Offshore Companies: Tax Busters in Disguise

By: Wain Roy

Setting up company away from your homeland might sound queer to many. But observing recent trends, there has been a rise in the number of people setting up companies offshore. Distinct legal entities, offshore companies or International Business Companies, are taxable individual bodies capable of performing business operations.

Setting up an offshore company is not quite a taxing affair- the entire process might even take just 24 hours! Prior to settling for the deal, it's very important to chalk out the pros and cons of its establishment, along with the benefits that would be drawn from it. To be precise, there are a number of financial and legal advantages that make opting for an offshore company viable.

To begin with, an offshore company helps to minimize the added burden personal taxation. For instance, residents of high tax countries like the US or the UK can plan to set up an offshore company in Antigua (or any other place) to route their personal income and profits and register a decrease in their personal taxation. Companies set in an 'offshore' jurisdiction are taxed either exempted or taxed low. As long as a company in an offshore jurisdiction does not enter into any business, it is able to avoid almost every local taxation.

An offshore company can thus be of great help to reduce or negate tax burden of an individual. An individual's decision to opt for a certain offshore jurisdiction depends on the country of which the concerned person is a tax resident of and the structure of the offshore company that would help to reduce the extra tax burden off your shoulders.

Company operation would be simplified to a great extent in case you decide to lay the foundation of an offshore company. The burden of account auditing and filing of records would be significantly minimized resulting in the overhead reduction and saving of time and energy as well. Offshore companies not only help to reduce overall company operations but also help to cope with other business requirements such as those related to financial arrangements etc.

In coordination with an offshore trust, an offshore company can be an effective tool to protect the assets of an individual, retaining a certain degree of control over the entire management at the same time.

Complete confidentiality and anonymity is achieved through the proper establishment of an offshore company. Since the underlying principle of an offshore company is extreme confidentiality, steps are taken to keep every detail out of public documentation and vigil.

To conclude, an individual's primary motive for setting up an offshore company definitely revolves around the motive of reducing the burden of extra taxes. In fact, such security and tax shelter is also offered by offshore banking. So whether you choose to establish an offshore company or to bank offshore, professional aid and advice is obligatory to ensure a legal operation as well as good and respected jurisdiction.

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