There are several advantages in creating an offshore company, since most of the regulations that govern them are laid-back and can be easily addressed by the company itself. The creation and registration of an offshore company is also stress-free, differently than forming a firm within a country under the statements of its corporate law and business laws. An interested investor must take into account several factors when creating an offshore company, such as the kind of company to be established, the number of employees to hire base on the applicable contract law, and also what kinds of services or products will this company provide.
Different forms of offshore companies
International Business Company
Like private limited companies, the IBCs, as they are commonly known, consist of various directors forming the board, divided in shares and a shared capital. The IBCs enjoy a complete tax exemption, but an annual fee is typically charged. Limitation to business transactions is applicable, one perk a common offshore company regularly enjoys. Strict confidentiality is enforced and no details regarding the business entity are publicized. The IBCs are the most common offshore companies and thousands of these firms are registered around the world.
Private Limited Company
These rely on a non-residence basis or territorial taxation, for them to be exempted from paying tax or enjoy a minimal rate for their businesses. Unlike IBCs, confidentiality is not strict, they are required to perform bookkeeping, and are subject to audits.
Limited Liability Company
Basically, these are not common in offshore jurisdictions. There are places where you can form a limited liability company such as Costa Rica, Marshall Islands, Panama and USA.
The most common perk regarding offshore companies is the tax exemption, but it is just a form of tax postponement where payment of taxes is delayed into the future. The power to reinvest a tax-free capital is more than enough to attract more investors or business entities to form an offshore company.
Online based off-shore companies are very advantageous. If properly incorporated, legal processes can be made to defer tax payments and reduce liabilities. Typically, online business can do its activities anywhere as these are not limited by any jurisdictions.
The best offshore incorporation jurisdictions are found in countries such as Belize, British Virgin Islands, Hong Kong and Mauritius, where there are mostly IBCs. It is important to identify the best jurisdiction that will apply to any potential offshore company, whether it is any of the Asia law regulations or the jurisdiction of any other country or region that applies. The jurisdictions of the commercial law must be carefully analysed when trying to incorporate a company in any of them. Factors such as communication and reputation of the jurisdiction are important to put into consideration. Consider as well the state of economic stability or any political influences that might affect the jurisdiction.
One important thing to do, when trying to set any kind of offshore company, is to seek for legal advice from experienced lawyers regarding international tax law to understand the ways and paybacks in offshore jurisdictions. These legal services provided by your company’s law firm will also help to identify goals and needs assertively. If you are based in Thailand, and need advice on that matter, contact any of our SBC Interlaw Thailand lawyers or send an enquiry to our law firm in Thailand.