Are you wanting to set up a tax-free Offshore Company without having to meet onerous Account Keeping requirements?
Just about every Offshore jurisdiction these days has Account keeping requirements of some description. It’s been one of the biggest changes to the Offshore Incorporations world since I first stated working in this Industry almost 25 years ago.
Most jurisdictions require, as a minimum, that soft copies of each Company’s “Financial records” be stored at the Company’s registered office (and in most jurisdictions the definition of “Accounting records” includes, bank statements, suppliers bills, invoices sent to clients along with Books of Account). Indeed, many jurisdictions now require full financial reports to be prepared and or for annual returns to be filed!
The good news is there are still several jurisdictions that either have zero Accounting keeping or very minimal Account keeping requirements. They include:
The Marshall Islands: https://offshoreincorporate.com/marshall-islands-ibcs/
Samoa: https://offshoreincorporate.com/samoa-international-business-companies/ &
Nevis: https://offshoreincorporate.com/st-kitts-and-nevis-offshore-companies/
Let’s examine the features of each in terms of Account Keeping requirements…
THE MARSHALL ISLANDS
The relevant law in the Republic of the Marshall Islands (“RMI”) provides as follows:
Every domestic corporation shall keep reliable and complete accounting records, to include correct and complete books and records of account.
Accounting records must be sufficient to correctly explain all transactions, enable the financial position of the corporation to be determined with reasonable accuracy at any time, and allow financial statements to be prepared. Additionally, every domestic corporation shall keep underlying documentation for accounting records maintained pursuant to this sub- section, such as, but not limited to, invoices and contracts, which shall reflect all sums of money received and expended and the matters in respect of which the receipt and expenditure takes place; all sales, purchases, and other transactions; and the assets and liabilities of the corporation.
A resident domestic corporation shall keep all accounting records and underlying documentation as described in this subsection in the Republic. Upon demand of the registered agent for non-resident domestic entities in connection with the performance of its audit functions or pursuant to a valid governmental request made to the registered agent for non-resident domestic entities, every non-resident domestic corporation shall produce all accounting records and underlying documentation required to be maintained pursuant to this subsection to the registered agent for non-resident domestic entities in the Republic.
Simply put the latter provision of the legislation, ie as highlighted above, would appear to exempts Marshalls Islands IBCs from keeping to keep any financial/accounting records in the Marshall Islands!
NEVIS
Accounting requirements in Nevis are thankfully not as onerous as elsewhere.
Every Nevis entity is required to maintain sufficient and accurate records from which accounts might be prepared should the Directors or Shareholders choose to do so. In other words, there is no absolute requirement to do so.
Unlike places such as BVI, there is no requirement to file any accounting information with the Registered agent, and there is no public filing of accounts, schedules of assets/liabilities etc.
That being said, each Nevis entity is required to file a (simple one page) annual return in St. Kitts & Nevis. Where the management of the entity is conducted outside of St. Kitts & Nevis, the required return is informational only, and need not include any financial or transactional information. A sample of the current return can be viewed here: https://offshoreincorporate.sharepoint.com/:b:/s/OffshoreCompaniesInternational/EY9qhVbBnDxPqIoqK7hclxgBGxN7pKymMzwgImGS_utnCg?e=PQhIqK
To summarize each Nevis Company is required by law to keep sufficient financial records such as would enable Books of Account to be drawn up. If you do keep Books of Account, you are not required to store copies in Nevis. That said the Nevis Regulator from time to time asks us to provide financial records for various entities. If this occurs we would relay this request to you and would ask that you provide the information as requested in a reasonable timeframe. You will also need to sign and submit to our office a Financial Declaration Form once yearly. You can view a copy of the form via this Link: https://www.dropbox.com/scl/fi/tfl8w0owzoyvy7sshynim/ATSL-Financial-Records-and-Documents-Declaration-Form.pdf?rlkey=q58kcurf7s5krc8fzim806otu&st=e9jhlbdc&dl=0
SAMOA
Every company incorporated in Samoa is required to keep and maintain accounting records:
(a) to disclose the current financial position of the Company;
(b) to enable the directors to check that any accounts prepared by the Company
comply with the laws of Samoa;
(c) to allow for the preparation of financial statements;
(d) to detail the following;
(i) all sums of money received and expended and the matters in respect of
which the receipt and expenditure takes place;
(ii) all sales and purchase and other transactions; and
(iii) the Company’s assets and liabilities, or other arrangements; and
(e) for a period of at least 7 years from the completing of the transactions or
operations to which they relate.
Additionally, the Company must inform OCI in writing of the location where the accounting records are to be kept.
Should there be any changes to the location, the Company must inform OCI in writing of the physical address of the new location of the records within 14 days of the change of the location.
Accounting records may required by the Samoa Financial Services Authority and upon request they must be made available to comply.
SUMMARY
So that’s a wrap then! It’s surely refreshing to know if you’re looking to set up a tax free Offshore Company but don’t want to have to deal with time consuming Account Keeping requirements that there are still some options available to you!
That said, there are lots of other factors that come into play when considering where’s the best place to set up your tax free Offshore Company. The good news is that, at OCI, we provide free guidance (from our expert In-House Lawyer!) on where to set up (and how to structure) your Offshore Company!
Would you like to know more? Then please Contact Us:
info@offshorecompaniesinternational.com
DISCLAIMER: OCI is a Company/Trust/LLC/LP/Foundation Formation Agency. We are not tax advisers or legal advisers. You are advised to seek local legal/tax/financial advice in regards to your local reporting/tax requirements before committing to set up or use an Offshore Company or other entity.
