Offshore Company Benefits
Offshore company formation provides several potential benefits over the traditional “onshore” corporation including all of the following:
· Protection from lawsuits· Privacy
· Simplicity
· Minimizing Taxation
· Asset Protection
Offshore Company Formation and Asset Protection
Placing your personal assets into a separate legal entity is generally a good idea whether you place them in a traditional company within your home country or you place them in an offshore company. Of course, offshore companies and assets are much more difficult to locate and can provide protection against frivolous litigation suits.
Offshore Company Formation and Legal Protection
Offshore company formation provides an additional layer of legal protection by removing your name from your assets. Lawyers typically perform a preliminary search to locate assets that may be tapped in the case of a winning judgment. Utilizing offshore companies by titling assets and transferring them to your offshore company can be a valuable tool in deterring these lawyers; preventing lawsuits and potential adverse judgments.
Bringing litigation against properly structured offshore companies, offshore trusts and offshore foundations is more difficult due to the added difficulty of locating foreign assets and subsequently proving ownership of them. Further, in many jurisdictions, the lawsuit would have to take place in the country of incorporation since foreign judgments are not recognized except in cases of money-laundering, weapons and drug smuggling, and criminal tax fraud. It is important to note that tax fraud is an entirely different term from tax evasion and tax avoidance. Tax evasion is only an administrative offense in many countries and tax avoidance is an entirely legal means of minimizing personal and corporate taxes. Often, these terms are conveniently intermingled by Governments of high-tax countries.
Privacy/Anonymity
Utilizing an offshore entity to conduct your business, bank transactions and/or personal financial investments provides additional privacy and anonymity. In many jurisdictions, the company officers, shareholders and beneficial owners can either be omitted from the incorporating documents and/or are not on any public record at all.
Simplicity
One often overlooked aspect of offshore company incorporation is the relative simplicity of the process. Offshore company formation in many jurisdictions is a quick and seamless process and Sterling Offshore aims to make your offshore incorporation as simple as possible. Additionally, ongoing requirements for offshore companies are often more relaxed than for “onshore” companies.
Minimizing Taxation
Offshore companies established in low or zero tax jurisdictions may reduce, delay or even completely eliminate the tax burden on the company. Of course, there are often taxes to be paid in the country of citizenship/residence or business domicile, but offshore company incorporation may minimize these taxes. For instance, the taxpayer may be able to delay payment of the taxes until gains are repatriated allowing the gains to compound over time.
Tax treaties may be utilized to reduce withholding rates on dividends, royalties and interest as well; however, in order to access these treaties, the company generally must be tax resident in the country of domicile. The Seychelles Special License Company (CSL) is one such entity which may access the growing list of tax treaties signed by Seychelles with countries such as China. Sterling Offshore is developing its worldwide network to include strategic jurisdictions providing access to treaties with key countries.
"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