Nowadays, a high number of business owners choose to set up an offshore company for their specific business needs. But what exactly does an offshore company mean? Simply, an offshore company is a company that is established or registered outside of one’s country of residence as a result of the legal and/or tax-related imbalances between the country of origin and the country of the company registration.
While it may vary from one jurisdiction to another, an offshore company’s characteristics usually include:
- Not being subject to taxation in their home jurisdictions,
- Offering business flexibility,
- Mitigating taxes or removing company taxations and/or regulations,
- Limiting or eliminating the public disclosure of company information,
- Removing regular corporate mechanism that consist of financial assistance rules and corporate capacity limitations which cost extra fees.
Offshore companies offer investors and business owners a wide variety of operational benefits in terms of asset protection, tax liability, legal privileges, privacy, and flexibility, and could help facilitate international growth, in addition to the overall simplicity and ease of operation.
Privacy privileges
In terms of privacy protection, offshore companies help keep conducting business deals and arrangements and making banking transactions in secrecy. What’s more, in some “tax haven” regions such as Dubai or Ras Al Khaimah, you do not need to go public as the owner or the shareholder of your offshore company. With an offshore business, you can enjoy the significant benefits of confidentiality and anonymity while growing your business.
Easy asset management
Another advantage of offshore companies is that business owners or shareholders of the company can protect their assets from possible legal responsibilities that could come about in the future. As long as these assets (trusts, investments, banks accounts, and other financial possessions) are registered with an offshore company, they are effectively protected since there isn’t a technical connection between the company owner and the assets, much like the company itself.
Legal protection
This asset protection comes in handy for when the company owners are faced with legal issues that lead to an asset search, as tracking assets and financial worth that are incorporated offshore through a search database is pretty difficult. That way your assets can be shielded from legal opponents and legal rulings.
