offshore countries. Offshore: what is it in simple words

Offshore zone

Offshore zone– a territory where low taxes are legally fixed, or completely absent taxation for companies certain type, and there is also a simplified system for registering legal entities and, as a rule, conditions have been created for relatively anonymous business. For these benefits, companies are most often charged a flat annual fee.

The word "offshore" comes from the English off-shore, which literally means "out of the coast", that is, not in the UK. The history of the development of offshore jurisdictions begins in antiquity, when trading operations were carried out on separate islands of the Mediterranean in order to avoid paying taxes and duties. One of the first such zones is considered to be the island of Delos, the capital of the Athenian Maritime Union, where Phoenician merchants conducted free trade, avoiding the taxation system of Ancient Greece. In the Middle Ages, such European cities as Livorno, Trieste, Sibenik became such zones.

The first offshore zones in the modern sense are Switzerland with its banking legislation that protects deposits, as well as the Netherlands. Later, in the 1960s, the former colonies of the British Empire became the main offshore centers.

To date, there are several dozen offshore companies. There is no exact figure, since there is no single definition of them: different legislations use different criteria for classifying jurisdictions as such territories.

Offshore zones are divided into several groups:

• Classical offshore companies – as a rule, these are small island states that provide an opportunity for a moderate fee to register an international company on their territory to conduct business outside this country. Examples of such zones are the British Virgin, Bahamas, Cayman Islands, etc.;
• offshore zones with low level taxation - territories where income tax is paid, but in a smaller amount than in neighboring states. An example is Cyprus, where corporate income tax is 10%;
• territories, strictly speaking, that are not offshore: the state of Delaware in the USA, Ireland, Great Britain, etc. However, the absence of operations and, consequently, income in the country of registration allows companies not to pay local taxes. This gives such firms the opportunity to participate in tax planning schemes.

Offshore jurisdictions can be used for several purposes. Firstly, for international tax planning, i.e. in order to reduce the amount of taxes paid. Secondly, to hide the true owners of the business. In this regard, offshore business has undergone great changes over the past twenty years. Worldwide fight against money laundering and international terrorism makes companies registered in such zones more transparent. To date, a sufficient number of barriers have been created to ensure that offshore zones are used for frankly criminal purposes. Most often, however, local legislation does not consider tax evasion in other countries to be a criminal activity. In this case, the services of a nominee director and nominee shareholders are often used.

Thirdly, offshore companies are used to simplify transactions and to bypass restrictions associated, for example, with the currency laws of some states. Thus, when making transactions with funds held in an offshore account, there is no need for currency control procedures.

Companies, banks, investment funds, and trusts are most often created in offshore zones.

Many developed countries, such as the UK, are loyal to doing business through offshore zones. It is believed that individuals and companies that withdraw funds abroad may receive tax advantages, but at the same time they lose reliable legal protection. At the same time, it must be taken into account that when a UK citizen receives money from a business abroad, wherever he is, this income is taxed income tax. Therefore, the use of offshore schemes is an opportunity only to defer tax payments, but not to get rid of them altogether.

Other states are taking actions aimed at reducing operations in offshore zones. So, the corresponding laws are adopted in the USA. In Russia, payments to certain countries are regulated by currency laws and instructions of the Central Bank, which may limit payments to classical tax-free territories.

The main documents regulating the actions Russian organizations with offshore companies, serve:

• Federal Law of December 10, 2003 No. 173-FZ "On currency regulation and currency control";
• Bank of Russia Ordinance No. 1317-U, dated August 7, 2003, “On the Procedure for Establishing Correspondent Relations with Non-Resident Banks by Authorized Banks Registered in States and Territories Providing a Preferential Tax Regime and (or) Not Providing for the Disclosure and Provision of Information when Conducting Financial Transactions (offshore zones)";
• order of the Ministry of Finance of the Russian Federation dated November 13, 2007

What is an offshore zone?

