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The permanent increase in tax liability and the growth of fiscal rates lead entrepreneurs to the idea of the need to optimize tax expenditures. The most effective method in this regard is the registration of an offshore company and the subsequent transfer of the legal address of the business there. Exporting business to a tax haven remains relevant, even though many offshore companies are under pressure from the global economic community to standardize their tax policy and bring it into line with the requirements.

It is generally accepted that the independent opening of an offshore company is an overwhelming task for someone who does not have special knowledge and experience in the field of finance and corporate law, and therefore the issue related to registration is most often entrusted to professional lawyers.

Of course, qualified legal protection allows you to avoid a lot of mistakes, optimize the process, and simply act for sure, saving the registration algorithm from unnecessary actions. On the other hand, independent registration of an offshore company allows you to save money, and as a result, the applicant will receive not only a ready-made company in the offshore zone, but also extremely valuable experience of interaction with international bureaucratic systems.

We choose a jurisdiction for registering an offshore company.

The word “offshore” has firmly entered our everyday life, and this is, first of all, the merit of mass media. The average citizen knows that an offshore combination is one way to preserve capital, and even knows that the business should be exported to the Seychelles or Cyprus. At the same time, a competent businessman knows that entrepreneurship is not a case where you need to follow the example of others, and therefore, when choosing a country, you cannot be guided by geographical names, which are more often found in the press and on television.

On the modern world map, there are approximately sixty jurisdictions that offer tax benefits to foreign companies. The final choice of the optimal jurisdiction is a purely individual matter and depends on the specifics of the commercial task. However, there is a basic list of selection criteria that will be relevant in any situation.

Duties and taxes

Most classic offshore companies completely exempt foreign businesses from taxes, provided that the actual activity will be conducted outside the jurisdiction. The difference may be in the term of tax immunity – somewhere it is indefinite (for example, in Belize), and somewhere it is issued for a certain time (for example, in the Dominican Republic or in the British Virgin Islands it is valid for twenty years). At the same time, almost every offshore company charges the business an annual fee for the continuation of the company. In some tax havens, this is a fixed amount, while in others it consists of the agent’s fee, the cost of office rent and the amount of government contributions.

Registration procedure

Registration rules set by the government may also vary. For example, in Belize you will need at least one shareholder or director with tax resident status, while in the Seychelles there are no residency or citizenship requirements, and in Panama the company will need to find three directors, as well as the head of the company , secretary and treasurer.

Share capital

In Belize, the minimum authorized capital is one paid-up share, and the standard is $5,000 or the equivalent amount in another currency. In Panama, the concept of “declared capital” is used, which is a fixed part of the statutory capital. So, for example, with the authorized capital of 5,000 dollars, it will be necessary to pay only 100.

Taxes and reporting

Another important factor is the presence of reporting requirements. In some jurisdictions, they are absent – meetings of company founders can be held even by telephone. In others, requirements relating to financial and accounting reports are established. At the same time, copies of decisions and protocols must be kept and provided upon request.

Privacy

Non-disclosure of data is an important factor in taking a business offshore, as the combination with a tax haven may lose any meaning if confidentiality is not maintained.

As a rule, the names of the founders are not made public and are known only to the agent who conducts the business registration. On the territory of those jurisdictions where confidentiality is not observed, foreigners are provided with a nominal service.

Limitation

In some offshore companies, there are restrictions related to the activities of the company in the territory of the tax haven. The company cannot interact with other companies, except for situations related to obtaining attorney, accounting and legal services. This circumstance should be taken into account when choosing a jurisdiction.

We should also not forget about the so-called “black lists” of the Ministry of Finance, the State Fiscal Service and the National Bank. States with a neo-offshore policy do not like jurisdictions with the status of tax havens, and this is quite logical – will the tax service be happy to lose potential taxpayers who, moreover, continue to conduct actual activities on the territory of the country, and therefore to companies taken offshore from “black lists”, various sanctions are applied. For example, such a company may not be served in the bank.

Offshore jurisdictions include offshore jurisdictions, which completely exempt foreign businesses from taxes, and so-called onshore jurisdictions, which set minimum tax rates, but do not completely waive them. Registering a business onshore is more difficult and, if you use the services of a legal company, more expensive, however, maintaining the reputation of onshore businesses is much easier.

Another criterion is the absence of double taxation. By default, every entrepreneur must simultaneously pay taxes in his home state and in the country where his company is registered. To avoid this, many governments conclude double taxation avoidance agreements among themselves, therefore, when choosing a jurisdiction, it is also necessary to make sure that Ukraine has signed a corresponding agreement with this state. Otherwise, registering an offshore company in this tax haven will be pointless.

