What are offshore companies

Published on: 20 June 2020
By Antonio

An offshore company is a company whose main characteristic is that they are registered in a country where they do not carry out any economic activity.

 

The countries in which they are located are usually tax havens, to benefit from the tax advantages they offer.

 

The foreigners who control the company use the tax haven as their legal domicile. Broadly speaking, there are three great advantages that it brings: asset protection, confidentiality and privacy, and tax advantages.

 

Regarding the latter, the taxes that can be avoided with an offshore company include inheritance tax, estate tax, consumption tax or income tax.

 

While the costs come down to a registration fee, specialized sites put between $ 200 and $ 600 a year. In addition to a cost of incorporation that usually does not exceed $ 1,000.

 

Gioant portal it is one of the sites with the most complete information about it.

 

This is how they define themselves:

 

The main characteristic of an offshore company is that it cannot carry out business in the territory where the company is incorporated, since it would become an onshore company, that is, the tax haven would make it tax like any registered company in the country and the tax rates would be very similar to those of a company incorporated in a high-tax country.”

 

To act within the law, an offshore company must meet certain conditions: first, the directors of the company must not be domiciled in the country of the registered office. The company may not carry out commercial activities in this country and not use local labor.

 

By cons, it is allowed to have a representative of the company on site. Society will not be able to use the economy of the host countries, in particular, in matters of investment, subsidies and bank transfers. Several territories have been labeled by the International Monetary Fund as offshore financial centers.

 

The following are the ones that are being evaluated by the entity to improve criteria such as transparency and cooperation:

 
  • Andorra,
  • Anguilla,
  • Aruba,
  • Bahamas,
  • Belize,
  • Bermuda,
  • British Virgin Islands,
  • Cayman Islands,
  • Cook Islands,
  • Cyprus,
  • Gibraltar,
  • Guernsey,
  • Isla de Man,
  • Jersey,
  • Liechtenstein,
  • Macao,
  • Malaysia,
  • Monaco,
  • Montserrat,
  • Netherlands Antilles,
  • Republic of Paulau,
  • Panama,
  • Samoa,
  • Seychelles,
  • Vanuatu.