An offshore zone is a territory or a state where, at the legislative level, it is allowed to register legal entities with significant tax incentives or completely exempt from taxes. Typically, such privileges are achieved through the fulfillment of certain conditions. In most cases, the main condition is the receipt of income by an organization outside a given territory or state. Offshore jurisdictions specialize in providing commercial and corporate services to non-resident companies, as well as investing offshore capital.

The term "offshore financial center" appeared in the 1980s. According to the definition of the IMF, such zones are all states whose financial sector is disproportionately large in relation to the population.

Offshore zone- a jurisdiction or country providing financial services to non-residents that is disproportionate to the size of the financial sector of its own economy. (A. Zorome, IMF working paper)

According to this definition, both the US and the UK should be included as offshore centers. They are considered as such because large numbers population, as well as membership in international organizations (OECD, G20, etc.).

Attitude towards offshore companies in the modern world

Offshore zones are often referred to as "tax havens". The opinions of experts about such jurisdictions are polar. Defenders argue that offshore centers with good reputation, are quite legal and are an important element international trade. Thanks to the tax-free structure, they provide an opportunity to effectively manage risks and optimize cash flows. quite simple, and the cost of maintaining it and the degree of openness of data depend on the zone. Opponents believe that similar formations often used to conduct suspicious or illegal activities.

The international community has been paying close attention to offshore zones since 2000. At the G20 meeting held in April 2006, it was decided to take action against jurisdictions that refuse to cooperate (ie exchange information). The initiatives put forward by the IMF, FATF, OECD had a significant impact on offshore companies. Most of these jurisdictions have tightened their legislation on money laundering and other illegal activities. Today, the most "obedient" zone is Jersey. It implements 44 of the proposed 49 recommendations.

Specificity and development of offshore zones

The budget of offshore jurisdictions is replenished not due to tax deductions, but due to annual fixed fees charged for renewing the registration of a company. Typically, such financial centers are small states with a small population. And the annual fees are enough to ensure a high standard of living in the country. The influx of investors and business owners into the state allows creating jobs. The profits of companies that register and service non-resident legal entities are comparable to income from payment of registration fees.

The active development of such financial zones is caused by a constant increase in the tax burden in developed countries. According to experts, on this moment up to half of the world's capital is located in low-tax or offshore jurisdictions. Today there are up to 70 financial offshore centers in the world. Another 100 states would not mind becoming such.

The word "offshore" by itself does not have a precise meaning. The term simply reflects the fact that most of these zones are located in island nations. It is usually used to designate a jurisdiction that is outside the control of countries with a significant tax burden.

In the 80s-90s of the 20th century, the impression was that highly developed states did not have the desire or the necessary influence to control offshore companies. Perhaps this situation is explained by the fact that the richest people on the planet widely use these zones to preserve and increase their capital. This connivance led to an increase in the number of offshore companies due to the fact that many countries with a backward (mainly agricultural) economy decided to become such a "tax haven". Now their main business is selling tax breaks.

Developed states are systematically trying to restrict their citizens from using offshore companies. It's the only thing they can do. But over several decades of their existence, offshore centers have created a perfect legislative framework which protects the interests of company owners. Therefore, attempts to introduce restrictions usually turn out to be ineffective. The situation was exacerbated by the advent of the Internet. Global network allows you to trade remotely software, media files, sell various services. Therefore, citizens of highly developed countries can easily circumvent the restrictive measures of governments.

Classification of offshore zones

Offshore jurisdictions are quite diverse. They serve the diverse purposes of corporations and individual entrepreneurs. In the country of residence of the latter, such purposes are not always legal. But the anonymity provided by offshore companies allows saving the owners of such companies.

For people who have not previously encountered offshore companies, the word "offshore" can be intimidating. Thanks to the efforts of highly developed countries, it has a negative connotation and is sometimes even associated with terrorism, which is not true. There are many talented professionals who are able to create completely legal schemes for using companies registered offshore in almost any business area.

Offshore centers can be divided into 3 categories.

