Frequently Asked Questions (F.A.Q.)
General
What is an "offshore" company?Is it ethically right to conduct business through an offshore company or to utilize an offshore structure for asset protection?
What are the procedures for ordering my offshore company?
What is the best tax haven jurisdiction for offshore incorporation?
Is owning an offshore company legal?
Is it difficult to establish an offshore company?
What are the most popular uses of offshore companies?
How long does the offshore company formation process take?
What is a shelf company?
What is the purpose of a shelf company?
Is there any public record of the beneficial owners of an offshore company?
Will my privacy be protected if I incorporate an offshore company?
Can you help us open an offshore bank account?
Can I establish an offshore brokerage account held in the name of an offshore company?
Do I have to pay any taxes when using an offshore company?
I live in an EU country. How does the EU Savings Directive 2005 potentially affect my offshore company?
Does Sterling Offshore offer tax or legal advice?
Terms and Definitions
What is the Memorandum of Association?What are the Articles of Association?
What is a registered agent/office and must I have one?
What are the company objects?
What is share capital?
What is a nominee director?
What is a nominee shareholder?
What is a nominee account signatory?
General
Back to the TopWhat is an offshore company?
An offshore company is quite simply a company established in any jurisdiction other than your place of residence, citizenship or domicile. They also generally do not conduct business in the country where they are incorporated. Offshore companies are also sometimes called non-resident companies. Nearly every country on the planet offers tax advantages for “offshore” companies established by non-residents, which do not trade in that country. Even the USA has long been a popular “offshore” jurisdiction holding an estimated $400 Billion from foreign owned companies in its banks. The Delaware LLC remains a particularly popular company for this purpose.
Back to the TopIs it ethically right to conduct business through an offshore company or to utilize an offshore structure for asset protection?
This is an interesting question that is posed and one that many high taxing, low privacy, high litigation country governments would like to answer for you. Let us first be very clear that Sterling Offshore believes that every person and every company should pay their fair share of taxes and we do not advocate tax evasion or tax fraud of any kind. However, everyone has a legal right to minimize their taxes and protect their assets through legal tax avoidance. Citizens of many countries once thought to be beacons of freedom, privacy and free markets now find themselves with increasingly encroaching governments, uncontrolled government spending, rapid currency devaluation, rising taxes and litigation which are all spiraling out of control. In these cases, one could pose the question "Is it right not to protect yourself and your family by moving some or all of your investments and/or business offshore?"
Another answer to this question lies in the fact that "offshore" companies have facilitated and continue to fuel an unprecedented economic boom which has formerly poor and downtrodden countries now seeing economic prosperity. Hundreds of thousands of offshore companies are incorporated each year with many being utilized for investment and trade in foreign countries. The fact that taxes can either be delayed or completely avoided for these purposes has been instrumental in facilitating this global boom.
"No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue"
Law Lord, Lord Clyde, (Ayrshire Pullman Motor Services v Inland Revenue [1929] 14 Tax Case 754, at 763,764)
"There is nothing sinister in so arranging one's affairs as to keep taxes as low as possible. Everybody does so, rich or poor; all do right. Nobody owes any public duty to pay more than the law demands; taxes are enforced exactions not voluntary contributions!"
US Judge Learned Hand
Back to the TopWhat are the procedures for ordering my offshore company?
Please visit this link (Ordering Formalities) for a brief overview of the steps necessary to order our services and establish your offshore company. You will find all of the necessary information including specifics on each offshore jurisdiction, services offered, applications, etc on this website. Applications, country guides, relevant laws and other information can be found in our Downloads section.
Back to the TopWhat is the best jurisdiction for offshore incorporation?
This depends on the individual situation. Sterling Offshore takes the time to work with each client individually to accurately assess your needs and then suggest the ideal jurisdiction for your offshore incorporation. There are many other factors that may influence this answer including where the client or his/her business is located, specific countries where business will be conducted, type of structure needed, level of banking sophistication required, etc.
Back to the TopIs owning an offshore company legal?
In nearly every situation, the answer is a clear and resounding YES. Each country has different reporting requirements and tax treatment regarding offshore entities. This is why we stress the importance of obtaining professional legal and/or tax advice in your own country.
Back to the TopIs it difficult to establish an offshore company?
Establishing a typical offshore company is no more difficult than establishing an onshore company. In fact, the offshore company formation process is often easier and even faster. The minimal ongoing filing requirements and restrictions are often an attraction as well.
Back to the TopWhat are the most popular uses of offshore companies?
