Offshore companies are defined as a corporate entity that does not operate domestically in the jurisdiction it is incorporated in, but rather conducts its business activities in foreign markets. The main reason for doing so would be to gain access to favourable tax regimes and to facilitate global trading and expansion. Despite their traditionally negative association with money laundering and tax fraud, it is completely legal to setup offshore company.
Let Tetra Consultants take you through the steps on how to setup offshore company in the most suitable jurisdiction and with the most suitable business structure to help your business to expand and grow globally.
There are four main steps to legally setting up an offshore company.
By following these four steps, you can expect to have a seamless and successful offshore company incorporation.
[ps2id id=’step1′ target=”/]Step 1: Choosing a jurisdiction
Offshore jurisdictions can be split into the categories as follows: traditional tax havens, zero-tax jurisdictions, and legally tax-exempt jurisdictions.
In most cases, Tetra Consultants would not recommend setting up in traditional tax havens as they are usually on the Organisation for Economic Co-operation and Development (OECD) and European Union’s (EU) greylist or worse, blacklist. This category of jurisdictions includes Seychelles, the Cayman Islands, and Mauritius. Usually, regardless of whether they are currently part of the blacklist, the connotation of being a tax haven would remain. This increases the level of scrutiny by banks and tax authorities on your offshore business, and also results in a lack of credibility when dealing with suppliers and customers. This cancels out any benefits in terms of a low tax rate, except in certain scenarios where no tax reporting or transactions are required, for example using your offshore company as a personal or investment holding company.
Zero-tax and legally tax-exempt jurisdictions offer a 0% tax rate through competitive tax subsidies or do not have corporate tax. Compared to traditional tax havens, they have stricter financial reporting requirements, offering them more credibility to facilitate any business dealings you might have. Companies in such jurisdictions are suited to a wide variety of purposes, including import and export or investment companies.
[ps2id id=’step2′ target=”/]Step 2: Offshore business set up
Choosing a company structure
There are three main types of offshore company structures: corporations, partnerships, and sole proprietorships, and lastly, foreign offices.
Partnerships and sole proprietorships might be easy to incorporate, but they do not offer limited liability. Foreign offices are usually restrictive in the scope of activities they are allowed to undertake, and also face the same drawback of unlimited liability. Therefore, corporations, or more specifically a private limited company, would be the most common and suitable option for our investors since it offers a good balance of being easy to incorporate, protection from liability, and ease of succession.
Before every engagement, Tetra Consultants will seek to understand your business activities and goals to recommend the most suitable jurisdiction and company structure for you to reap the most benefits from offshore company incorporation.
Your chosen jurisdiction might come with additional requirements. Common ones include:
- Name reservation
- Tetra Consultants will also help you to conduct a name search and reserve your preferred, unique name with the Company Registrar.
- Local director, shareholder, or secretary
- Tetra Consultants can offer you nominee director and shareholder services to help you meet this requirement or for additional privacy. We will draft an agreement that ensures this director will have no decision-making power in your company.
- Certain jurisdictions also require a local secretary or management company. Similarly, Tetra Consultants can help you to meet this requirement.
- Local registered office address
- We also offer virtual and local office services to help you handle correspondence from government services and banks.
- Paid-up capital
- Supporting documents
- This includes the Memorandum and Articles of Association, business plan, and other corporate documents. We will draft these documents to prepare them for submission, and also courier them to your preferred address once they have been approved.
Certain jurisdictions might also require a management company, corporate service provider, or registered agent to process your application. If this is the case, we will assign one to your company.
Tetra Consultants aim to help you fulfil all these requirements so that you will not experience any delays in offshore business set up. We hope to deliver a seamless and hassle-free offshore company incorporation experience to all our clients.
[ps2id id=’step3′ target=”/]Step 3: Offshore bank account opening
Tetra Consultants works with an extensive global network of banking partners to ensure that you are able to open your offshore bank account smoothly, and without travel if possible. If a face-to-face meeting is required, we will negotiate with the bank to provide our clients with alternative modes of identification such as video conference calls or visiting a bank branch in their home country instead.
Such multi-currency offshore accounts allow your offshore company to facilitate international transactions conveniently and offer access to new banking and payment options that might not have been available to you domestically.
[ps2id id=’step4′ target=”/]Step 4: Remaining compliant
The last but often overlooked step of how to setup offshore company is fulfilling all the tax and accounting obligations.
Different jurisdictions have different requirements, but rest assured that our accounting and tax team will help you to prepare the necessary financial statements and corporate tax returns to ensure you can continue to operate legally. We will also file these documents with the relevant authorities as required. We will also help you to apply for additional required licenses based on your business activities.
How we can help you to setup your offshore company
Contact us now to find out more about the comprehensive range of offshore incorporation services that we offer, and our team of experts will revert within the next 24 hours.