1. Classic offshore. Companies registered here are completely exempt from taxes on income received outside the state. Examples of classic zones are the Seychelles, Belize, Panama. Such centers do not require the maintenance and regular submission of reporting documents on finances. An additional advantage is elevated level privacy. The use of a nominee service further increases anonymity. The authorities of classic offshore companies do not make any attempts to take control of the activities of companies that are registered there. Centers of this type are usually characterized by political and economic stability. Classic offshore companies are constantly improving their own legislation to make it more attractive to entrepreneurs. Maximum attention is paid to the protection of capital, data confidentiality. It is also important that registering a company in a classic offshore zone is very simple.

2. Offshore with low taxation. Alternative name- offshore jurisdictions of high respectability. Compared to a zero rate on profits, a 10 percent deduction may seem significant. On the other hand, in some states income tax can be as high as 45%. And, by comparison, the 10 percent rate seems low. In such areas, companies are generally required to keep accounting records. Reporting is submitted annually. Some countries also require an audit. The register of shareholders and directors is kept, the data from it is in the public domain. But the use of a nominal service allows you to ensure confidentiality. Registration and maintenance of a company in such a zone is more expensive, but the reputation legal entity will be higher. The centers of "high prestige" are Gibraltar, Ireland, the Isle of Man, etc.

3. States that are not full-fledged offshore, but provide certain tax benefits to legal entities. The level of trust in the partners registered there is increased due to strict reporting requirements. As an example, we can cite the UK (in relation to LLP companies), Cyprus.

Offshore functions

International trade and investment. Offshores are channels for international trade and facilitate the promotion of financial flows. According to statistics, in the states that work closely with them, more money in the economy, and lending rates are lower. Offshores are becoming increasingly important as investment channels in risky markets. For example, over 44% of direct investment in the Indian economy came in 2011 from the island of Mauritius. A third of such investments came to Brazil also through offshore companies.

Registration of aircraft/ships. Another traditional use of offshore companies is the registration of aircraft and ships (in the Seychelles, Bermuda, Bahamas or Panama). For example, Pakistan Airlines re-registered its entire fleet in the Cayman Islands in 2003. This was necessary to obtain a loan for the purchase of 8 new Boeing-777s. An American bank refused to accept Pakistani-registered planes as collateral.

Insurance. Many offshore companies register insurance firms and companies operating in the reinsurance market. Bermuda is the leader in providing these services. Even the largest insurance companies in the world move their business to this zone in order to improve risk management and reduce the tax burden.

Banking. Traditionally, a number of offshore zones offer banking licenses. For example, the Bahamas has 301 licensed banks, and the Cayman Islands - 295. At the same time, BVI has only 7 such banks.

List of offshore zones

The list below is not exhaustive. It contains only the main offshore zones.

• Bahamas. Many ships are registered here. Previously, the Bahamas acted as the dominant offshore zone, but after gaining independence in the 1970s, they lost their top positions.
• Belize. It is characterized by maximum simplicity and ease of use among offshore jurisdictions.
• Bermuda. It is the leader of the offshore insurance market. Bermuda is also popular as a place of registration of ships.
• Virgin Islands. The largest number of non-resident firms is registered in this zone.
• Jersey. This is the most regulated jurisdiction.
• Cayman islands. This zone plays a significant role in asset management.
• Mauritius. Used as an investment platform for the African, Asian and European markets.
• Seychelles. Here is one of the lowest costs of maintaining foreign companies. It is not surprising that as an offshore Seychelles enjoy well-deserved popularity among entrepreneurs from all over the world.
• Singapore. This is an international center for financial asset management, a place where hedge funds are concentrated. Good for private banking.
• Panama. Significant maritime international center. Today, Panama is the second largest offshore and second only to the Virgin Islands in terms of the number of registered companies.

Good day! This article will discuss what “offshore” and “offshore companies” are, as well as analyze their advantages and disadvantages. Today, the budget of each country is built according to its established scheme. So, countries with more developed industries thrive on taxes from the profits of production, countries with developed tourism exist from deductions from the income of travel companies, etc.! But in this whole chain there are countries that are trying, and today survive at the expense of foreign entrepreneurs! Such countries are usually called "Offshore". Let's take a look at what this concept means.

