Bowman Offshore Bank Transfers: Start an Offshore Company

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As I mentioned earlier, inflation or hyperinflation in your home country could drastically reduce the value of your wealth. Having an offshore company with an offshore bank account can keep your business assets insulated against this threat. If you own a patent or trademark, registering it in the name of an offshore company can allow you to buy and sell these rights. Having these registered under an offshore company also makes it easier to grant these rights to third parties. What type of offshore company should you set up? Low taxes, secure business assets, and insulation against unrest at home–starting an offshore corporation is probably sounding pretty good right about now. But starting an offshore corporation isn’t as easy as going online and signing up. Speaking with an expert will help you figure out which type of offshore corporation strategy will work best for you. Maybe a Limited Company in Hong Kong is the right move for your offshore corporation– foreign profits aren’t taxed and local Hong Kong profits are only taxed at 16.5%. A private limited company in the UK or Australia might make sense for you, or even an offshore PLC in Singapore (it won’t get you to 0%, but it will reduce taxes). Each type of offshore company and each jurisdiction have their own unique strengths and appropriate uses. And certain offshore company types are only available in specific jurisdictions. For example, if a SARL makes sense for your business, you’ll be setting up in a French-speaking country. (It rarely does make sense, though.) Low tax or no tax? As tiny tax havens become impossible to deal with, people are actually moving into strategies in places like the US. There are ways for non-residents with LLCs to legally pay no or low tax. Same result, different structure–and another reason why a little expert advice is the right way to go. What are the best countries for an offshore company? Your goals will determine the best place for setting up an offshore company. One business might do well forming an offshore corporation in a country with no accounting or audit requirements and zero tax. A slightly larger, more diverse company might be better off going to Hong Kong or Singapore and paying a small amount of tax to get the benefits of a great international reputation. A company seeking to raise venture capital funds might go somewhere else entirely. While it is often possible to pay zero tax, sometimes it makes sense to pay a little tax. You won’t see me whining that I was able to legally reduce my taxes from 43% to 1%. The savings have put a rather substantial sum back into my pocket.
For some companies, paying a low tax is better than paying no tax. First, low tax locations often grant you more access to world-class banking, financial opportunities, and merchant services. And paying small tax amounts can make the difference between your home country leaving you alone and giving you a hard time. As the global war on tax havens heats up, setting up your offshore corporation in a respected jurisdiction might be the best strategy for you. And in some cases, it might not even cost you anymore. Common countries for offshore corporations Common traditional offshore jurisdictions include Nevis, Seychelles, Mauritius, the British Virgin Islands, the Cayman Islands, Antigua, Anguilla, and even the Gambia in Africa. Other low-tax jurisdictions popular for offshore companies include territories like Gibraltar, as well as low-tax European countries like Ireland, Malta, and even “zero tax” Estonia. In Asia, places like Hong Kong and Singapore offer the potential for zero or single-digit tax rates for foreign business, as well as a network of global tax treaties. Meanwhile, the Middle East is growing as an offshore hub, with Dubai and Bahrain offering their services to those interested in that region. Tax implications of offshore corporations We’ve talked a lot about how a big part of forming an offshore company is trying to reduce taxes or eliminate your tax burden entirely. In order to get the best legal results, you need to have the right team in place to manage your business. Having the right team in place to manage your business once it is set up does two important things–It makes sure you are 1) in compliance and 2) making the most of all tax benefits. Some higher-level offshore jurisdictions will require you to file annual accounts showing your transaction history. These include places like Hong Kong, Singapore, Cyprus, Gibraltar, etc. Many traditional offshore jurisdictions may require you to keep books on your own, but they don’t require you to file them. Even if you don’t have to file reports or pay tax offshore, you might be required to declare your interest in any offshore company to the country where you’re a citizen or resident. Forming an offshore corporation is about saving money and protecting assets legally, not hiding away or evading taxes. You want to make sure you’re not only aware of all the rules and regulations surrounding your home country and the jurisdiction of your offshore company, but that you’re complying with these rules, too. Offshore company requirements for US citizens The US government has some tight restrictions on offshore companies. As a US citizen, you’ll need to disclose any interest in an offshore corporation on your taxes each year. The same goes for any offshore bank accounts you are an owner of or signer on, in most cases.
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