7 Reasons Why You Need an Offshore Company
Offshore Companies and their Uses in the 2020s
Offshore Companies have been much maligned in recent years by the mainstream media.
Data thefts from offshore law firms demonstrated how widespread the use of offshore companies is amongst the wealthy.
There are of course many legitimate reasons why people use offshore companies. These can include:
Minimise or Eliminate Tax Liabilities
Offshore Companies can be structured to legitimately minimise corporation tax liabilities.
Multi nationals use strategies like having a company in a tax haven own your brand and charge royalties for the use of the brand to the operating company in a high tax jurisdiction.
This has the effect of legitimately moving the profits of a company to a low or zero tax jurisdiction.
Many Hong Kong companies buy goods from China and add a mark up before they are set to Europe or the US.
This ensures that at least some of the profits on the transactions stay in low tax Hong Kong. There are multiple variations of these strategies.
2. Protect Your Assets
If you’re even moderately wealthy you can be a target of people and organisations who want to steal your hard earned assets.
These range from tax collectors, hostile spouses and envious employees.
Wealthy residents of high tax jurisdictions it can be sitting ducks for litigation. If a big legal case goes the wrong way you could be wiped out.
Of course courts can’t touch assets you have secretly stashed away in an offshore company. Particularly one that nobody knows anything about.
3. Legally Avoid Inheritance Tax
Inheritance tax rules vary between jurisdictions.
They are amongst the most unfair of tax rules as they seek to tax assets that were already taxed when they were earned.
If you hold your wealth in an offshore company you can plan so that inheritance tax need never affect you or your heirs.
4. Iron Clad Privacy
Everyone has a right to keep their affairs private.
When you have an offshore company you will not have to submit details of assets or profit and loss for public inspection.
You could legitimately keep millions in an offshore company and nobody except your banker would know anything about it.
5. Access to Investment Funds
Some funds and investment opportunities are closed to investors from the USA, Canada and Europe.
The issuers do not want to go to the expense of complying with regulations in those jurisdictions.
You can get around this by investing with an offshore company that’s not subject to the prohibitions.
6. Buy Overseas Real Estate
If you buy real estate in some overseas jurisdictions you’ll have no choice but to buy it with a local company.
Not only will it make the transaction run more smoothly, it’ll protect and keep private your newly acquired asset.
7. Better Banking Opportunities
It can be difficult with some banks to open an account for some nationalities and with some companies.
A US or UK company may have difficulties opening an account in Costa Rica or Colombia, whereas you’ll have no problems with a local company.
Your offshore company will also have better access to some of the banks products and investment opportunities.