Introduction
Are you an investor contemplating the potential of registering an offshore company? Registering an offshore company is a perfect choice for investors who want to expand their operations, save taxes, register their business quickly, and secure their assets. Offshore companies are often registered in countries with advantageous legal frameworks, low or no taxation and corporate-friendly environments.
But do you know how you can set up an offshore company? Our experts from OnDemand International can assist you with the various steps to set up an offshore company. In addition to that, we will also be explaining the rules as well as the steps to set up an offshore company here in this article.
Steps to take before starting the process
Here are a few steps you need to take before starting the formation process,
Although there are many solid offshore service jurisdictions that you can choose for your offshore business, there are some things that you should bear in mind before choosing one:
- One should be sure of the reputation. The best way to judge this is by talking to other business owners who have incorporated an offshore company there or by checking the reviews given by other clients.
- Something else to watch out for is the cost of the firm’s services in comparison with their competitors. Offshore companies differ in prices and services offered, so it is wise if you compare different companies to get the best rates.
- Another thing to look at is the physical location of your offshore company. Some places will be more convenient for you, depending on where you are based. For instance, if you need a company registered in both Cyprus and Belize, it would be better to choose a company that covers both these jurisdictions.
- Finally, one should be sure that the jurisdiction has the experience, enough legalities, and resources for your business needs. This can be determined by finding out how long they have been operational as well as how big their clientele is.
Step 1: Choose a company structure
Choose the most relevant company structure for your offshore business-
An offshore company is a very broad term. Based upon the jurisdiction you have opted for, the flexibility of the company structure you expect, and some other parameters, the offshore service provider can suggest the best-suited type to make the most of your benefits. And for that, you can contact ODINT consulting any time.
The legal form of your business is also an important factor in determining how successful you can avoid taxes. Here are major company structures you can adopt-
1. International Business Company
An IBC is a type of offshore company, usually incorporated in a tax-haven jurisdiction. The IBC structure is a relatively recent development in the tax haven industry and has been widely used for asset protection, wealth management, and estate planning purposes.
The term “international business company” is one of several names used to describe a tax-neutral organization. Other names include international business corporation (IBC), registered foreign company (RFC), exempt commercial company (ECC), foreign limited-liability company (FLC), offshore corporation, or offshore limited liability company (OLC).
Taken together, these organizations are often called “offshore companies” or “offshore corporations.”
- As an incorporation vehicle, the IBC offers several important advantages to businesses and investors. The primary benefit is that the ownership of an IBC is not publicly disclosed, which can be significant for entities that may have political or security sensitivities. In jurisdictions where transparency is not required by local law, an IBC may also be used to circumvent local disclosure regulations.
- An IBC has very flexible management and ownership structures, so they are often popular with investors who wish to maintain anonymity or otherwise prefer to avoid any public association with their commercial activities. For example, in several jurisdictions, IBCs are regularly used for trust structures, including private foundations and family trusts.
- An IBC can be incorporated with almost any type of internal management structure and any type of shareholder control structure. The choice as to whether the company will be managed by its directors or whether it will have dispersed powers with no board of directors at all rests solely with the incorporator(s). Most jurisdictions only impose restrictions on certain types of business activities, so there is a great deal of flexibility in this regard as well.
2. Limited Liability Company-
An offshore LLC is the same as an onshore LLC. However, they do differ in certain areas.
The major features of an offshore Limited Liability Company are-
- It is a mix of private and corporate ownership
- An offshore LLC will be exempted from paying taxes in the jurisdictions where they are incorporated.
- It provides tough security to the members of the company and secures their interests.
- An offshore LLC does not have any director or shareholder; instead, they have members.
- Unlike an onshore LLC, the offshore LLC requires only 1 member to be there.
Has fewer legal procedures and more benefits.
3. Private Limited Offshore Company
A private limited offshore company is the one with the below-stated characteristics-
- With members not exceeding 50 and privately held business
- Limited liability on shareholders
- Just like an onshore Pvt. Ltd., it can also enter into contracts, can sue others, and be sued. It will be treated as a legal entity.
- Take the benefit of lower tax rates and better protection of assets.
- However, it does restrict its shareholders from transferring their shares.
After choosing the company structure for your offshore business, the next step in the procedure is to find a suitable jurisdiction that aligns with your needs and gives you the best benefits.
Step 2: Selecting the Best Offshore Jurisdiction
Offshore jurisdictions are used by entrepreneurs to incorporate companies when they choose to locate their business in a tax-friendly nation, where there are fewer challenges for foreigners and more support for foreign investors. Offshore jurisdictions can be regarded as places with the best business climate.
- The most important factor that one should consider is an offshore jurisdiction’s reputation. The reputation can reflect the offshore jurisdiction’s soundness and stability, which can result in the feeling of trustworthiness, and the potential of your business growth.
- One should take into consideration the health of the economy, politics, legal framework to know which country aligns the most with your business’s needs.
- Another factor that should be taken into account is the country’s infrastructure. Good quality infrastructure system will enhance the competitiveness of your corporation.
