Offshore Basics

By "offshore" centre we usually mean the country with low or zero taxes for personal and corporate foreigners. By choosing the jurisdiction for your business where you are not citizen or resident you can obtain various financial and asset protection advantages.

It should be noted that every country is offshore to the rest of the world and having a "tax free" regime is not always the primary consideration as there may be other fiscal, legal and administrative reasons for going "offshore". For this reason, not only the traditional offshore centres, many 'onshore' jurisdictions have corporate structures that are attractive to international users. The United Kingdom (which has some of the lowest tax rates in the European Community and the highest number of double taxation treaties in the world) and some States in the USA are among the largest offshore financial centres in the world. UK LLP, UK Limited Companies, US LLC, Hong Kong Limited Companies and EU companies are the examples of onshore structures that can be used for international tax planning purposes.

An offshore company or corporation is the same as any other company in that it is an entity recognised by law as a separate "entity" with limited liability. As such the company has the option to sell shares, the right to sue and be sued, and has perpetual existence. An IBC (International Business Company) is the most popular type of offshore corporation for asset protection and privacy purposes. An IBC is usually a tax-exempt corporation that can do business all over the world except in the country where it has been incorporated. This company receives a major tax advantage often extending to decades of operation.