Buying ready-made offshore companies is the easiest way to become an owner of a foreign company in an offshore zone. The most direct way to achieve success in business, hide as an owner, or reduce taxes is to use the most efficient and relevant tools, namely, to buy a foreign firm.
Benefits of offshore (foreign) companies
By registering the company in an offshore jurisdiction, you can not only minimize (or even completely exclude) the tax burden but also almost always (with few exceptions) get a lot of additional benefits:
- 0% tax (tax-free offshore) in most companies recommended by us;
- confidentiality of business ownership;
- accelerated and simplified terms of company registration;
- lack of currency control;
- minimum requirements for accounting, reporting, and auditing;
- wide opportunities for remote management and the presence of a bank account;
- only positive feedback on the offshores, and more.
With a radical change in tax legislation in one zone, you can apply for transferring the company from one jurisdiction to another (it is called “re-domiciliation”).
What is an offshore company?
Let’s start with the definition of an offshore company. There are two main and generally accepted areas of practical understanding of the term “offshore” by the entrepreneurs and banks that still work with non-resident clients in international business.
- The companies registered in the classic offshore or classic offshore jurisdictions/ tax havens.
- Companies located outside the country where the owner lives, or just outside the country where the main business, officially registered offices and representative offices of the parent company are located.
Using the second definition of the term “offshore”, any foreign company can be called an offshore company. But suppose you take a concept, more established among entrepreneurs. In that case, an offshore company is a foreign company, which, due to its location, receives different benefits, mainly in terms of taxation, confidentiality, and reporting. A maximum number of such benefits and the complete absence of some types of taxes can still be found in classic offshores – Nevis, Belize, Panama, Seychelles, BVI, Cayman Islands, Bermuda, and Bahamas. At that, some of the classic offshores are moving towards business transparency faster than others. Popular classic offshores, which are also British Overseas Territories (and not the independent states), are forced to act faster.
Is it legal to buy an offshore company?
Offshore registration and its use in the business processes are not considered a crime/prosecuted. The only trouble is that you can withdraw money outside the country only if it is justified by the production or economic necessity, and not the desire to hide your income from taxation. The crime that law enforcement and tax authorities are fighting against is precisely the illegal withdrawal of funds. Accordingly, by using an offshore company for legal purposes, the entrepreneur has nothing to fear.
Offshores mainly become a means of optimization of taxation or the protection of property rights. In the first case, you need to think over the scheme of inclusion of the company in the structure of the enterprise especially carefully, since there is a risk to violate the state laws or attract too much attention of the inspection bodies to the enterprise.
Specialists recommend several absolutely legal ways of using offshores:
- Transfer of funds under contracts for the provision of services.
- Transfer pricing. It should be noted that today this scheme attracts the most attention of the supervisors.
- Execution of the long-term loan agreements.
- Transfer of ownership for a certain term.
Whatever your purpose of using offshore, before you buy an offshore company make sure to consult with the specialists, who will tell you how viable and legitimate the use of the chosen scheme of such company will be.
Advantages of a ready-made offshore company
Registration of an offshore company seems like the best solution to many: quickly and without problems. However, this procedure also has difficulties that you should learn in advance. The biggest misconception is that you can use an offshore company literally the next day after the purchase. On the one hand, entering information into the state register really takes only a couple of days, but on the other, in addition to entering information, you will also have to pay an invoice, send the original documents, ensure that you can use the company name, etc. These procedures can last for 1-3 weeks.
Of course, there is a way to become the owner of an offshore company faster. How? It is enough to buy an offshore company.
Such organizations are also called “shelf companies”. The benefits of such legal entities is that for them, all the above-mentioned procedures have already been completed, so the buyer doesn’t have to wait for weeks. The agent delivering registration services selects the name, appoints the nominee directors and receives a package of necessary documents. When purchasing such a company, all the papers are simply transferred to the buyer, which allows shortening the time frame.
By choosing such an option, you can save a lot of time. Besides, don’t forget about another benefit of buying a ready offshore company – seemingly the long time of its work, as, on paper, such a firm can run a business flawlessly for a couple of years. What does it give to the final buyer? An opportunity to present such an organization as a reliable and successful business partner. At the same time, it is almost impossible to find out exactly when the company became yours.
Ready-made offshore company registration procedure
To buy offshore company with bank account, you will need the following documents: certified copies of passports of the owners and directors and proof of residence (the utility bill). After signing the contract, you pay the cost of the company and get full access to it. Most often, scanned copies of documents are sent to you first (for speed), and then the originals are mailed.
If you planned to conduct dynamic business activities in a newly purchased company, you can’t do without a bank account. Understanding whether you need a bank account or not from the very beginning can save you time and money in the near future.
Some banks refused to serve the companies from the offshore (both new and old). This should be taken into account yet at the stage of selection of jurisdiction to purchase the ready-made offshore company with a bank account. The thing is, banks are very cautious about new clients. To open a bank account, you need to consider not only the type of business or the reputation of its new owners but also the country of registration of the offshore.
Banks are also much more demanding on the documents: you must have both personal and corporate documents, which should be submitted on time and in strict accordance with the bank requirements.
The procedure of account opening itself takes more time than the purchase or registration of an offshore company.
If you want an offshore company to become a benefit and not a burden, you need to follow a few simple rules. Their non-compliance can lead to the loss of money, time, reputation, and sometimes- even freedom.
Act strictly in the legal field. Watch out for changes in the rules, and if it is difficult to control the tax changes in (for example) Mexico and the US at the same time, use the services of a professional. Offshore companies are an instrument. Any instrument is used either for the good or for evil. The second is punished, and the reckoning comes quickly. Besides, this tool can’t solve all business or human relationship problems, but it can help. Don’t chase cheapness. The offshore company needs not only registration but also the world reputation and bank account for receiving money. Besides, not every jurisdiction is suitable for any business.
The places appropriate to protect assets are not always convenient for trading industrial equipment. There are no more accessible solutions. When choosing an offshore and working with it daily, you need to think, analyze and check the facts. Otherwise, you will suddenly find yourself outlawed, fined and prosecuted.