Offshore Company Meaning

The term offshore company means a business incorporated in a territory outside the jurisdiction of the owner’s home country. Offshore companies are generally formed to avail the attractive tax structures and business prospects of the foreign country. The essential characteristics of these companies are: * The organization is formed by person/s situated outside the jurisdiction

The term offshore company means a business incorporated in a territory outside the jurisdiction of the owner’s home country. Offshore companies are generally formed to avail the attractive tax structures and business prospects of the foreign country. The essential characteristics of these companies are:

* The organization is formed by person/s situated outside the jurisdiction of the country in which the business is registered.

* The company does not operate a sizeable business within the jurisdiction of the country of incorporation.

* The company meets nominal tax expenses charged by the administrative laws of the country where it is registered.

Offshore Company: Registration and Other Necessities
To register offshore companies, the following factors must be taken care of:

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* Memorandum and Articles of Association, which details the business type, capital, membership rights, company objectives and internal processing, has to be submitted.

* Certificate of Incorporation has to be obtained from the Registrar of Companies to prove the company’s existence. Certificate of Incumbency proves that the company is in good standing.

* A company is obliged to maintain statutory records of company formation. Many administrative laws require the records to be kept within the jurisdiction of the country where the company has been formed.

* Directors have to maintain all the necessary records and audited accounts.

Offshore Company: Aid of Registration Agents
Registration agents can facilitate the incorporation of these companies in the following ways:

* Helps select a registered office for the company to which all future official documents and legal notices are sent.
* Provides nominees to work on behalf of shareholders, who are the legal owners of the company.
* They can provide directors and managers to run the company’s daily affairs, if they are satisfied with the company’s activities.
* They also help in appointing company secretary (ies) who ensure that the organization meets the statutory obligations.

Offshore Company: Benefits

There are several benefits of forming a company on foreign soil:

* Convenience of operation – Such companies are governed by less stringent laws about auditing, accounting and operational activities.
* Tax benefits – It is an international rule that businesspersons who start a company in a foreign country are eligible to tax benefits.
* High asset protection – Since the company is based in a foreign land, personal assets are out of reach of potential litigious action.
* Easy reporting system – These companies enjoy easier reporting requirements than do the onshore companies.

 

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