An offshore company is an organization that has been incorporated anywhere in the world but not allowed to operate in the country of incorporation.
For instance, if your company operates in the United Kingdom, you can set up an offshore company in UK or another country such as Hong Kong, Seychelles, Panama, the UAE, and other nations that are hospitable to offshore incorporation. However, the offshore corporation will not be allowed to do any business within the registered jurisdiction.
Offshore company formation in Dubai, in particular, continues to be a popular move among international business owners since it offers several remarkable benefits which include the following:
1. Fewer tax obligations
Whether you own a large corporation or are running an SME, you need to pay different taxes in your home country. These include income, employment, and excise taxes, to name a few.
When you establish an offshore company, you will either pay fewer taxes or enjoy a tax-exempt status. This would depend on the country or jurisdiction you will choose.
If you set up an offshore company in the UAE, for instance, you will reduce your overall tax liabilities as promoted by the law. Because of this, you will be able to save money on your tax payments. You can then invest this extra money in other areas of your business.
2. Stronger asset protection
Having an offshore company will allow you to hold and safeguard your most valuable assets such as your intellectual property (IP), real estate investments, and owning the shares in the business and other financial product like bonds and funds.
In this age where frivolous lawsuits can come out of nowhere and from anyone, it is best that you take the necessary steps to protect your assets even before any legal issue comes up. When you transfer your assets via an offshore company formation, unscrupulous individuals who may have plans of suing you or your company won’t be able to get their hands on your valuable properties.
3. Improved privacy
If you need to keep certain information confidential, having an offshore company will help you with this.
Countries that are hospitable to international companies usually do not require foreign business to publish financial information or details of the firm’s shareholders and directors.
In most cases, offshore financial jurisdictions will not share this information with third parties unless completely necessary (such as in criminal investigations). Because of this, you can keep sensitive information confidential.
4. Low capital and maintenance costs
Forming an offshore company requires minimal capital. It won’t be as expensive as registering an onshore company.
In addition, as long as you work with a reputable agent, registering and incorporating your company offshore will be quick and simple. As a result, there will be a significant reduction in the costs that accompany the creation and upkeep of your offshore company.
It is also worth noting here that when you have an offshore organization, you will have fewer administrative duties. This is because there are often less legal obligations for directors and officers of this type of company.
5. Fewer reporting requirements
Most jurisdictions do not require a large amount of information during the initial setup and throughout the upkeep of your offshore company. As such, you won’t have to prepare a lot of documents when setting up your offshore business. Your annual corporate reporting requirements will be considerably reduced as well.
This is because many jurisdictions require corporations to pay a low annual license fee instead of requesting for annual reports and registration fees. As a result, you won’t have to produce audited financial statements or file financial documents with different governing bodies.
6. Global commercial and professional business
With an offshore company, you can conduct commercial and professional business worldwide excluding the jurisdiction of the registering authority.
Streamlining Your Offshore Company Establishment
To experience all the benefits that come with having an offshore company, you need to go through the whole setup process correctly. You can do this without all the hard work and stress by getting the services of an offshore company formation consultant.
- By working with the right service provider, you will get help with understanding the local laws and regulations that you need to take note of before establishing your offshore company.
- You have to be sure that your business plans and goals align with the jurisdiction you will choose to experience the aforementioned benefits. You will have an easier time doing this if you have a consultant who will explain all the important laws and the whole process of the offshore business setup to you.
- In addition, you will have a seasoned, knowledgeable agent who will collect, check, and submit all required documents to the requesting government body. This means you won’t have to go overseas and spend several days in your target country to present your documents and go through the other processes involved in the company formation.
Having a seasoned business consultant advising and helping you throughout the whole process means you can get your offshore company established within several days instead of weeks or months.
This is because the agent will know the exact requirements you need to submit that will streamline your application. The consultant will help you avoid mistakes that will delay the successful establishment of your offshore business.
With a reliable offshore company formation partner, your business operations overseas will be ready in no time.
Raj Herry is the Founder and Chairman of Flying Colour Business Setup Services. His extensive experience comes from more than 15 years in the field of company incorporation for Dubai Mainland, all Free Zones across the UAE and offshore companies worldwide. He also owns several business centres offering furnished and ready-to-move offices in Dubai.