By offshore company we mean a company that is established abroad. Generally, we refer to far countries, with simplified tax systems or limited tax burden, simple bureaucracy and privacy guaranteed by bank secrecy.


The meaning of offshore companies

The offshore company is the kind of company registered abroad- according to the laws of the same country- but working outside the jurisdiction of its establishment. It’s different from onshore company that instead operates in the jurisdiction in which it’s constituted. The choice of opening an offshore company, with the support of a trust company that makes a consultation for it, is connected to the nature of business, while at the same time, optimizing tax burdens and finding better conditions.

Offshore company establishment

Open an offshore company in a tax heaven is easy and quick, useful mainly in contexts in which the business venture and economic development are not encouraged. Another advantage is the quick procedure to open an offshore company: all can be made through correspondence at low costs, and in some countries it’s even possible to open an online offshore company.

The only exception is represented by Switzerland: the establishment of a Swiss company, involves slightly different and articulated procedures, if compared to other tax havens.  In Switzerland the required initial minimum capital is a little bit higher, as well as the registration and incorporation costs for offshore companies. Most important today Swiss banks open offshore accounts only to customers and transactions whose amounts overcome one millions of dollars.

Whats the meaning and why choose offshore solution? – Many colleagues think that offshore companies differently from onshore companies are born exclusively to elude taxes, but this is not right. Through such legal structures is surely possible to move some important activities in foreign jurisdictions, and thus doing you can get tax saving and a major protection of assets from creditors’ advanced demands or in divorce proceedings. According to the legislative system adopted by the jurisdiction, a Tax Haven can offer better conditions for the establishment of economic enterprises or natural persons, providing important tax exemptions for whom opens offshore companies, like in the Principality of Monaco, where natural persons incomes are not taxed. Instead, if you open an  offshore company in Panama . incomes of foreign origin are not taxed. Anyway, any tax haven has its own laws to intercept specific clients, whose interests vary from tax exemption to tax reduction on activities elsewhere too much fiscally burdened to be competitive. Offshore world is characterized by an aura of mystery, although some recently published estimates have highlined how 60% of capitals, at global level, are moved through thee small centers, where customs officers, politicians, rich people, as well as professionals and small companies with turnover of more than 40.000 Euro per year. By using some offshore companies settled in the right jurisdictions, big companies manage to optimize their tax burden, showing at a loss the branches located in high taxation countries and, on the contrary, getting profits – concealed to the aggressive tax administrations- through shell companies. The advantages of offshore companies are undoubtedly suitable also for small companies, as the international tax planning is available also for small entrepreneurs, at low costs, from 3000 € onward.

Tax engineering: What is it about? – To grasp the idea, start from the concept that tax avoidance, differently from evasion, is not a punishable operation: by the correct evaluation of advantages for offshore companies in the jurisdictions, in fact, it’s possible to make a correct tax planning- completely legal- to reduce tax burden of our own offshore company thanks to an aimed consultation made for such a company by specialized companies. On the contrary, tax evasion is the attempt at avoiding tax payment, behavior that’s considered illegal. Furthermore, the existence of tax havens is a consequence of the existence of the so-called tax hells, that are jurisdictions with too many tax burdens (together with complex legislation). Tax avoidance can be enacted whether a tax engineer is able to identify, according to the business carried out by the customer, those oasis or offshore countries in which it’s possible to find conditions for low taxation, making also transactions between different countries, to benefit from a light tax planning. After the individuation of better jurisdictions, between offshore companies and legal havens, tax planning requires an analysis of all the norms, mainly of the tax treaties and conventions against double taxation- allowing in this way the customer to pay legally less taxes than he’d pay without the help of tax engineering. To reduce tax burden of a company and also to avoid its bankruptcy, for the constitution of a legal offshore company, it’s necessary to rely on the consultancy of a tax engineer who really knows the laws, able to make triangulations and any other legal operation, to avoid tax evasion that, differently from avoidance, constitutes a crime.

What’s an offshore activity? – An offshore business is normally conducted- de facto-by people that live in tax hell countries and wish to save taxes. Anyway, to render this operation totally legal, it’s important that the offshore company activity really proves to be managed abroad, with invoicing and collection in the jurisdiction in which offshore company is established. The funds collected on the offshore company accounts of this legal person can be used anyway, but it’d be better avoiding to wire bank transfers to ordinary bank accounts. The solution could be to use credit or debit card, or also make triangulations toward different accounts: only in this way you can be sure of eluding fiscal controls. Any customer has his own specific exigencies, for this reason it’s necessary to study a legal model of offshore company according to the customer’s goal: if you’re our customers, by buying our services you can benefit from a free consultancy to open an offshore company, in full privacy. Obviously not all businesses, for their specific nature, can wholly benefit from the advantages of an offshore company.

When we talk of advantages arising from offshore company constitution, it’s unavoidable to underline there are many ones. Here following only few of them:

    • Competitive tax system, with reduced taxation;
    • Real estates and savings are guaranteed;
    • Few formalities to fulfil for company maintenance and accounting;
    • Shares to the bearer (with the guarantee of more privacy);
    • Favorable legal framework to start a financial activity;
    • Despite supposedly high costs, in practice an offshore solution is not expensive if compared to a traditional company.

Any freelancers with a commercial activity whose incomes are more than 30.000 €, can find in the offshore company constitution an ideal way to reduce costs up to 80%. The saving is evident mainly for accounting obligations, since in different jurisdictions taxes are not required or the bookkeeping.  The countries that allow you to open an online offshore company, instead, require a minimum capital to pay, very much reduced. According to last estimates, offshore companies are well represented on the global market, since more than 60% of world capitals is administered by these structures. Consequently, the number of people who decide to establish their company in a tax haven has increased. Normally, the companies that require this kind of solution are the ones distinguished by an income between 100 and 200 thousand Euro per year, with employees between the 30 and 120 units.

Jurisdiction: which one to choose for your activity? To select the better jurisdiction in offshore countries for your company you have to consider the following elements:

  • Reliability of media of communication system;
  • Stable politics and economy;
  • Good world reputation;
  • Complex company Law;

BSD operates in different jurisdictions and all the required characteristics, for the country evaluation, are guaranteed. Obviously, it has to be considered the country of residence before preferring one jurisdiction to another for the constitution of an offshore company, making a comparison with the kind of activity you make. Our professionals will help you for the best choice, thus satisfying your needs. We’ll be able to offer our support to consider the best solution, evaluating how to open an offshore company and adopting the more suitable jurisdiction to the business purpose. Our consultants, then, will help you anytime, also concerning the management of an offshore company. Among the most advantageous offshore companies, we have selected some that will help you to maintain a competitive enterprise with no useless costs:

  •  Delaware
  •  Hong Kong
  • Isle of Man
  • Other offshore jurisdictions