Offshore - this is a financial zone (country) in which a citizen of another state registers his business on favorable terms (ie with a minimum tax rate), in the so-called offshore companies! Based on this, an offshore company is a company officially registered outside the country where the business is located. The possibility of withdrawing their financial resources to a country with high economic stability and a proven level of banking secrecy gives entrepreneurs hope for the safety of their monetary assets.

For example, a business owner who is registered in Russian Federation, is required to pay monthly tax in the amount of 20% of his income. If he makes his company offshore, he will pay 5% to the country in which his business is registered. This is especially beneficial, of course, for island states, where there is no fully developed industry of their own, it is these countries that survive at the expense of offshore companies !!! Such countries are divided into three categories, lists:

1. The white list is as close as possible to the world standard of taxation.
2. Grey list - countries, in which they are only going to bring the percentage of taxation closer to the world standard.
3. Black list - probably the most preferred today, a list of companies that do not even think about implementing world standards

There are many offshore countries that are actively used by businessmen, but you cannot classify them according to the parameters better or worse, they all have their pluses and minuses!

A few principles of operation of such a taxation system

Let's take a closer look at the advantages and disadvantages of various types of offshore zones. We divide them into three types:

1. classic :

• Advantages:

– no taxes;

– lack of state control;

- there is no need to submit reports;

- the most high degree privacy.

• Flaws:

– distrust on the part of serious international firms;

- the territorial location is not always convenient, because "Distant" companies increase management costs.

2. Prestigious:

• Advantages:

– the prestige of companies established in such zones is significantly increased;

– the possibility of cooperation with serious partners.

• Flaws :

The need to provide financial statements;

- Incomplete exemption from taxes.

3.Other :

• Advantages:

- with a properly built scheme, taxes can be effectively minimized;

- in fact, these zones do not belong to offshore, so there is no bias towards them.

• Flaws:

– beneficial not for all enterprises;

- reporting is required.

Today, offshore companies are very popular among owners of large and medium-sized businesses, for them it is very profitable. The main advantage of transferring business to offshore zones is that the company gets the opportunity to increase its net profit from its activities by legally reducing taxes.

Consider the positive and negative sides offshore for owners of offshore organizations.

Advantages of offshore companies:

1. Obtaining the status of a foreign company.
2. Tax optimization.
3. Storage of capital in a country with a stable economy
4. Lack of currency control.
5. Confidentiality.
6. The ability to freely manage in cash making settlements with companies of all countries.

Disadvantages of offshore companies:

1. Negative image.
2. Inability to get large loans
3. Special attention to offshore companies by representatives of international law.
4. Big risks.

In conclusion, I would like to consolidate the topic of the article by formulating in detail the concept of "Offshore zone" - this is a financial zone with favorable tax conditions, where foreign capital is attracted. The economies of countries that receive less money suffer greatly from this! The outflow of money will be observed until all countries have equal conditions for taxation. And this is incredible!

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The modern world is rich in tax avoidance schemes - this is data distortion accounting, illegal use of tax incentives, fictitious barter, etc. Often large enterprises use intermediary firms registered in offshore zones. Offshore zones have been used since ancient Athens.

offshore(a term from the English offshore - “out of the shore”) is a territory where for foreign companies, when doing business, special conditions when paying taxes, a simplified reporting procedure, the possibility of registering a company for other persons. in plain language, offshore companies are needed to give them the opportunity avoid paying taxes effectively.

Offshore company

A company registered in an offshore zone with the provision of certain benefits is called offshore.. Its features:

• Control over this company is outside the offshore zone;
• The minimum amount of tax payment;
• High guarantee of anonymity.

offshore account

Offshore company opens offshore account, that is, in fact, an ordinary bank account, which serves both for the accumulation and for saving funds. Its advantages:

• The procedure for opening it is simplified;
• A minimum number of documents is required;
• High level privacy;
• Minimized checks by regulatory authorities;
• Banking operations are carried out without any particular risk.

This enables companies to save capital without much risk.

An offshore account can be opened by both a legal entity and an individual.

