You hear the term “offshore companies” a lot in relation to business and tax avoidance. But what entails an offshore company and how does a company register an offshore LLC? There’s a good reason that offshore LLC registrations have increased over the last few years as the tax advantages of these setups are vast and improve the bottom line greatly. In 2019, the total assets of offshore companies added up to $11.3 trillion dollars and that number will continue to rise in the coming years.
What Makes an Offshore Company?
An offshore company is any company that chooses to incorporate in a different country with different tax laws that benefit the company. A good example of this would be an American company based out of New Jersey choosing to incorporate in Hong Kong or the British Virgin Islands. The company doesn’t necessarily have to have a physical office in the British Virgin Islands, but they do have to be registered with the country as a tax-paying business which subjects them to British corporate tax laws versus American corporate tax laws.
Offshore LLC Registrations
Setting up an offshore LLC registration is a complex process that takes a while to complete which is why it’s highly advisable to employ a good service provider (essentially, a middleman) to help with the incorporation. There is paperwork to be filed with the new country and paperwork to file with the current country and certain parameters that have to be met to keep the company within legal tax status. You (or the service provider) must do all of the requisite legwork beforehand to find a suitable destination for your business. You should find out how many businesses in your field are also offshore companies and how many of those are in the foreign country that you’re researching. Research the tax laws of the new country, compare them with your home country and do some calculations on how much money you’ll save by incorporating.
Making the Move
Once you’ve settled on which country that your company will incorporate in, you should get the ball rolling and start filling out the proper paperwork to set things in motion. It’s also a good idea to find out if you’ll need a physical office in the new country or not. Some countries require it while some others don’t. Once all of your paperwork is completed and proper documents filed and registered with the new country, you are ready to make the new incorporation LLC a reality!
Follow these tips to get started with your offshore LLC registration. Professionals are always available to help, so reach out to one today!