Offshore Company - Practical Uses of Offshore Companies

Practical Uses of Offshore Companies

Offshore companies are beneficial for many purposes including at least some of the following:

• 1. Consultancy, Professional Services, Agency

Professionals, consultants, artists and many self-employed individuals decide to incorporate a business representing their services to gain substantial advantages by working as employees or external consultants of offshore companies of which they may be the sole shareholders and, if they want to, the sole directors.

• 2. Employment of Expatriate Staff

Expatriates working overseas frequently benefit from being employed through an offshore employment/consultancy company. By not remitting the full salary it can minimise tax and avoid exchange control difficulties in the country of temporary residence. This arrangement is sometimes attractive for expatriates working in politically unstable countries.

• 3. Property Owning Companies

There are often significant advantages in using an offshore holding company for the purpose of holding property. The advantages of such an arrangement include the avoidance of inheritance tax, capital gains tax and the ease of sale which can be achieved by transferring the property owned by the company and reduction of property purchase costs to the onward purchasers.

• 4. Investment Companies

Funds accumulated through investment companies set up in offshore areas can be invested or deposited throughout the world. Whilst generally returns or interest payable in respect of these funds will be subject to local taxation, there are a number of offshore areas in which funds may be placed as bank deposits where the interest and/or the capital gains are paid and kept gross. To invest in global securities including mutual funds not available to "local" citizens. Offshore jurisdictions are typically less invasive allowing for aggressive and unrestrained Free Enterprise.

• 5. Copyrights, Patents and Trademarks

Offshore companies can purchase or be assigned the right to use copyright, patent or trademark. Royalties can then be accumulated offshore although often royalties may suffer withholding taxes at source. An interposing holding company in some cases may allow a reduction in the rate of tax withheld at source.

• 6. Privacy

A high net-worth individual can save professional fees and unwanted publicity by owning property or other assets through an offshore company. Many jurisdictions require company accounting records to be published, but jurisdictions can offer privacy if they do not require offshore companies to publish accounting records, and the name and details of their shareholders.

• 7. Protection

To file first position liens against assets and property closing the door to predatory litigation before it begins. To segregate high-risk investments from other more secure holdings. To protect retirement funds from possible bankruptcy. To provide for the transfer of assets for the next generation in an efficient and discreet fashion. Nominee directors and officers can allow you to conduct business transactions for your benefit while you remain anonymous. To access your funds with corporate debit or credit cards thereby maintaining absolute confidentiality.