There are several uses for offshore companies including international investment holding (providing access to otherwise unavailable markets), international real estate holding, asset protection, international trade, import/export, transfer and holding of intellectual property, personal services corporations for expatriates working abroad, etc. See this link for more information Offshore Company Typical Uses.
How long does the offshore company formation process take?
In Seychelles, offshore companies can be formed in as little as 24 hours and sometimes within the same day it is ordered. Other jurisdictions generally take within 1 to 5 days. Be sure to specify if time is of the essence to you. Additionally, you may opt to choose a company from our list of offshore shelf companies. Contact us for the current list.
Back to the TopWhat is an offshore shelf company?
A shelf company is an unused company created by an incorporation agent such as Sterling Offshore, which has been established and “shelved” to be purchased and used at a later date. None of the shelf companies offered by Sterling Offshore have entered into contracts, opened bank accounts or conducted any kind of business whatsoever.
Back to the TopWhat is the purpose of an offshore shelf company?
The expression “I need this yesterday” is literally possible with a shelf company. Companies which have a bit of longevity often find it easier to obtain credit, bid for contracts and conduct international business since many entities are wary about engaging in business with companies having a short business history.
Back to the TopIs there any public record of the beneficial owners of an offshore company?
None of the offshore jurisdictions represented by Sterling Offshore have a public record of the beneficial owners of a company.
Back to the TopWill my privacy be protected if I incorporate an offshore company?
Absolutely. Sterling Offshore follows very strict internal procedures regarding client confidentiality. We will not disclose any client information except as required by local authorities by court order. Enquiries from foreign governments, foreign creditors or any other entity or person (local or foreign) are quickly and categorically dismissed as required by law.
We implore you to keep your offshore matters to yourself. Many are tempted to talk about their offshore structures and activities, but please consider that colleagues, business partners, friends and unfortunately even family can unwittingly pass sensitive information along that can lay bare your business practices and/or overseas assets to everyone.
If privacy is a big concern for you, we recommend communicating only via encrypted email. You can establish a free email account at www.hushmail.com from which you can communicate with us via a 2048 bit/128 SSL end-to-end encrypted connection. Our Hush email address is sterlingoffshore(at)hush.com. Replace the (at) with the actual "@" symbol as we removed it here to avoid spam. Similarly, you can visit any number of PGP promoters such as PGP.org for a free PGP encryption key. Follow the following link PGP and Security for more information regarding PGP and Security.
Back to the TopCan you help us open an offshore bank account?
Yes. Sterling Offshore provides bank account introductions in a number of “tax haven” jurisdictions and well known offshore banking countries including Belize, Seychelles, Panama, Isle of Man, Switzerland, Austria and Lichtenstein. We have conducted the research and established the relationships for you. Some of these offshore banks offer business and commercial accounts with internet banking availability. Others offer private banking and wealth management for high net worth clients. We can advise you on which banking option is best for your needs and help you establish one or more offshore bank accounts at your choosing.
Back to the TopCan I establish an offshore brokerage account held in the name of my offshore company or private foundation?
Yes. Sterling Offshore has located reputable offshore brokerage firms that offer an ideal combination of an online internet trading platform, reasonable fees, access to international markets and investments, a knowledgeable trading desk, solid customer service and guarantees of privacy for our clients. Additionally, these institutions will allow you to establish your offshore brokerage account in the name of an offshore corporation or private foundation established by Sterling Offshore.
Back to the TopDo I have to pay any taxes when using an offshore company?
Most of the offshore company formations that we offer are not taxed in the country of incorporation as long as they are not conducting local business within the jurisdiction of domicile. Sterling Offshore can incorporate tax resident companies, such as the Seychelles CSL, which enjoy low taxation on worldwide profits and access to double taxation avoidance treaties. Otherwise, your tax situation will vary depending on your country of residence, citizenship and domicile. Sterling Offshore recommends that you seek professional tax and legal advice in you country of residence to establish your specific tax consequences.
Back to the TopI live in an EU country. How does the EU Savings Directive 2005 potentially affect my offshore company?
The Directive is aimed at personal bank accounts only; although it is suspected that there will soon be a strong push targeting “controlled foreign corporations” similar to that of the USA. As long as you are incorporating and opening your bank account in a country that is outside the reach of the EU (such as Seychelles), the EU Savings Directive 2005 and future decisions by the EU will have no jurisdiction over Seychelles. Therefore, avoiding EU member countries as well as popular “offshore” jurisdictions falling under the EU Savings Directive 2005 such as Anguilla, Aruba, BVI, Caymans, Cyprus, Barbados, Turks and Caicos, Jersey, Guernsey, Gibraltar and Isle of Man is viewed by many to be a good long term decision for EU residents.
