WHAT IS AN OFFSHORE CORPORATION
The term offshore, when used in this context, and when referring to a country, means a jurisdiction that offers financial secrecy laws in an effort to attract investment from outside its borders. When referring to a financial institution, "offshore" refers to a financial institution that primarily offers its services to persons domiciled outside the jurisdiction of the country in which the financial institution is organized.
An Offshore, International Company is commonly set up in a tax haven like Vanuatu or the British Virgin Islands, where there are no corporate or personal income taxes, capital gains taxes, reporting requirements, or restrictions on company employment policies. The main restriction is that the company, being exempt from all local taxes and restrictions, may not conduct business within the tax haven itself.
Conduct business without corporate taxes: Tax havens, such as Vanuatu and the British Virgin Islands, allow the formation of International Companies that have no tax or reporting responsibilities. This means you save money not only from the absence of corporate taxes, but also from reduced compliance and other regulatory costs.
Conduct business as an international entity: International Companies have the same rights as an individual person and can make investments, buy and sell real estate, trade portfolios of stocks and bonds, and conduct any legal business activities - so long as these are not done in the country of registration.
Keep business affairs confidential:: Offshore Companies offer complete privacy. If the company shares are held by a Trust, the ownership is legally vested in the trustee, thus gaining the potential for even greater tax planning advantages.
Reduce payroll and travel expense administration: Offshore Companies set up in Vanuatu or the British Virgin Islands need not pay social security, withholding tax, or associated expenses of employees working in other foreign countries. This can be a major savings for companies that have staff working on overseas projects.
Allow employment or consultancy fees to accumulate in a low tax area: Offshore corporations can contract the services of professionals to employers resident in high tax locations or politically unstable areas. This allows the fees to accumulate in a low tax jurisdiction.
Protect investments in other foreign countries: International Companies can loan funds to corporations in other foreign countries. Investors may set up, but not directly own, an offshore company that loans funds to a development company set up in another country and charge interest rates that will lower tax obligations and protect the long term ability to repatriate investment funds. This can be especially important when working in countries with strict exchange controls and high tax profiles.
Minimise tax exposure when dealing with international transactions: An offshore corporation can buy or lease products from one country and then sell or lease them to a company in another country so the profits of the transaction are accumulated in the offshore company where there is no taxation on profits.
Maximise profits from intellectual property rights, franchising and licensing: An offshore company can franchise or licence intellectual property rights in other foreign countries allowing the profits to accumulate in a tax free environment.
Protect the long-term survival of multinational companies: By moving their domicile from countries with poor economic or political stability to a more stable tax haven.
Protect assets: In combination with a Trust, an Offshore company can avoid high levels of income, capital and death taxes that would otherwise be payable if the assets were held directly. It can also protect assets from creditors and other interested parties.
Simplify the transfer of assets and properties held in several countries: The sale or probate of properties in different countries can become complex and expensive. If these are collectively held by an offshore company, ownership can be transferred by company shares rather than transferring the actual properties owned by the company.
Own or lease ships or pleasure craft: Vanuatu International companies may own or lease ships or pleasure craft and pay no taxes on income derived from the vessels. Registration fees are low and Vanuatu flag vessels are welcomed in ports world-wide.
Offshore Investing
Investing Offshore can be a very attractive option for the discerning investor that would like to explore other markets, shield his investments from onerous capital gains taxation, or grow his assets in a confidential, secure investment not governed by the rules and regulations of his home jurisdiction.
While Offshore investments might be, at first glance or to the uninitiated, associated with a tremendous amount of risk in low-sophistication environments or jurisdictions, these assumptions would be grossly incorrect. Offshore investment vehicles are usually found in jurisdictions that have quite sophisticated rules, regulations, and policies that direct how deposits and investments are handled and managed within their jurisdictions. Let´s remember that these are often the same jurisdictions that rely upon Offshore capital for their banking institutions and are hence quite concerned that they maintain their hard-earned reputations as low-regulation, high-confidentiality tax havens.
Benefits of Offshore Investing
Most American investors look to these Offshore investments for purposes of diversifying their investment portfolios, spreading their risk in a wide an arc as possible, and sometimes even to defer the onerous taxation placed upon capital gains in investments.
Other benefits include the inherent confidentiality of these Offshore investments, and the shielding from liability from any debts, obligations, or liabilities experienced at home.
Citizens of other countries may look for these same benefits in Offshore investments, and many times also look for the stability afforded in these Offshore jurisdictions. They may already bank in an Offshore institution in order to safeguard their assets from political or economic turmoil in their home country, and investing in these same haven jurisdictions is the next logical step in maintaining and growing their assets.
Other benefits are tied into the manner in which interest earned in these investments is handled. In a U.S.-based investment, an American would be required to report the interest gains on his investments, irrespective of whether or not an actual distribution was made to him; further, when the entirety of the investment was "cashed in," that same citizen would be responsible for reporting the entire amount yet again; in effect, a classic double taxation peril. With an Offshore fund, however, this situation would be very different. It would depend on the type of fund, of course, but the Offshore investor would be able to designate that any interest be automatically re-invested or "rolled back into" the initial investment and hence allow for tax-free growth of his money. The only time the investor would be liable for any taxes in his home jurisdiction would be at the termination of his investment (when he "cashed-in") and "brought the money home." This, of course, would be the sole time his money was taxed.
Who can Invest Offshore?
The simple answer is that almost anyone can. There are limitations in some countries, like the U.S., that preclude most Offshore investment companies from directly soliciting business from their citizens. In the U.S., however, while the Offshore company is expressly prohibited from soliciting Americans, Americans can legally solicit them and transact with them.
Offshore investments can be as sound and secure as any home-based investment, with the same inherent risk-benefit scales. They provide added value to any investment strategy or portfolio by lending said portfolio added diversification, flexible investment vehicles not available in the home jurisdiction, and the potential for substantial savings in capital gain and dividend taxation
To learn more about offshore investing options and other private financial tools, speak to an Offshore Company specialist, or request a consultation today
Specialising in offshore business consultancy , HPS INTERNATIONAL CONSULTING is established in Africa as the market leader in this field. Due to our vast experience, we are able to offer clients assistance with all aspects of company formation, limiting liability, asset protection and tax minimisation.
Dealing with clients worldwide, HPS INTERNATIONAL CONSULTING is proud to offer the experience and knowledge in offshore solutions to a continued growing client base, making us the world leader in this field. Over the years HPS INTERNATIONAL CONSULTING has continued to surpass competitors in the market place due to the wide range of services and professional advice we can offer. Not only do we specialise in offshore company formation, but can assist with virtual office solutions, banking requirements and also premium business licenses.
Due to the vast number of incorporations handled each year, we can offer you the advice of the most highly trained and experienced offshore consultants
Working alongside some of the worlds leading banks and financial institutions HPS INTERNATIONAL CONSULTING can assist with all aspects of your company formation from beginning to end. We can form your company, offer virtual offices, and assist with account opening and even e-commerce services. We are proud that because of the continued growth in the past year we can pass on further reduced rates to our clients in 2007. We now offer more than 20 jurisdictions with incorporation at affordable price. Over the following pages you will find full and detailed information.
We look forward to receiving your email or telephone enquiry.
For new enquiries please use contact form or email us
Existing clients can best reach us through the online support
| 
