!! # OFFSHORE SERVICES Company Formations, all offshore services banking

	Offshore companies and Tax free Business Structures
	Selecting a suitable Tax Haven
	Common Uses of an Offshore Company
	Where to incorporate your offshore company
	Personalized Comparison Service
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	International Trading
	Manufacturing
	Investment Companies
	Holding Companies
	Property Owning Companies
	Probate
	Consultancy and Services
	Ship and Yacht Ownership
	Intelectual Property
	Inheritance Tax Protection
	Insurance Companies
	Internet Trading
	Asset Protection
	Family Wealth Protection
	Confidentiality

Common Uses of an offshore company.

	Tax Savings
	Anonymity
	Protection against litigation
	Flexibility
	Freedom from administrative duties e.g. bookkeeping and filing returns
	Confidentiality of profit and loss accounts
	Lack of hassle
	To create the impressions of running a larger company than they actually do for ...

The actual way an offshore company might be used are detailed below one or more will probably fit in with your own plans.

International trading.

Export and import transactions can be made much more tax efficient by the use of offshore companies.

The use of an offshore company between a seller and a buyer of products or services in different countries can allow profits on the transaction to be accumulated offshore. The company can be designated as a marketing or an export consultancy with active nominees to give it a more substantial appearance.

Invoicing is via the offshore company, but goods can normally travel direct from source to destination.

Such structures can be particularly beneficial to transactions within EU countries where problems of VAT accounting can be solved by registration in a suitable location. A UK or Irish onshore company can be useful in conjunction with another vehicle.

Factoring of debts using an offshore company also has interesting possibilities for moving money from a high tax to a low tax area.

Manufacturing.

Some countries have a preferential tax rate for manufacturers, this can be exploited by establishing a manufacturing company in the appropriate jurisdiction and separating off the manufacturing part of a company's operations by basing it in a free trade zone, or country that offers tax breaks huge savings can be made.

Investment Companies.

An offshore company is often used to make investments and accumulate wealth offshore. The company can invest in stocks and shares, property or commodities and can take advantage of many other investment opportunities.

In most jurisdictions 'withholding tax' is levied on income remitted out of the jurisdiction, but the careful use of double tax treaties can reduce or even eliminate tax on the investment income. This may enable the investor to make investments in high tax countries from an offshore base with a minimal tax liability.

In some countries interest is paid gross on tax free bonds or bank deposits, and these can be integrated into the client's tax planning.

The investment may be rolled-up in certain circumstances without income being remitted.

A jurisdiction can be chosen where death duties and capital gains taxes can also be avoided.

Use of an offshore company also protects the identity of the ultimate beneficial owner.

Holding Companies.

Companies like the International Headquarters Company in the UK can handle dividend receipts from a spread of subsidiaries. This allows a group to centralise its resources and maximise the tax benefits. Careful use of tax treaties is needed to obtain the best results.

Other locations both onshore and offshore can be used, the holding company can also fund subsidiaries in a tax-efficient manner.

Property Owning Companies.

Owning overseas property through an offshore company gives several advantages;

It is possible to avoid inheritance tax, capital gains tax and death duties.

The process of sale is simplified. In some countries the establishment of title is time-consuming and costly. Once title has been established for a company-owned property it never needs to be established again. Sale can be by transfer of shares in the company, so that the title to the property remains vested in the company.

Sale by share transfer saves legal fees and transfer and value added taxes levied by certain countries. Government stamp duties and capital gains taxes can be avoided. Exchange control delays can be avoided.

An example of this is that a UK non-resident can use an offshore company to gain relief from income tax, capital gains tax and inheritance tax on ownership of UK property the same benefits are generally achievable by most other nationals.

Corporate ownership has the additional added benefit of shielding the identity of the ultimate beneficial owner of the property.

Probate.

Ownership of a portfolio of investments, properties or other assets though a single offshore holding company can simplify probate procedures upon the owner's death. Probate can be applied for in the offshore jurisdiction rather than in several different countries where the assets are located.

Legal fees are reduced and publicity may be avoided.

Consultancy and services.

Consultants and those providing services such as musicians and entertainers often receive much of their income from overseas.

This income can be remitted to an offshore company, which in turn employs the consultant and pays over a modest amount for expenses retaining the bulk of the moneys offshore.

Employment overseas is often facilitated by the use of an offshore employment company. This can either employ an individual or a group of individuals working overseas. The employee keeps the bulk of his income outside the country of employment and the structure can also reduce currency exchange problems.

Ship and yacht ownership.

It is often advantageous to own a vessel in an offshore location, this can have significant tax benefits. It can also provide an easy registration procedure for yachts, which in certain countries can only register on the major national register with onerous compliance requirements.

A separate offshore company may be formed to operate or charter the vessel.

Intellectual property.

Patents, copyrights, trade marks, franchises and other rights such as those in music, computer software and technical know-how can all be transferred into the ownership of a licensing company, which may be offshore or onshore. The offshore company makes licence or franchise agreements and the company receives royalty payments and licence fees.

Inheritance Tax Protection.

Ownership of assets through an offshore company can often eliminate liability in the owner's own country to inheritance tax and death duties.

