Offshore company setup is still relevant in 2024 despite the fact that the global trend for more transparency transforms the offshore environment as well. All the advantages usually associated with offshore jurisdictions are still there to enjoy – maybe to a lesser extent in some cases. If confidentiality is your top priority, you are sure to find a jurisdiction where it remains high – but not absolute as was possible some decades ago. Low taxes are still offered by the majority of destinations. Some countries have introduced substance requirements under the pressure of international regulators, but it is possible to find those where you can do without substance. In short, all you need to do before you choose a jurisdiction to set up an offshore company is to read a detailed guide on offshore company formation and opt for the one that matches your criteria.

Reasons to Set Up an Offshore Company

In recent years, people have been actively looking for a better environment and prospects, economic viability, more security, and so on. Many entrepreneurs choose to establish a company in a jurisdiction where assets are protected in the most reliable way, company registration is not that difficult, and investments are welcome. And they find all of these overseas.

It does not mean that they relocate to the place of company registration straight away: they usually stay in the country of their current residence and manage their company from afar. Such entrepreneurs have peace of mind as they know that they can pack their bags at any moment if the situation in their home country gets worse.

Digital nomads are yet another category of people who establish offshore companies to take advantage of available perks, affordable company registration costs, excellent communication infrastructure, and a pleasant environment to live in.

Here are the usual advantages provided by offshore companies:

• Reliable asset protection
• Minimal (or even zero) reporting requirements
• Enhanced personal information confidentiality for beneficiaries and business owners
• Low or zero taxes
• Other country-specific benefits

Are Offshore Companies Legal?

Well, an offshore company is simply a tool – like a knife. It can be used for absolutely legitimate purposes or be an instrument of criminals. In other words, it is not the company itself that defines its legal or illegal status but the purpose you are using it for.

As for official steps you need to take to make your company a legally existing entity, here they are:

• Registration which implies entering the company name in the Register of Business Entities. This step entitles it to be promoted, licensed, and identified and gives it the right to operate under its name.
• Incorporation which gives your company the status of a separate legal entity, protects its business name, and improves its credibility.

What is more, compliance with the law requires that you study all legal acts and local regulations related to company formation to make sure you do not violate them. In addition, remember to check the law in your home country as you may be required to declare the act of possessing a company abroad – otherwise, you will be considered a law-breaker.

Purposes of Offshore Company Establishment

Below we will take a look at the most widespread legal purposes of setting up a company abroad:

• Investment in foreign property to take care of asset protection or expand your business by setting up an offshore company.
• Easy access to global markets from the jurisdiction where your company has been established.
• Import and export operations for the companies whose activities span the whole world.
• Setting up an inheritance trust or diversification of inheritable assets with the help of an offshore legal entity.
• Cooperation with partners across the globe
• If you set up an offshore company with a bank account, you will enjoy access to capital, loans, and better banking services.
• Establishing a holding company in an offshore jurisdiction.
• More reliable protection of personal information.
• A possibility to start and manage your company online.
• Better protection of ownership rights.

If you are not sure which jurisdiction will be best for you, think of the main purposes for your offshore company formation to simplify the choice. Here are some tips:

• If you want to easily obtain a banking license, we recommend Panama, Vanuatu, St. Lucia, or Puerto Rico.
• Jurisdictions like Ireland, Estonia, Luxembourg, and the UK are friendly to financial startups.
• It is not that easy to get a gambling license, anyways, you still can get it without any problems if you register your company in Costa Rica, Curacao, or Comoros.
• If you are first of all focused on asset protection, you will hardly find a better destination than Nevis or Belize.
• Want to enter the US market? You can set up a company in some states that offer the best conditions, such as Wyoming, Nevada, or Delaware, or choose Costa Rica, Panama, or one of the Caribbean countries.
• If your partners are based in China or the Asia Pacific region at large, opt for Hong Kong or Singapore – or set up a company in one of these and open an account on the other option for better diversification.

Offshore Company Registration: Plan

• First of all, you will need to choose the right jurisdiction by assessing the associated risks and comparing the existing conditions. You will also need to select a bank where you will open a corporate account.
• The registration step involves a lot of things, from choosing a unique company name to finding a reliable registered agent (this is mandatory as you cannot set up a company on your own: the local authorities only receive documents from registered agents).
• Next, you will need to pay all the fees required to form a company: a fee payable to the registered agent, authorized capital, a license fee if applicable, state duty, and so on. The exact amount depends on the company type, services required, and jurisdiction. If you need a company with a bank account, the amount will naturally be higher.

An offshore company is an essential instrument for your Plan B (which is crucial nowadays) and a great business instrument per se. You can follow the above link to read more about offshore company formation or talk to an expert free of charge to discuss your situation and get customized advice.