Offshore schemes

Offshore companies use different schemes of work. The most common classical scheme is the registration of a company. A foreign company, becoming the founder of the company, is entitled to dividends, which are subject to a minimum tax.

It is possible to register a company for the supply of goods, carrying out export-import activities, when the profit from this type of activity remains in the offshore zone, which allows you to artificially either raise or lower prices. The difference in the price of the goods is not controlled and is not subject to taxes.

AT recent times banking became popular. Successful businessmen open "their" banks. They can be opened under certain persons or one person. Offshore banks are created at minimal cost. Having your own bank is convenient because it allows you to make payments with minimal taxation, and provides ample opportunity for financial planning. An important advantage of an offshore bank is the distribution of funds in different currencies when conducting foreign trade operations.

Offshore zones for conducting various types of business

Offshores are a kind of free economic zones. Below are offshore zones by types of advantageous locations.

• Reduced Taxation:
  UK, Cyprus, Scotland.
  Companies can legally avoid paying taxes.
• By business area:
  Holland, Latvia, Poland, Switzerland.
  In these countries, it is advantageous to register tourism companies, agriculture, IT-technologies, since taxation for such activities is optimal.
• Research in the field of high technologies:
  China, Singapore.
• To conduct an honest business:
  Cyprus, Switzerland, Estonia.
  These countries offer low taxation, successful development of companies without problems with the law.
• When choosing an offshore zone, it is necessary to thoroughly study the current laws of the country, carefully analyze your activities and correctly prioritize the selected offshore territory. For example, small states with a low level of development of their economy they have low reporting requirements, they have an annual fixed fee for state revenue, there is no register of enterprises, and strict anonymity. These countries are politically stable. For example:
  Bahamas, Belize, British Virgin Islands.
• Respectable offshore zones, on the contrary, impose increased requirements for financial reporting, provide tax benefits, maintain a register of enterprises. However, prestigious companies operate in these zones. For example:
  Cyprus, Hong Kong, Luxembourg, Switzerland.

Attention!

An offshore zone should be distinguished from a free economic zone. If a company operates outside its territory, then this is an offshore zone, if it is a free economic zone on its territory.

Pros and cons of offshore

The main advantages of using offshore:

• Tax incentives or no taxes;
• Protection of financial investments;
• Minimal risk;
• Minimum cost;
• High privacy;
• Simplified legislative regulation.

The main disadvantages of using offshore:

• Distrust of offshore enterprises of global companies;
• Difficulty in obtaining a bank loan;
• Risk when choosing an economic zone;
• Close attention international bodies to the companies they are interested in, which can harm the prestige of doing business.

Offshore zones are controlled by the International monetary fund and some banks various countries peace.

Individuals and corporations, seeking to protect their assets, with the help of offshore companies are in search of safe place for carrying out activities and investing finances, as well as seeking to reduce tax payments to a minimum.

When choosing an offshore zone, it is necessary to carefully study the laws of the country. Do not forget that many states are concerned about the mass distribution of offshore companies. Some states have a blacklist of offshore companies. Tight control is exercised over the companies from this list.

The term "offshore" (offshore, offshore) - literally translated as far (off) from the coast (shore) or " mainland”, which indicates the withdrawal of capital to the islands. This is not always true, because such preferential zones are also present on the continents. On the other hand, in American slang, the very word "shore" is often interpreted as "to deprive of something" or "to rip off like sticky." Thus more exact definition will be - "outside the territory where they take too much from you." There is another meaning of the word "shore" - a region or region, which indicates the registration of a company outside the region of operation.

For the first time this term was used in the middle of the last century, although the very practice of moving a business to zones with preferential taxation was used by the ancient Greeks. To date, offshore is a country, region or certain territories that provide foreign companies with reduced tax rates, as well as a simplified system of registration and filing reporting documentation. They are called offshore zones. There are more than fifty of the latter in the world. These include both island territories (Bahamas, Virgin Islands, Aruba, Cayman Islands, Cyprus) and mainland states (Costa Rica, UAE, Andorra, Monaco, Liechtenstein).

