WHAT IS "OFFSHORE"?
It is any country other than the one where you live; that is you are from outside the jurisdiction that you choose (both as a citizen or a resident) you can obtain some special financial or asset protection considerations. If you live in the Seychelles, other countries are offshore. If you live in Germany other countries and the Seychelles are offshore.
WHY INCORPORATE OFFSHORE
Offshore companies are used to protect assets and provide corporate structures necessary for the efficient operation of international companies. We use Offshore company for:
PROFESSIONAL SERVICES COMPANIES
If you are offering your services internationally, your company employs the individual and contracts with the buyer of your services. The fees earned are collected offshore tax free. Remuneration to the individual can be structured as to minimize personal income tax in the country of residency.
One of the most popular uses is in import/export and general trading activities. The Offshore company would take orders from the supplier and deliver the goods to the customer, then the offshore company would invoice the customer directly. The profit from the selling/purchase prices is collected in the tax free offshore company.
Such structures are popular for corporations and individuals to hold investment funds, including bonds, equities, cash and precious metal etc.
Apart from tax minimization, this structure provides for privacy and asset protection.
It is a company that owns other companies, normally these companies do not produce goods or services, its purpose is to own shares in other companies. Some uses of holding companies are to own and fund subsidiaries in different countries, implement joint venture projects, and so on.
DOT COM COMPANIES
With the development with offshore companies, selling and buying software and other technologies have been active amongst many clients. Such structure is useful if you are engaged in developing and implementing software solutions aimed at the public; each technology is developed through its own offshore companies, this isolate each project in its own company, for asset protection purposes.
PROPERTY OWNING COMPANIES
Owning real property and land by an offshore can have major tax advantages, such as inheritance tax, property transfer taxes. It can also facilitate sales that is by transferring the title to the individual owner, therefore reducing legal and other administrative costs.
It is very common worldwide to own or charter ships and pleasure yachts. The companies can accumulate profits in the tax free jurisdictions, furthermore if each ships/yachts are placed in separate offshore company, it can obtain asset protection by dividing liabilities to each individual ship.
These offshore companies can be use to employ expatriate working on assignments throughout the world. This simplifies the administration of travel expenses, payroll, and the exchange problems. It also reduces the employee's tax liabilities.
INTELLECTUAL PROPERTY AND ROYALTY COMPANIES
The offshore companies own these intellectual property and royalties received for Technology rights, music, patents, trademarks, IT software, literature and copyrights. Often these rights are held in the form of a trust or foundation for asset protection purposes.
ASSET PROTECTION COMPANIES
Any individual who have income or assets over US$100,000, you should have an offshore company and offshore bank account for asset protection purposes. You should consider a Trust which would own the offshore company, this will provide greater protection and least expense. Most offshore jurisdiction require that a local attorney must be retained and paid up front, often a bank bond has to be placed with the government, to implement a lawsuit. It might take years to get into court in certain offshore jurisdictions.