While many people may attribute an offshore company to be an illegal activity, but, there are plenty of legal reasons to set up one. It provides a lot of benefits to companies as well as the country itself. Offshore entities provide the best advantages like asset protection and trade and tax relaxations.
Not every country provides equal benefits for offshore company registration; some standout. Here are the top five countries for offshore company registration:
Hong Kong: Being a part of the People’s Republic of China, the country has a legal system following English common law. The country has immense incorporation benefits than many other Asian countries, from company registration to taxation. The low incorporation fees and zero corporate tax rate is yet another benefit you can earn by incorporating in Hong Kong. Apart from everything else, location is the most significant benefit for any business. With proximity to China and many other Asian countries, mainland access for trade is much more comfortable.
Panama: In the news for the Panama Papers leak, the country is still a viable jurisdiction for offshore company incorporation. Excellent asset protection against seizures and legal suits is one of the significant benefits you enjoy in this country. There are a few government regulations, least notices and approvals needed to distribute dividends, issue shares, and other alike activities. The healthy policies for corporation tax and other tax benefits make the country an ideal choice for businesses. Companies registered in Panama have the flexibility to carry out the same activities as in the US, Canada and EU.
Bahamas: The tax system and investor secrecy are the best advantages of this jurisdiction. The Bahamas allows a 20 years tax exemption for offshore companies and shareholders. This said, you only have to pay a set annual fee, regardless of your profit gains and margins. Another fact that makes Bahamas an ideal choice is the International Business Companies (IBC) Act of 1990, which prohibits sharing information with other countries. The company accounts & figures remain anonymous, and you don’t need to publish your accounts and balance sheets.
Cayman Islands: One of the most popular jurisdictions for offshore funds and companies, the place has a 0% corporate tax rate. You need not worry about capital gains, income taxes, profit taxes, withholding taxes until you’re in the Cayman Islands. Low registration and renewal fees attract investors. The jurisdiction is white-listed by the International FATF and by the OECD and follows all international tax regulations, unlike other tax havens. The country offers privacy and economic stability, which make it a considerate choice.
Cyprus: The geographical positioning of Cyprus’ to EU market, makes it an ideal jurisdiction for offshore company registration. Here you’ll have access to Intra-Community VAT number, the legal requirement for trading with other EU countries. Low tax rates and high flexibility add more value to the place for Company formation.