Choosing a name when registering an offshore company.

As you name the ship, so it will sail. This statement does not lose its relevance even when registering an offshore company. The first thing the registrar will ask is the name you plan to give your new business. There are practically no restrictions in this regard. The registrar can refuse only in several cases:

• The proposed name completely repeats the already existing one in the offshore territory or is very similar to the name of a world-famous company;
• If the name is likely to mislead a potential customer, echoes state or government names;
• The words present in the name indicate a specific type of activity (trust, bank, insurance), which the company does not actually conduct. In this case, you will either have to give up such a name, or get an appropriate license (fund, banking, insurance).

Additional requirements for titles may apply in a specific country. For example, the registrar may require adding an ending to the company name that indicates the limited liability of the founders or the chosen form of ownership.

If the need to change the name arises already in the course of activity, it is necessary to first obtain the consent of the registrar and only then make appropriate amendments to the founding documentation.

Constituent documents: preparation for offshore opening.

Founding documents include the founding agreement and the charter, and it is with them, first of all, that & nbsp; registration of the company in the offshore territory. The articles of association must contain general rules by which the enterprise plans to be governed. In addition, it is necessary to indicate the types of economic activity. The charter is sealed with signatures and provided to the registrar in printed form. The number of signatures must be equal to the number of participants, the minimum number of which is established by the legislation of each jurisdiction. Each signature is certified by an authorized agent or notary public. As for the place of residence and residency of shareholders and directors, each offshore also has its own requirements on this account – if in some management positions can be held only by local residents, then in others there are no restrictions whatsoever in this regard.

A separate point is the possibility of using a nominal service during registration. In most tax havens, such an option is present, and the inclusion of the denomination in the combination allows you to keep the names of the final beneficiaries secret and simplify the registration procedure.

Now a few words about the founding agreement. It prescribes the rules governing the management of the company’s affairs – the procedure for issuing shares, the algorithm for conducting directors’ meetings, and more.

Other documents for registration of an offshore company

In addition to the specified documents, the applicant will need to provide:

• international passport and photocopies of pages containing personal information;
• receipts confirming the payment of utility services during the last three months and indicating the applicant’s place of permanent residence;
• a letter from the bank confirming the existence of an open account in it;
• resume.

If the founder of the company wants to use the nominal service, then, in addition to the founding documentation, the following official papers may be required:

• Trust management agreement – a document delegating the administrative functions of the real owner to another person, who also performs the functions of the nominal;
• Rejection letter from the director. This Nominee Director Resignation Statement with Open Date. It is drawn up in order to give the beneficiary the opportunity to quickly remove the denomination from the performance of duties, if the actions of the latter get out of control or cease to satisfy the owner.

Authorized capital of an offshore company.

In the territory of most offshore jurisdictions, registration of a new company is possible only if there is a minimum authorized capital, the amount of which is determined by legislation. Most often, the size of the authorized capital determines the size of the duty, which is paid to the state during registration and subsequently collected annually. As a rule, this leads to the fact that companies declare the maximum amount of authorized capital, since in such a case a minimum annual duty is established.

In the classical scenario, the authorized capital is fully distributed among shares, each of which has a fixed nominal value. The share in the authorized capital belonging to each shareholder simultaneously outlines the amount of his personal financial responsibility for debts. If, due to certain circumstances, a similar liability arises, the shareholder shall reimburse only the nominal value of the shares owned by him.

Offshore accounting reporting.

Accounting reports can be prepared in an arbitrary form, since the legislation of most offshore jurisdictions does not require the mandatory provision of accounting reports. Norms forcing foreign directors to report on accounting and auditing are present in only a few tax havens.

Legal address for the company.

Having a legal address in the country of registration is another indispensable condition for establishing a company in an offshore zone. All official correspondence will be sent to this address. First of all, official requests from fiscal authorities. At the same time, it is not at all necessary to store all documentation or conduct business at this address.

Registration of an offshore company is a complex multi-stage procedure that involves close interaction with the registrar, study of the corporate legislation of the offshore jurisdiction, as well as the choice of a tax haven, which must be based on the optimal combination of a number of factors. In addition, part of the processes will inevitably have to be operated remotely, since we are separated from most typical offshore companies by at least several time zones or they are located in another hemisphere.

Thus, even an attempt at independent offshore registration does not cancel the need in certain situations to seek the help of a qualified lawyer who can provide legal advice, check the correctness of the prepared documents or establish an effective dialogue with the registrar in the offshore territory.

You can find a professional company or submit a request for company registration in Antigua and Barbuda on this page.

You can buy a ready-made offshore company here.