An Offshore company is a Company set up outside your usual country of residence. Most Offshore companies are incorporated in countries which levy no (or very low) business profits taxes.
Offshore companies, or International Business Companies (“IBCs”) as they are more commonly known, are the most widely used International business vehicle. (Savvy businesspersons these days rarely use their onshore company to do business abroad, Click Here to learn why).
IBCs are commonly used for international trade or as holding vehicles for assets located outside your home country.
An Offshore company or International Business Company carries all the usual features & advantages of an Onshore company:
- It has Limited Legal liability (ie limited to the amount of share capital raised or assets owned by the IBC)
- It has a perpetual lifetime (the company doesn’t die when the Directors or shareholders die)
- Its business is managed by Directors who are, generally speaking, not liable personally for the company’s debts
- It can carry on a very wide range of business activities as of right
- It can issue shares to its stakeholders which can be privately traded
The key difference between an Onshore company and an IBC is in terms of tax liability (and ownership privacy).
Generally speaking IBCs do not pay business or corporate tax in the country where they are registered (instead they pay a very modest annual license fee) and in many Offshore Financial Centres no publicly accessible register of owners or directors is maintained. This makes IBCs highly attractive from both a tax planning and a privacy/asset protection perspective.
Other common features of IBCs include:
- Limited record keeping requirements
- No requirement to file an annual return
- Corporate Directors can be appointed (which has major privacy advantages)
- No tax is payable on sale or transfer of company shares
Best Offshore Tax Havens
- British Virgin Islands
- St Kitts & Nevis
- Hong Kong
- USA (Oregon, Delaware, Colorado & Arkansas)
Please also visit these pages on our website:
If you have any questions about how to form (or how to use) an Offshore company please Contact Us