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An Offshore Company can be used for many purposes and the list shown below is by no means exhaustive. Expert advice should always be taken.
A company dealing with import/export may decide to incorporate offshore. In this way it can then take orders from the customer and arrange for the manufacturer to deliver directly to the customer. The difference between the invoice to the customer and the price paid to the manufacturer can be accumulated in the offshore company.
Funds can be invested through offshore companies and depending upon the jurisdiction there will be no capital gains taxes. Income earned may be subject to local taxation depending upon the location of the investment, but with careful use of tax free bonds, taxation on such income may also be avoided.
An offshore company may be used to hold the shares in subsidiary companies which may be in high tax areas. By careful choice of the jurisdiction for the holding company, one in which there are suitable tax treaties, tax liabilities may be substantially reduced.
A high net worth individual with assets in several countries may wish to place those assets in an offshore company. Upon his death it will only be necessary to obtain probate in the country in which the company is incorporated. The shares in the company would then be transferred to the heir without further formalities in the individual companies.
There can be considerable advantages in registering an overseas property in the name of an offshore company, but it is important to obtain local legal advice. Some countries impose additional taxation for ownership of a property through an offshore company which may more than offset the advantages to be gained.
A person such as a sportsman, entertainer, architect etc. who receives substantial income for his services could set up an offshore company to receive that fee income by invoicing for the services. The individual would then receive a salary from the company. The difference between the income received and the salary aid by the company would accumulate tax free.
Shipping companies can own or charter ships and the profits can accumulate tax free. The company should normally be incorporated in the same jurisdiction as that of the flag which the ship is flying.
In some offshore jurisdictions it is possible to incorporate insurance companies who do not have to pay tax in respect of their premiums or investment income.
Michael Rhodes Legal Services does not give any warranty that the use of an offshore company will be beneficial to a particular individual who is the beneficial owner of such a company. The tax laws of the individual's country of residence or domicile must be taken into consideration for which professional advice should be taken.
