Offshore Company Formation – What You Need to Know

Many entrepreneurs choose to set up their company offshore, and there are many benefits associated with offshore business registration, which we highlight in this short article. There are many regions of the world where you can set up an offshore company, depending on your precise needs.

What is an offshore company?

An offshore company is a business entity that is under the jurisdiction of a specific country that offers attractive concessions in order to attract foreign investors.

The following regions currently offer offshore company formation, and each has its own requirements:

Asia Pacific

• Singapore 
• Hong Kong 
• Labuan 
• Samoa

Indian Ocean

• Seychelles 
• Mauritius

Middle East

• UAE

Europe

• Malta 
• Cyprus 
• Madeira 
• United Kingdom
• Switzerland

Americas

• Anguilla 
• Bahamas 
• Belize 
• Cayman Islands 
• British Virgin Islands 
• United States of America

Choosing your location is critical, as every nation has its own specific laws, rules and regulations for offshore company registration. Click here to find out how AI tools can benefit your business.

There are three main types of business entities that you can set up as an offshore company, which are as follows:

• International Business Company (IBC) – This is suitable for both local and foreign businesses that are looking for a transparent structure. One shareholder and one director are required, and the entity is unrestricted in its business activities and is subject to local compliance.
• Limited Liability Company (LLC) – This is a liability limited entity that is transparent, with thin capitalisation, suitable for a holding partnership. This entity is unrestricted in business activities and is subject to local compliance. There is at least one director and at least one limited partner required; for more details, talk to a leading international law firm.
• International Trade & Tax Planning Entities – This option is suitable for professional people, such as financial advisors, lawyers and private equity funds with limited partners. This requires at least one manager and two partners, while capital depends on the business activity. The entity is unrestricted in business activities and is subject to local compliance.

The importance of legal advice

Prior to making any decisions regarding offshore company registration, you are advised to consult with a leading international law firm that has extensive experience in setting up offshore companies. The legal specialist can point out long-term aspects of the many options, and once they are aware of your objectives, they can advise you accordingly.

Taxation

There are tax concessions offered by offshore entity nations, and each has its own particular rules regarding tax. Income and corporate taxation vary, and by consulting with a tax specialist, you can make an informed decision about where to base your business and what type of entity to register.

Various Options

• Investment holding – The British Virgin Islands, Cayman Islands, Mauritius or Seychelles are the best locations to set up an investment holding company to own any shares worldwide.
• Trading – International Business Companies are primarily used for import/export activities.
• Real estate investment – Mauritius is a popular location for asset management and property holding; houses, apartments, yachts and ships are registered here, due to favourable conditions. Both movable and immovable assets are registered in Mauritius.
• Financing – International trade and tax planning entities can be used for private transactions between entities.

The above are just some of the common uses for offshore business entities, and if you would like to explore the potential that offshore company formation offers, connect with a leading international law firm and get the very best advice and service.

Whether you prefer offshore company formation in the US, UK or one of the smaller locations, talk to an experienced business lawyer and then you can make an informed decision.