Thus, if we talk about what an offshore company is, then it is a company registered in an offshore zone, but conducting activities outside it. The advantage of creating such conditions for the states and regions themselves is the easy attraction of foreign funds to the budget. Most often, by providing the opportunity to register companies, the country receives a fixed remuneration, and sometimes the employment of the local population, while the main activity of the enterprise is in its own country.

For many, the concept of an offshore account is often associated with violation of the law, fraud or concealment of real income. And it must be admitted that this is indeed the case. main method state struggle with such actions is the tightening of requirements for cooperation with similar firms for resident companies, as well as the imposition of sanctions on the offshore zones themselves by various international organizations. This means that when choosing a suitable offshore zone for yourself, you must first of all check whether it is included in the "black" or "grey" lists.

Schemes of work in an offshore zone and stages of company registration

In practice, to open a company in a privileged zone, you can register from scratch or buy an offshore company already registered in the country you need. To do this, it is not necessary to make a trip to the offshore zone itself, but it is enough to order a service from an intermediary company. Since a certain fee is charged for this, before choosing this path for yourself, it is important to understand to whom and in what cases it will be really beneficial.

Purposes of registering a company offshore

FROM practical side the purposes for which offshore firms and accounts can be opened are not only tax cuts. In reality, they include quite a wide range of business opportunities:

• Carrying out export-import operations. This is the most popular scheme that allows you to reduce the price of goods as much as possible when exporting, sending it to an offshore company, with subsequent resale to the actual buyer at a real cost. The difference remains offshore. In turn, when importing maximum reduction prices are carried out to reduce VAT and customs duties. Sometimes companies working on the USN are involved in such a scheme.
• Opening bank accounts. The main purpose of such accounts is the accumulation and saving of capital, as well as the performance of various banking operations. Such accounts are not subject to inspections by the tax authorities (unlike standard accounts in foreign banks), and financial institutions themselves do not disseminate information about the amounts of money of clients. Such accounts can be opened not only by companies, but also by individuals.
• Tax cuts and efficient planning.
• Exclusion of double taxation. This option is used when doing business on international market with a wide range of countries.
• Liquidation of enterprises. The use of offshore in this case allows you to speed up the process, as well as solve the problem of the company's existing debts to creditors or the budget. To do this, the founders of the company include a nominal offshore company, after which its main participants leave and are replaced by CEO, which completely brings the company to the preferential zone.

Types of offshore companies

By type of activity for offshore companies, the following areas are most popular:

• Investments. Conducting investment activities through offshore allows you to reduce taxation, as well as protect your capital from creditors in case of bankruptcy or default. This is implemented through the creation of funds, trusts, investment portfolios, management companies and holdings.
• Insurance. A common way to reduce taxation and increase profitability is the creation of a captive insurance company (a subsidiary that serves only the parent company). For example, this can be used when self-insurance is not allowed by the legislation of the state in which the activity is carried out. Also, this method allows you to carry out insurance for cases that are not included in the list of insurance in commercial insurance companies.
• Banks. Such institutions can only cooperate with offshore or foreign firms and individuals. It is impossible to cooperate with citizens of the country in which such a bank is registered (i.e. the offshore zone itself), as well as companies operating in it. The creation of a personal offshore bank for banks and large companies provides an opportunity not only to receive tax benefits, but also to organize their own payment center without the involvement of foreign intermediary banks.
• Shipping companies and shipping companies. Registration in the offshore zone of such companies allows you to almost completely avoid taxes on the provision of cargo transportation services.
• international trade. Here, import and export schemes are applied through their own offshore companies. In this case, the goods are sent directly from the seller to the buyer, and the offshore intermediary participates in the scheme only on paper.
• Property Management and Ownership. In practice, an offshore company may own residential and commercial real estate, and even manufacturing facilities. The territory of such objects remains under the jurisdiction of the country in which they are located, but tax liabilities for them will be transferred to the privileged zone of the right holder. This means that by selling or renting out such property, you can minimize taxes. Moreover, in fact, the information about who owns this property is completely hidden in reality. If we talk about production facilities, then taking them offshore also makes it possible to protect the company from raider takeovers, since in this case the interception of assets is impossible.
• Leasing. The creation of a leasing offshore company allows you to purchase equipment, reducing tax deductions on it. Such a nominal company acquires the required property and leases it to the parent company. Payable regular lease payments are included in the cost price, reducing the final amount of income tax for the main company, while offshore has reduced rates on payments received.
• Licensing. Getting a license offshore is much easier, which is actively used financial institutions(online casinos, forex brokers, non-bank credit companies, travel operators, providers).
• Intellectual Property and Franchising. To reduce taxation when receiving income from the sale of a license or franchise, you can transfer the rights to your own offshore company. In this case, the parent company will no longer have official rights and will also need to obtain a license and pay royalties. Such payments may be taxed on the repatriation of income, if there are no agreements between the countries (in which the activity is carried out and the offshore zone) that allow avoiding double taxation.