- For example, if entrepreneurs want to set up a factory in a specific country, they must check whether the location has strong transportation services with efficient logistic systems. In addition, you also need to find out whether there are any visa restrictions or restrictions on land ownership before choosing where to incorporate your company.
Choosing the right jurisdiction to set up your business offshore can be a real challenge. Many companies are reluctant to start a new project, especially if they have no experience in the field. As a result, it may be better to ask for professional help to avoid future problems or legal issues.
Trying to find the best offshore company formation provider is like trying to find the best personal computer or mobile phone. You will face many different brands, each one of them promising the best performance and quality. It is not necessary to waste so much time and money on offshore company formation research as there are quite a few good providers that you can count on.
Despite being more expensive than other services, these companies possess all the required resources to set up an offshore structure for your benefit – with no hidden charges attached. This highly efficient solution is ideal for companies that need to establish a presence in multiple jurisdictions and want their specialized support team at hand.
Now that you have decided on the type of offshore company and the best jurisdiction for it let’s move on to the next step of incorporating an offshore company.
There may be certain rules and regulations that are particular to each country. And to know more about that, it is better to consult the experts.
Step 3: Choosing the Name for your Company
1. Choosing the perfect name
Choosing the name is the most crucial part of incorporating, as there are strict guidelines that restrict you from choosing your desired name. The guidelines are as follows-
- Before you can start the process of establishing your offshore company by incorporating a company, you need a valid and unique name. The name should be unique and not be identical or similar to any existing or already registered company name at the Company Registry.
- The corporate registry will always check for the uniqueness of your future company’s name before approving it. Your chosen business name should not contain any prohibited or restricted words such as Bank, Assurance, Insurance, Royal, University, Trust, Building Society, Cooperative, Foundation, Casino, Fund, Securities, Pharmacy, etc.
- After choosing your desired company name, we always recommend that you also do a company name search/check the name availability at local business registry offices of your offshore jurisdiction. You should avoid any legal problems later on by doing this simple due diligence step before you proceed with your company formation.
- The name of a limited liability company must include the words “Limited Liability Company” or the abbreviation “Ltd. Liability Co.” or “Ltd. Co.” at the end and cannot be identical to existing registered trademarks. Otherwise, it will be rejected by the Registering Authority and will not be accepted in the system.
- Trouble can also arise from names that are too close to that of another company.
Once you have chosen the name, the next step is to fulfill the legal requirements-
Step 4: Submitting the Required Documentation
2. Fulfilling the legal requirements
In every case, banks will require certain formalities to be completed to ensure the legitimate use of companies.
Such regulations differ from each jurisdiction, but certain documents remain the same in every jurisdiction, and if you are planning to incorporate an offshore company, you should fulfill all the conditions.
Such general documents are-
- A formal copy of your identity proof
- A formal copy of your residential address
- A formal and elaborate copy of your company’s operations and objectives.
- If any of the members is a body corporate, then in addition to these documents, you also have to submit the company’s incorporation certificate, memorandum of association, and each shareholder and director’s identity proof.
Once you are done with all the formalities, the next step is to finally get your company registered by delivering the necessary documents and complying with the conditions to the registry.
3. Sending the documents
In the offshore location, it is necessary to send all the documents you have prepared to the company registry. The company registry will check your documents, and if they are in order, they will register your company. The registration procedure normally takes from 2 to 4 weeks. After you receive proof of your company’s incorporation from the company registry, you can go ahead and open a bank account for your newly formed offshore corporation in your offshore location
The Company formation procedure is not a simple process. It does require considerable time and effort. If you are not prepared to invest the time, it may be best to consult a professional company formation agent, who will take care of the whole process on your behalf.
Let OnDemand International take the job and do it smoothly and efficiently for you.
Why OnDemand International is the best to incorporate your offshore company?
Offshore Company Formation is a delicate process that requires not only knowledge and experience but also utmost attention and care.
Odint consulting will typically do everything for you instead of the fact you will do such step by step by yourself. All you need to do is to discuss with our experts to acknowledge your case, collect the required documents listed above, and send us via email. We then submit your documents to the Company Registry of the offshore location that you have opted for registration.
We are a team of professionals with a great deal of experience in offshore company formation and corporate services, helping companies to set up business in safe and stable jurisdictions. We have fully satisfied clients all over the world.
We believe that professional service is our responsibility as well as contribution to business development. In the process of providing our services, we are committed to offering you an efficient, high-quality service.
Conclusion
An offshore company is a legal entity formed under the laws of a country other than the country of residence of the shareholders and directors. This offshore company generally provides its shareholders and directors with more flexibility, anonymity, and confidentiality than those available to them through their country of residence. In addition, an offshore company formation process is generally less complex but highly time-consuming.
The process to incorporate an offshore company goes like the first step is to choose the relevant structure for your offshore company. The next step is to choose the best jurisdiction that aligns with your requirements and gives you the best results. The next step is to choose the most relevant name for your company. And the last step is to fulfill all the requirements, fill out all the necessary forms and submit them to the registry.
As you know by now, the registration of an offshore company is a rather tedious procedure but fear not because Odint consulting is here to make it easier for you!