Offshore company registration is often an extremely good choice for new business ventures. For some businesses the flexibility offered to the newly registered offshore company as well as the tax benefits make offshore company registration the best possible decision.
New business ventures that wish to register (incorporate) often choose to do so in a location which is not the home location of the beneficial owners. When this is done the company becomes an International Business Company or IBC. The IBC enjoys many benefits that onshore corporations do not. Offshore registration is becoming increasingly popular due to stringent government regulations and a changing world economy.
The largest benefit for the newly formed offshore company are favorable taxation laws. The corporation, which usually never receives income from the country in which they are registered, is not taxed on the income earned outside of that country. In other words, a company that is registered in the British Virgin Islands but has customers only in Europe will not pay taxes on that income. It is important to note that while double taxation treaties can be invaluable here, new regulations abound and several Western countries have become relentless in their search for income sources. Contacting a tax professional is highly recommended.
Another very important benefit of offshore incorporation is privacy. Offshore centers are well known for handling all of their customers with the utmost discretion. Either the beneficial owners of the company are not required to register their full names, or the use of nominees is utilized to protect their identities. Shielding this information from the public eye can be extremely useful for a variety of reasons. For example, think of the subsidiary of a large company may wish to make an acquisition ‘under the radar’. Or perhaps, a company seeks to do business without regional political issues interfering. In today’s ‘information age’ climate sometimes discretion is key to good business.
Sometimes the venture itself is limited and must use offshore incorporation. Onshore banking institutions are loathe to open accounts and allow for capital investments for companies that deal with e commerce. This includes companies that earn their income from adult entertainment, the sale of tobacco, dating services, travel websites, etc.
Sometimes the chief benefit for the offshore corporation is simply location. If your business has chiefly Asia Pacific customers, you may find it easiest to incorporate in the region so that the business itself is close to the population it serves.
Lastly, the offshore corporation has a kind of simplicity and astoundingly low overhead. An owner of a computer company based in Britain recently stated in an interview that he chose to incorporate offshore because his company exists only is name without the need for a huge office filled with secretaries and employees. He finds that because he does not need to file extra paperwork, have a huge office, or pay for extra staff, his overhead is almost nonexistent. That means that the extra money just flows right back into the company.
Various reasons make offshore corporation a fine choice for new business ventures. The ease and simplicity of incorporating in an offshore center are making it a more and more attractive possibility.
This article was written in association with Insurance Login.