FAQ About Offshore Company Formation
Worldwide Corporate Services aims to ensure that our clients are well informed about every aspect of offshore company incorporation. We do this because one of our primary aims is to ensure that clients are able to benefit fully from the offshore company incorporation services we offer. Worldwide Corporate Services guarantees that you will enjoy business growth and a maximized return from your offshore company formation expenditure. We want to ensure that our clients have complete peace of mind through out the offshore company incorporation process. Our FAQ page touches on every question you might have about offshore companies. It covers everything from the definition of offshore company formation to the potential benefits you can obtain.
At this junction, it is worth mentioning that we at Worldwide Corporate Services provide our service in compliance with all legal requirements and guidelines on offshore company formation. All the third-parties we have affiliations with are also dedicated to ensuring that all legal provisions are met. Furthermore, perhaps the most important question is how offshore company formation can benefit your business. In this regard, we would like to highlight that the advantages you can enjoy go beyond just tax benefits. There are other benefits you can obtain such as asset protection, unrestricted flow of capital, transfer of assets, anonymity amongst others. Contact us for any offshore company formation questions you have which have not already been answered by our FAQ page. We look forward hearing from you and we appreciate your interest.
What is "going offshore"?
It is the utilisation of out of country corporations, trusts, partnerships, banks, funds, and management companies, to legally safeguard assets, minimize taxes, plan for the future and take advantage of global investment opportunities. What are the mistakes people make when going offshore? Proper structuring and managing of investments and transactions is the key to successful offshore investing. Improperly structuring and managing investments can result in lower investment returns, significant risks, unnecessary tax liabilities and even civil and criminal penalties for the international investor. This is why it is imperative to have a qualified professional structure your offshore programme, and then invest only with established and reputable banks, brokers, and financial service providers when investing offshore.
Isn't it illegal to move assets offshore or have 'offshore bank accounts'?
It is legal to have accounts, funds, reserves, liabilities, assets etc. almost anywhere in the world. When you do not declare assets or profits, that should be declared according to your domestic tax code, (IRS, Revenue Canada, Inland Revenue etc), you are subject to certain penalties and fines or more. The key elements are if the assets and profits are 'reportable items' in that current year.
Setting up offshore is not illegal; however, withholding information about your offshore investments is illegal in some countries. The question of legality often arises from propaganda supported by high-tax jurisdictions to keep their residents (and their tax money) at home. An offshore jurisdiction should be perceived as a foreign country - but with certain advantages. These can take the form of banking secrecy laws, advantages in forming companies for international trade or investment operations, no interest tax, no inheritance taxes, no capital gains tax, no individual tax, and many others. Depending on your personal needs or preferences, there will normally be one or more offshore jurisdictions offering the services you are looking for. We would suggest that you contact us to discuss your personal requirements in more detail.
Isn't 'going offshore' only for the rich?
This might have been so a long time ago. However, in this modern age with the high quality of services available, offshore is now a relatively simple and affordable procedure for almost anyone. Once having moved all or part of your business offshore, the savings made by the low-tax or tax-free status opens up a whole new world of investment and business opportunities.
Can I move my existing business offshore?
Some companies move parts of their business offshore almost immediately as separate subsidiaries and profit centres. However, you will need to look at your business with a view to re-organise your activities and maybe look for new business opportunities on a cross-border basis into other countries. The possibilities are quite extensive, and we are able to assist you when it comes to applying offshore advantages to your existing company operations.
Are there any other advantages besides tax?
There are many advantages including: Anonymity, asset protection, foreign property holding through a company in a third country, limiting of liability in business transactions, unrestricted flow of capital, transfer of assets etc.
What is the future of the offshore industry?
Since the 911 incident, the international crackdown on money laundering has created much debate in the offshore industry, primarily between jurisdictions eager to comply with international standards of anti-laundering regulation and those that are less co-operative. The driving force behind those initiatives, have been influential organisations such as the Financial Action Task Force (FATF). The FATF was established by the G-7 countries in 1989 and is an inter-governmental body whose purpose is the development and promotion of policies, both at national and international levels, to combat money laundering and terrorist financing. As the FATF seek to apply more international pressure, it will become increasingly difficult for the less well-regulated regimes to do business
Another major issue is the exchange of information, the profile of which has been raised in the current climate. The recently agreed EU Savings Tax Directive will change the face of the offshore industry, although to what extent is somewhat harder to predict. Previously no information was exchanged automatically in Europe unless there were concerns about the activity on an account. However, with the introduction of the EU Tax Directive, customers living within the EU are likely to be forced to engage with these issues, either by having to pay a withholding tax or agreeing to exchange information
Singapore and Hong Kong are one of the only respectable and well-regulated international banking centres not subject to automatic exchange of information on savings accounts by EU residents. To this effect, Hong Kong will soon become a much more important jurisdiction for tax planning as it is one of the only 'offshore' banking centres which will not be subject to the new directive on withholding tax which will affect not only the EU Member States but 'all territories under their control', Switzerland and the USA.
For clients wishing to register an offshore company, Hong Kong should also be considered seriously as it is one of the few respectable locations in the world that tax on a 'Territorial Basis'. Consequently, this means that corporation tax is ONLY charged on profits derived from a trade, profession or business carried on in Hong Kong . Income sourced elsewhere, even if remitted to Hong Kong , is not subject to profits tax. There is also no exchange or capital controls and no taxes on capital gains, dividends and interest earned.
What is an International Business Corporation?
An International Business Corporation (IBC) is a corporate entity established in an offshore tax haven. The tax haven has no tax on the business and investment activities of the IBC. Although an IBC alone cannot provide an effective offshore investment programme, IBC's are often an integral part of an offshore investment strategy. This is the most common type of entity used
What is the best offshore centre or Tax Haven to use for asset protection and or estate planning?
Most modern International Financial Centres are alike, offering the services and products available through government regulation. Because of this certain tax havens have reputations that may or may not be true today, while others have issues with privacy, confidentiality or specific rules for information. Banking rules and regulations are also changing and will have an impact on the jurisdiction we choose.
You need a modern business and communications infrastructure with moderate fees. You need not invest or run your business out of the same country that you bank with. We select the 'best' of each for our clients. We keep up to date on all haven developments around the world and have relationships with institutions, legal consultants and advisors worldwide. Each entity we form is tailored to the goals and transactions of each client and we advise you on strategies and solutions
Is my money safe offshore?
Many financial experts believe that offshore investing when done through reputable companies is actually safer than investing onshore. Higher reserves and greater liquidity ratios are usually found in established offshore financial institutions as compared to their onshore counterparts. In secure offshore havens these problems are nonexistent because of stricter banking laws, lower costs of operation, lower taxation, conservative investment policies, lack of stockholder pressure to maximise profits (which results in higher risk taking on loans and investments), and comparatively lower executive salaries and bonuses in offshore havens. Additionally, further safety and protection of investments and assets against lawsuits and creditors can be achieved offshore.
How can offshore investments and assets be protected against lawsuits and creditors?
Complete protection of investments and assets from lawsuits and creditors can be achieved through properly structuring offshore investments and assets. Structures for investment and asset protection include Asset Protection Trusts (APT), Limited Liability Companies (LLC), International Business Corporations (IBC), annuities and various types of insurance.
Need more information?
Please contact us by phone on 0870 351 0012 or by e-mail at info@worldcorporate.co.uk