Back to the TopDoes Sterling Offshore offer tax or legal advice?
In short, no. Sterling Offshore consults with each client regarding the legal uses and tax consequences of offshore companies as described in the jurisdictions in which we operate. We also consult on matters relating to the use of tax resident companies and tax treaties to minimize overall taxation. It is still incumbent on the client to seek qualified tax and/or legal counsel in their own jurisdiction.
While we are well qualified attorneys and offshore consultants, we cannot offer tax and legal advice to clients in their jurisdiction of residence/citizenship/domicile. The tax codes and relevant laws and regulations are continually changing. They have reached the point in some countries that professionals focused strictly on tax law have a difficult time keeping abreast of these changes. In the USA, even advice from the IRS can be incorrect. The US General Accounting Office recently found that nearly 35% of the advice being given on matters of taxation by the Internal Revenue Service in answers to specific inquiries was incorrect! Perhaps even more perplexing is that incorrect information and interpretations given by the IRS cannot be used as valid defense if the taxpayer has to go to tax court in the US. Considering the global reach of Sterling Offshore, it would be impossible and inappropriate for us to advise clients on matters pertaining to foreign taxation and law..
Sterling Offshore strongly urges all of our clients to seek legal and/or tax advice from a qualified professional in their own country prior to entering into a relationship with us. Sterling Offshore is happy to offer our clients professional recommendations in places where we have relationships established. Similarly, we prefer to work with your attorney or accountant directly.
Terms and Definitions
Back to the TopWhat is the Memorandum of Association?
The Memorandum of Association (the 1st half of what is often referred to as Memo & Arts) specifies the name of the company, location of the registered office, company objects, liability of the members share capital particulars of the off-shore company.
Back to the TopWhat are the Articles of Association?
The Articles of Association (the 2nd half of what is often referred to as Memo & Arts) go into detail regarding the issuance of shares, voting and dividend rights of shareholders, restrictions on the transfer of shares, make up of the Board of Directors, the rules of meetings of the Board of Directors and shareholder meetings, and other similar issues.
Back to the TopWhat is a registered agent and registered office and must I have one?
Nearly every corporation, offshore or onshore, must have a registered office and agent in the jurisdiction in which it is incorporating. The registered office/agent is necessary for local government agencies to have a point of contact to send correspondence and also to provide a location to receive service of process when an entity is party in a lawsuit or summons. This is a requirement in all jurisdictions offered by Sterling Offshore.
Back to the TopWhat are the company objects?
The company objects specify the intended activities of the business. Many jurisdictions, such as Seychelles, allow a standard objects clause that allows for any lawful activity not expressly forbidden in that country or any other country where business is to be conducted.
Back to the TopWhat is share capital?
The share capital is the total value specified in a particular currency of the issued shares of the company. Most of the jurisdictions offered by Sterling Offshore do not require share capital to be fully “paid up” at the time of incorporation. Unless otherwise specified, Sterling Offshore will incorporate the new offshore company with the highest allowed share capital at the lowest available Government licensing fee.
Back to the TopWhat is a nominee director?
The provision of a nominee director is a completely legal measure generally used as a “place holder” on initial incorporation documents and as a tool to provide an extra level of privacy and confidentiality. In certain circumstances, a Sterling Offshore provided nominee director may sign basic contracts and invoices on behalf of the company but only in pre-approved cases. No guarantees are made that we will sign these documents and we retain full discretion concerning this service.
The nominee director signs a declaration of trust guaranteeing that no action will be taken on behalf of the company without clear instruction from the beneficial owner. At the written instruction of the client, the nominee director will tender his resignation immediately via a signed and dated letter of resignation.
Back to the TopWhat is a nominee shareholder?
A nominee shareholder may be corporate or individual and merely takes the place of the true shareholder on corporate documents and applications helping to maintain an extra level of privacy. A nominee shareholder provided by Sterling Offshore must sign a formal declaration of trust ensuring that they have no right to sell shares and may only act upon clear instructions from the shareholder.
A particularly attractive alternative to the nominee shareholder is the use of a Private Foundation to hold the company shares. Review the items under the Private Foundation option on the menu for more information.
Back to the TopWhat is a nominee account signatory?
Customers seeking the utmost in privacy and asset protection may elect to appoint a nominee account signatory to direct all bank and/or brokerage transactions. This is especially effective in conjunction with a Private Foundation holding a company with a bank/brokerage account in its name. Sterling Offshore will only provide an account signatory in conjunction with nominee director services.