Group Chesterfield register and incorporate hundreds of international business entities every year in all offshore jurisdictions. We also provide services such as opening and administration of bank accounts, mortgages, property transactions and nominee and registered agent services.
What is an offshore company?
When considering the formation of an offshore company there are many factors determining the most suitable company type and jurisdiction, outlined here is a basic summary of what an offshore company is to help you with this decision.
There is no precise legal definition, but an offshore company is, in reality, a company formed in a jurisdiction outside the home country of the owner. The term is generally taken to mean a company incorporated in a territory which may be beneficial for taxation and which could impose a zero or low rate of tax, or perhaps indeed exemption from tax.
Historically there may have been qualifying conditions attached to such favourable treatment, such as ownership by non-residents, but the international community is moving rapidly in the direction of the same tax treatment for all companies, by whomsoever they are owned.
Chesterfield have expertise in setting up companies and corporate structures specifically tailored to the needs of our clients. We have a talented and experienced team of salespersons and administrators who are skilled in the formation and running of various types of companies including, but not confined to, Limited Companies, Limited Liability Companies, Limited Partnerships, Limited Liability Partenerships, Companies Limited by Guarantee and Hybrid Companies.
Tax Neutral, zero tax and low tax
Tax-exempt companies are a dying breed. Resulting from the move towards the same tax treatment for all, mentioned above, they are being replaced, in many jurisdictions, by zero tax companies. One of the perceived benefits of a zero tax regime is that it provides a tax neutral platform to conduct international business.
Some territories have both tax-exempt or low tax regimes and have also negotiated special tax treaties for the avoidance of double taxation by local companies trading with the treaty partner country. These countries typically impose tax at very low rates on companies qualifying for treaty benefits.
In some other countries only local source income is taxed. A company may accordingly be based in a country, but pay no tax there if its profits are generated from activities elsewhere.
Almost all of the major trading nations, certainly most of the E.U. countries and the U.S.A. use tax incentives to try to attract foreign investment by offering special tax treatment for certain activities. Examples are holding companies, headquarter companies and treasury and finance operations.
A blend of onshore and offshore companies can often be used to collect income which qualifies for double tax treaty benefits and route it to a tax neutral country from which it can be re-invested.
Offshore company formation benefits
Offshore companies are used by both individuals and businesses, and some of their reasons for doing so are listed below.
- Tax saving or deferral
- Asset protection
- Increased privacy
- Risk management
- A more favourable business climate
- Less bureaucracy
- Exchange convertibility
- No restrictions on the remittance of profits and capital
- Security of property rights
- Political stability