Offshore company formations have become a lot more mainstream and the benefits are clear cut these days. There is no denying the fact that a business can enjoy financial privacy, tax benefits and freedom from regulatory compliance issues. These same issues hobble competitors registered locally.
Incorporation is still easy and very cheap too. That’s why a business registered in tax havens like the British Virgin Islands or Seychelles has a leg up right from the start. It can plough back tax savings into the business, while its competitors in the US and Europe struggle to break-even after taxes.
For those who need financial privacy, there are countries where the banking system is primed to accept funds under a veil of secrecy. Incorporation in countries like Lichtenstein helps keep funds secure and the owner of the business out of the picture. It goes without saying that in this case too, there will be considerable savings in taxes.
One of the biggest problems faced by a business is the need to abide by employee welfare laws. A business not registered locally doesn’t have to worry about these laws, and can take in or fire employees as necessary. Temps or contractors can do the job just as well, and they won’t be on the payroll or eligible to join unions or ask for benefits.
The same applies for reporting to regulatory authorities, which the business can safely ignore for the most part. One big advantage is that the incorporated entity won’t need to show a large equity investment. Whatever assets it does have will be protected from lawsuits and local creditors in locations where the business has suffered failure.
Offshore company formations are a twin-edged sword that can cut right through heavy taxes and bureaucratic red-tape which bind down locally registered companies. But the other edge cuts deeply too, and the business sometimes overreaches or goes off-track due to lack of oversight. The point here is to underline the power of this tool, in ways that can be good and bad.
Company formation online is fast if you understand what needs to be done. You might want to retain a good accounting service to track your financial transactions.