Individuals and companies choose to incorporate offshore for various reasons. Operating offshore has its advantages and drawbacks. Companies and individuals choose to form offshore businesses for a variety of reasons including:
- Lower tax rates
- Easier company reporting requirements
- Security against creditors
- The protection of one’s identity
- Avoiding local investing restrictions
The benefits of offshore companies in protecting directors’ identities
Sometimes trading is not the prime purpose of forming an offshore company. Because of local investment restrictions or risk of actions from creditors, directors may wish to keep their identities secret.
Offshore companies are similar to UK limited companies in that they are able to own properties, hold money and shares and other items in their own right. Thus, a person may use their company to make various purchases and then be protected by the fact that no one can discover that the company is owned by that individual. Different offshore jurisdictions provide different levels of privacy.
Offshore companies for tax savings
The zero or minimal tax rates applicable to offshore companies makes them very attractive to profitable businesses. The prospect of retaining all of the income earned compared to other countries where the government would levy a tax on the income has led to some businesses opening offshore branches and using them as trading vehicles.
The best advice on offshore mattes is best done after due consultation, so please feel free to contact us for further discussion. Email Admin@ProminenceAndco.com.