where you are resident for the purposes of taxation.
In the U.S.A. and most other high-tax jurisdictions, there are a wide array of rules and regulations governing foreign companies, where the local authorities would like to treat the profits of the company as the profit of the owner who is resident there.
The aforementioned in mind, there are compliant ways to structure ones affairs through the use of offshore entities to accomplish asset protection, and legally compliant tax deferral.
It is critical to deal with reputable, and established professionals to ensure things are structured correctly.
Once you have established that there is a reasonable and legitimate need to form an offshore company, then the next issue to consider is where to set it up.
Once you have determined the best place to set up your offshore company, with the assistance of a professional offshore company formation agent, the remaining point to keep in mind is that the company complies with the laws of your country of citizenship and/or residence.
Offshore company formation has become a booming industry for many offshore centers, such as Belize, or Panama where basic companies can be incorporated with a minimal expenditure of time and money.
These centers do not tax any of the profits of the offshore company, nor do they require financial statements to be produced, filed or audited.
This alone makes both Belize & Panama excellent options for those wishing to set up an offshore company.
The use of nominee directors, and combination entities or complex structures further enhances the security and privacy protection attributes of ‘going offshore’. Such structures, when correctly formed, will not be liable for tax in any of the jurisdictions.
Once again this brings to the forefront the importance of working with experienced professionals when ‘going offshore’
While there are many internet sites offering complete company formation services, and purporting to be experts, the reality is many are simply what we like to call ‘Kitchen Table Middlemen’ working literally from their kitchen table.
Beware offshore service providers who will not tell you exactly who they are, who is behind their company and where they are physically based. We have seen some over the years claim they need to protect their confidentiality, etc don’t buy that excuse as it is not really an issue here – who hides from their prospective client(s)?
Also beware offshore service providers with incorporation in one country, addresses in another country and telephones in yet another country. This is usually a sign of someone operating their business from their kitchen table.
In recent years we have seen for example one provider claiming to be based in an English speaking country in Europe, all the while the person behind the business was a USA citizen, based in Canada using a Mexican based Skype Number.
An excellent example of how a little due diligence goes a long way.