A lot of us remember the infamous “Panama Papers” leak of 2016. It left a bad taste in the mouths of thousands of people who were concerned with both the legality and morality of offshore companies. However, as President Barack Obama said after the leak in 2016, these activities are not illegal.
Most of us learn that tax evasion is illegal. However, a lot of us fail to realize or learn that tax avoidance is not illegal. In principle, offshore companies engage in tax avoidance when they transfer their wealth elsewhere.
If you’re interested in forming an offshore LLC and are unsure as to what is legal and what is not, follow along. We’ll give you a quick rundown on what to expect with Anguilla company formation and how to avoid getting in a sticky situation.
Forming an Offshore LLC Legally
The first step in this process is realizing that global tax avoidance is legal, even if the media tells you otherwise. Thousands of companies and wealthy individuals have used offshore LLC’s to maximize their wealth. This includes minimizing probate when they die, holding property in another country, and protecting their assets.
The actions taken by you and other shareholders of the company is what can make this process illegal. Here’s a quick guide of what not to do when you’re setting up or running your offshore company:
Protect Your Data
The misuse of personal data by employees in your offshore branches can lead to a number of legal issues. It’s harder to control where your data is and how it’s being used when you outsource. Make sure your privacy and security requirements are up to par, if not more strict, for your offshore company.
Foreign Jurisdiction Laws
Understanding which foreign laws are at play is imperative to the operation of your business. Different countries have different laws regarding privacy, for instance, so sending sensitive data from your offshore company in India to Canada, for example, can land you in hot water if domestic an foreign privacy laws differ.
Laws can change in the blink of an eye, and it’s up to you to keep track of what aspects of your business are being compromised by international and domestic law. Remember, just because offshoring is not illegal, it doesn’t mean you can’t engage in other illegal activities.
Offshore LLC’s typically get a bad reputation. Most people believe the act to be illegal since few understand the difference between tax avoidance and tax evasion. If your business would thrive from an offshore LLC, it’s important to be smart about the transition.
Anguilla company formation can pay off greatly, especially if you are interested in acquiring land and protecting valuable assets, but it can quickly backfire if you don’t do your homework.
If you’re interested in learning more about the offshoring process or how to establish your own offshore LLC, don’t hesitate to check out our other content. We specialize in offshoring to Anguilla and have provided comprehensive financial management and administration for clients worldwide.