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Classic offshore company

The advantages of classic offshore companies are based on the countries’ law systems that offer tax exemption for businesses owned by foreigners (either natural persons or legal entities) if they satisfy certain requirements.

Beside tax exemption offshore countries provide the anonymity of the real business owners, confidentiality of offshore bank accounts and also deliver from financial and tax reports.

But classic offshores have a range of disadvantages. The first one is their low respectability. Before starting business it is necessary to ask your partners if they agree to work with a company registered in a classic offshore country. Also it can be difficult to get a tax residency certificate that can be required if you open a branch, a representative office or a subsidiary in other countries.

Classic offshore countries do not have double taxation treaties with other countries. That is why offshore companies are mainly used as starting or last destinations of international financial  schemes when the companies accumulate profits received from abroad and manage working balances of the mother companies.  

Offshore companies are also applied to for simple schemes of international tax planning. The main economic interest is to include an offshore company in a chain of transactions among mother company and international partners, to fix prices, rates and interests for credits in the way, when maximum expences and minimum profit are left in the country with high taxes, but maximum profit remains on offshore company.    

Simple examples of offshore company use

An offshore company can be:

  • an intermediary in the export / import of goods and services;
  • the owner of assets or property;
  • the owner of intellectual property (advantageous for founders and owners of internet business, writers, showmen, service-related people);
  • a speculator on the Stock Exchange and FOREX;
  • used as a transportation company (company is the owner of transportation vehicles).

 On our website you will see the most popular offshore countries.

To get our specialists' opinion or advice and to compose your business optimal tax scheme please dial: +7 (495) 917-93-36.