How To Use An Offshore Labor Hire Company To Save On Employee Costs

Recently I was approached by a prospective client looking to reduce additional (prohibitive) expenses over and above wages that usually apply “onshore” when one hires workers.


Via strategic deployment of an Offshore Corporate Structure there is the potential to save money here and in two ways.


What you could do here if you are/were in such a position is:


  1. Incorporate a tax free Offshore Company (“IBC “ie International Business Company)
  2. You/your firm would secretly be the owners of the IBC
  3. You/we would set up a bank account and an email address for the IBC Offshore
  4. You would have the user name/passwords for the IBC’s bank account and email account (and would have 100% control of both)
  5. Your workers/contractors would invoice and or get paid by the IBC
  6. The IBC would invoice your local/onshore business each pay period for the cost of providing/managing your labour force.


You would probably want to characterize the IBC as a Labour Hire Company. For more information on what a Labour Hire Company is and how it can save you money check here:


If you set this up (a) you should be able to avoid having to pay high taxes, worker’s compensation insurance, superannuation, and social security contributions etc above payroll for your workers and (b) you should be able to avoid having to pay an independent firm a commission for invoicing.


Local laws can have an impact. Hence it would be wise to seek local legal, tax and financial advice before committing to create such a vehicle.



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