Insurance Companies.

Most offshore centres will only accept registration of insurance companies which are subsidiaries of existing insurance groups, or which are very heavily capitalised. Fortunately we have managed to find a few loopholes in several first class jurisdictions where it is still possible to register an insurance company with relative ease.

Internet trading.

One of the fastest growing areas of international trade is the Internet. The international nature of the trade and the potential tax complications of dealing internationally can be solved by the creation of a specialist Internet trading company offshore.

To obtain favourable tax treatment it is necessary to locate the server physically offshore and to have a separate domain name.

Though the opinion is often expressed that such operations are 'all in cyberspace' and therefore location is not important, in fact regulation is increasing and planning should anticipate likely future controls. Having said that the Americans seem keen to make the Internet tax-free and keep it that way so no one knows how it will go long term.

We can generally arrange a tax haven domain for around £100 0r $140 or a tax haven email address, for example if your name is Richard Davis we could arrange something like Richard@davis.tc (Turks and Caicos Islands) for £29.95 or $41.95, this can be pointed to your existing email account.

Asset Protection.

A Trust can be established whereby the Settlor, having handed over his assets to the Trustees, no longer owns these assets so they cannot be seized in cases of insolvency, marital proceedings or professional negligence.

If however, the Trust was set up intentionally to avoid a known current or future liability it may be set aside by the courts.

Trusts are excellent asset protection vehicles and are extremely flexible in times of political and economic instability.

Family wealth protection.

Trusts are often used to protect the continuity of family wealth by imposing conditions on the use and distribution of the moneys on present and future generations. Such an arrangement may also replace a will in certain circumstances. Trusts can be used legitimately to avoid 'forced heirship' provisions affecting inheritance. Inheritance, capital gains and income taxes can all be minimised in this way.

Confidentiality.

There are often sound commercial and security reasons for using the confidentiality that an offshore structure can provide.

Confidentiality is a cornerstone of the functioning of offshore centres. Without confidentiality laws and codes of practice there would be no faith in the finance centres and their economies would fail.

Banks, fiduciaries, trust companies and corporate service providers all adhere to the strictest standards, whether these are enforced by law or not.

Subject to the requirements of the money laundering and financial regulation laws, only a properly authorised criminal investigation will cause such a firm to divulge the ownership of an offshore structure or bank account.

Many clients ask us the question, what are the drawbacks of an offshore company? The truth is that after 16 years in this business we can't find any, even if you need to operate in an onshore location which obliges foreign companies to establish a Branch office. For example let's take the UK, you simply register a UK company of the same name, which is wholly owned by the offshore company, this UK arm of the foreign company has several advantages, the UK company can operate freely in the UK and register for VAT giving access to the entire EU but the offshore company appears as the director on official records, so no UK / EU nationals appear at Companies House. Of course another benefit is if you get into an awkward court case you can always close the UK Company, leaving the offshore parent company intact.

The key to a successful offshore business lies in the equation between what it costs and what it saves. The problem is that if you are not careful costs can run at £2500 per annum ($3500), or more in government taxes, nominee charges, filing fees, provision of registered office, offshore Maildrop, phone facilities etc. The reality is it needn't cost a fortune. Let's assume you wish to have nominees in place to conceal the true ownership, you want to include the annual company tax, the filing fees, the registered office etc. This is all that is needed, although you may need other facilities; discreet banking arrangements, offshore addresses and phone or fax numbers, but these options although they increase flexibility and are not vital. So in summary let's base annual costs on the minimum requirements outlined below:

Registered Office - Filing Fees - Annual tax - Accountancy Fees - Annual Cost £220 ($308)
Nominee Director & Secretary Annual Cost £300 ($420)
Total per Annum £520 ($728).

Divided into a weekly figure this works out at £10 or $14. It goes without saying that if you can't save at least 10 times that amount, then you probably don't need an offshore company!

The vital thing to consider is that many so called experts who set up offshore companies will sell you something you do not need, and others will send you a list of what's available and let you choose for yourself, without really determining if you are making the right choice. Of course only you can make the final decisions based on commonsense and carrying out a bit of research into the various options available. The key is caution and to beware of hidden charges and unpleasant surprises. A typical example we came across recently was a client who asked us to take over the administration of his company from a local Gibraltar firm, the only problem was they wanted £800 in order to resign as agents and release the company to use. This is just money in their pocket and in our opinion a scam, we do not make a charge to release a company, after all if we do our job right and you are satisfied why would you want to go elsewhere? Finally consider how the place of incorporation looks to clients. We, ourselves, are incorporated in Delaware, the details below appear at the bottom of our headed paper. The point here is that some jurisdictions suggest specific things. If you mention the Channel Islands in the UK, people think of tax avoidance, which is not always the case. If you mention a Colombian company people think of Cocaine, if you say you are incorporated in Liechtenstein, it suggests wealth. Whilst the first two are often wrong, the third one is usually true, because a Liechtenstein company costs a very substantial sum to set up and the annual operating fees are also very high. The key point is that where you incorporate is important when it comes to creating an image that is favourable in the eyes of your clients. After all it's pointless to save 35% in tax only for the location of the company, to frighten off 40% of the customers!