Offshore company registration process

If you decide that the registration of an offshore company is a profitable option for you, you need to know what stages this procedure consists of. First of all, make sure that the area you have chosen is suitable for the implementation of your goals. Next, select the name of the company to be created that suits the activity. Please note that it must meet the following requirements:

• The name should not match or be consonant with existing companies registered in the relevant offshore. You can check the company name in special web registries.
• Lack of associations with government bodies.
• If the name contains the words - bank, trust, fund, insurance, it can be registered only if there is a license to conduct such activities.
• The name should not contain obscene language, as well as words indicating terrorism, racism, violence, humiliation, insult to personality and religion.

If the name is approved by the registrar, the next step in registering an offshore company is to draw up the constituent documents. It is issued in printed form and defines the types economic activity companies, as well as the ground rules. The charter or memorandum of association must be drawn up in the official language of the country in which the registration takes place. Mandatory signatures of all directors (founders, shareholders) and certification by a notary. When processing documents through an intermediary, the services of nominee directors or shareholders are often provided, which speeds up the procedure and allows you to hide the name of the true owner.

The next step is the formation authorized capital. Here it is necessary to know whether its minimum size is established by local legislation and how it affects the tax rate received in the offshore. Also required for registration. legal address, which will receive requests from the tax service.

A ready-made offshore company or registration through intermediaries will save you from these difficulties, but will require financial investments. Cost depending on the area full complex services can range from US$2,000 to US$20,000 per year. Similarly, opening an account in an offshore bank will be a paid service from $500. On the other hand, it is easier and sometimes cheaper than doing everything yourself. To create a company through an intermediary, you only need documents confirming your identity and place of registration, as well as a description of the type of activity.

Pros and cons of using offshore

Creating a company in an offshore zone is very beneficial for an entrepreneur. After all, it gives whole line advantages:

• Quick registration;
• Concealment of information about the real beneficiary;
• Low taxes and minimal reporting;
• Possibility of opening a bank account in any country of the world;
• Safe accumulation of capital abroad;
• Managing by proxy.

On the other hand, this option may not solve your problems and even create new ones. So, in practice, you may encounter the following disadvantages:

• Close attention from the control bodies of international and state law.
• Differences in legislation. Before opening a company, you need to study well in which zone it is better to open your type of business. It may turn out that the territory with the most attractive benefits has problems with licensing your activities.
• Business Loss Risk. Since you work through representatives and are not familiar with the law, you can become the target of scammers, especially if you buy a ready-made company.
• Problems with getting loans. Offshore companies do not inspire confidence, and the chance of getting a loan is minimal.
• Negative reputation. Registration in an offshore zone is associated with fraudulent activity, since there is a legal concealment of data about the real owners.
• High maintenance cost. This disadvantage is typical for small enterprises and manufacturing companies operating exclusively within one country. In this case, only the use of offshore accounts for capital accumulation will be rational.

Understanding the meaning of the term offshore - what is it in simple words and what are the possible schemes for its use, you will be able to apply new opportunities in the practice of maintaining own business gaining benefits for its development.