Registration of companies in the offshore zone

Registration of a company offshore

Offshore (or offshore zone) is a jurisdiction that allows you to create a non-resident business without the presence and conduct of it in the country of incorporation, and enjoy the absence of local taxation. Often the concept of offshore is also applied to companies established in tax-free zones. 

Thus, if you register and open an offshore company, according to the classical use of offshore zones, it does not fall under taxation, does not maintain financial statements and is not required to have a real office. Moreover, often for registering a company in an offshore zone, businessmen prefer to use a nominee service, which means the appointment of resident employees (director or secretary) to the management positions of the company. This allows you not to highlight the data of the real owners of the company in public registries. 

The early application of offshore registration was massive, which led to the abuse of tax incentives. In this regard, international regulators began an active fight against “dummy companies”, which were often based in offshore zones and did not conduct any commercial activity.

Features of opening a company in an offshore zone

Today, registering a company offshore, without the right approach, has its own risks. Therefore, when choosing a suitable jurisdiction, you need to consider:

•  reputation of the country;
•  entering the black list of offshore companies;
•  entry into the sanctions lists;
•  availability of requirements for real presence;
•  maintaining tax benefits;
•  the cost of maintaining the company;
•  the cost of state duties;
•  ease of offshore registration;
•  publicity of registries and level of confidentiality;
•  availability of requirements for financial reporting and accounting.

Our lawyers regularly monitor legislative changes in each offshore and analyze them to select the best solutions for clients. We always select relevant and promising options from the point of view of the future existence of the business.

Where is it better to register or buy offshore?

Since the course of deoffshorization continues to operate in the world, it is necessary to properly plan your international activities. Those offshore companies that have already introduced stringent substance requirements (for example, the BVI, Belize) are suitable only for those who can confirm their tax residency in another country. In this case, the absence of offshore taxation will remain in force.

Other jurisdictions that have not yet lost their appeal, for example, the UAE (business in the Free Economic Zone is equated to offshore and is not subject to taxation), Mauritius (0% tax for business outside the country), Madeira (corporate tax 5% for profits received outside islands), the Seychelles and Panama (introduced accounting requirements, but retained tax benefits) are suitable for remote non-resident business.

It is worth noting that some countries allow non-residents to buy a ready-made offshore company. The sale of ready-made offshore companies and the registration of new companies vary significantly in terms of launch time and costs. Specify the features of these procedures and the availability of ready-made companies with our lawyers.

Offshore blacklists

Before registering an offshore company, you need to check whether this tax-free jurisdiction is included in the current international list of offshore companies, since this affects the future activities of the company. The EU regularly updates the black and gray lists of countries that are recognized as offshore. So, if a country is included in the list of offshore zones, a company that is established in this jurisdiction may face certain restrictions and enhanced checks. In such cases, if a company plans to do business with Europe, most likely partners and counterparties will require more documents, banks will want confirmation of the substance, and tax benefits may be limited. In most cases, jurisdictions that are blacklisted offshore are preparing to significantly change their legislation in order to avoid international sanctions. Therefore, company owners should be prepared for future changes in the business environment and adapt to new realities. 

To properly plan your business structure, choose a country for registering an offshore company, you need the support of specialists. Therefore, if you are interested in registering offshore companies abroad, please contact our office in Kyiv or leave a request for an online consultation. Our lawyers will tell you where it is most profitable to register offshore companies today, the prices for opening an offshore company with an account and help with all registration procedures for the company.