There are often negative notions around offshore company formation. In
the business world, setting up this type of operation may be viewed by some as
a cover up as it has come to mean that you are up to something gray or illegal.
While this might be true for companies who have been built for questionable
purposes, it is a gross generalization to say that all offshore operations are such.
While there are many uses of offshore companies, this should serve to educate
you about what offshore company formation is truly all about as it relates to
companies carrying out entrepreneurial activities.
Enterprise owners who are running an online business that don't have
any physical presence greatly benefit from an offshore business setup. As
opposed to your conventional counterparts, having no physical business premises
and tax residency in a high taxing jurisdiction may exempt you from certain tax
laws. An
offshore company also benefits from other unique business features like
confidentiality, asset protection, and an offshore banking account, among
others. An offshore banking account, for instance, often offers a wide range of
advantages like higher interest rates, more and better investment
opportunities, and the ability and opportunity to open your account within a
more stable economy or jurisdiction.
When setting up an offshore company, there are certain things that you
should keep in mind:
- First is keeping a sound business plan. Just as you should establish a concrete plan for an on-shore business, it is important that you set a solid blueprint for your offshore company, ranging from its operational details, goals, and even an exit strategy.
- Choose an experienced adviser/service provider to help you establish and then administer and even manage the company. A DIY company setup is bound to fail, especially if you don't know the ins and outs of establishing and running an offshore business. Having an experienced expert by your side will guarantee a sound transition as they lend you their knowledge in establishing an offshore operation and then the ongoing operations of same
- Find the right jurisdiction. With the help of your adviser, choose the most appropriate jurisdiction in which to establish your business—one that is reliable and respectable. Remember that not all jurisdictions are such and you should choose a stable country with a long-standing reputation for hosting off-shore companies.
