What is Offshore Incorporation? How does an offshore corporation work? Why should I form an offshore incorporation? Those are the three questions that come to mind for most people when they hear the term Offshore Incorporation or Offshore Corporation. Let’s see if we can clear up some of the mystery of an offshore incorporation:
Offshore incorporation is a corporation or limited liability company that has been formed outside of your country of residence. One is well advised to choose the country of incorporation wisely. We offer Offshore Incorporation in various jurisdictions such as: Nevis LLC, BVI Corporation, Belize Company, Panama IBC, Cayman Company, and More…
An offshore corporation company that has been established properly will give the owner financial confidentiality. If one has an offshore bank account in ones own name, the name of the account holder is easy to trace. Let’s say that the bank mails offshore banking account statements to the accountholder. If another party intercepts those statements, the owner of the account may be subject to personal scrutiny. However, if the account is in the name of an offshore corporation and those papers are intercepted, there is not a direct personal tie to the signer on the account. Moreover, many offshore incorporation jurisdictions have strong laws protecting the account signer from being revealed to any outside party.
Offshore Incorporation – Privacy, profits & prestige. In the computer age, more than ever, many people are concerned about litigious attorneys, employers/employees, ex-spouses, ex-business partners, big brother and others invading their privacy. Would you like to have accounts with total confidentiality from the above intruders? Would you like to have the option of investing in high-yielding mutual funds and other strategies offshore that aren’t available at home? Would you like to give yourself the prestige and credibility of being the founder or officer of your own international company? Would you like to expand your business and offer your products or services to a worldwide marketplace, while at the same time, maintaining your confidentiality?
So, there are a multitude of reasons for having your own offshore incorporation. The above include just a few of the many advantages. Many people who have an offshore corporation have several companies. Having more than one offshore company allows funds to be transferred between companies that are free from government reporting. There is usually a significant reduction in paperwork because there may be no requirements by the government to report transfers of money between one foreign account and another.
In recent years, the Caribbean Island of Nevis has become one of the most attractive and convenient Offshore Incorporation domiciles in the world by the enactment of the Nevis Business Corporation Ordinance 1984. In Nevis, before suing your company one must post a $25,000.00 bond with the courts. Then, the one pursuing legal action is required to file a brief justifying why he or she should be permitted to sue. If the representative of the courts feel the suit is not warranted, the litigant will not be allowed to sue. Moreover, they will forfeit their $25,000 bond! Needless to say, there are very few frivolous lawsuits in Nevis!
There is good news for the US or Canadian person. Even though taxes are to be paid on worldwide income generated in a controlled foreign corporation, one’s privacy can still be protected. To maintain one’s privacy, the stock in the offshore corporation can be owned by a private Nevada “C” Corporation (or for a Canadian an Alberta Corporation). This way, the income produced in the foreign corporation is reported on the tax returns of the corporation and not the individual. Therefore, if one’s personal tax returns are summonsed, the income generated offshore does not have to appear. This can also be a tremendous tax-saving strategy, because the “C” corporation pays lower income taxes in most brackets than does an individual.
Because of the recent Organization for Economic Cooperation and Development (OECD) and European Union regulations, many jurisdictions that have a dependence on Great Britain have decreased or eliminated their privacy laws. The offshore tax havens that have independence from Great Britain have retained their strong privacy laws. Many of these countries receive a majority of their income from offshore services so they have a financial incentive to keep the privacy laws in place on a long-term basis.
We do not recommend the traditional British Dependant Territories such as Anguilla, Bermuda, Cayman Islands, Montserrat and Turks & Caicos. We also do not recommend the Isle of Man and the British Channel Islands (Jersey, Guernsey, Alderney). In addition to removing their privacy laws, these British Dependencies are implementing a withholding tax on bank account interest. If you already have a corporation or account in one of these jurisdictions, we recommend that you contact us and quickly switch to a country such as one of our company’s recommended locations.
It is our desire that our customers utilize our services within the bounds of US and international legislation. Years of experience has shown us clearly that those who try to shortcut the law end up holding the short stick. We only get one shot at life on this Earth. Few of us like to pay taxes. However, we have had would-be customers from time-to-time who concoct wishful philosophies outlining why the law does not apply to them; most notably, why they are not obligated to the tax code. That is, “I don’t want to pay taxes, so I am going to make up rules in my own mind why I shouldn’t have to pay them.” However, once brought before a judge, one will quickly realize that we cannot rewrite the laws with a philosophical fairy tale. The law applies to you me. Moreover, we do not want to spend wasted days battling our own wrongdoings. That is one of the big reasons we urge customers who use our services to keep in close contact with licensed legal and tax professionals. If you desire to participate in offshore incorporation and banking, make sure you do things right. Follow the law and play the game to win.
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I learned a lot about how exposed I was to lawsuits and judgements, I protected my wealth with several instruments.
- J.P. Dumini
I’ve learned that nobody wins in a lawsuit, the only way to ensure that you don’t lose, is to have something in place when you need it.
- J.M. Ansen, Los Angeles