Offshore is ... Registering a business outside the country

ABOUT

Offshore is a word with English roots. In translation, it means "off shore". Offshore is a special financial center that attracts foreign capital of companies registered in the country of its location. Such zones are quite common in the world. One of the advantages of these territories is the special taxation. Offshore is the center where preferential conditions are provided for carrying out business activities.

Historical reference

For the first time the concept of offshore appeared in one of the publications of the newspaper of the eastern coast of America in the 50s of the 20th century. It referred to a special financial structure that could avoid state control through geographical selectivity. In simple terms, the enterprise has transferred its activities, which the US authorities sought to regulate, into a zone with more favorable tax conditions. In this regard, the term in question includes both the legal, and the economic and geographical aspect. Offshore is not a modern phenomenon. It was used even in the days of ancient Athens. At that time, two-percent export and import taxes were introduced. In order not to pay them, the Phoenician and Greek merchants began to travel around the Athenian territories.

Tax havens soon began to act small islands, located side by side. They smuggled in contraband goods without duties. In the 15th century in Flanders were fairly low taxes and trade restrictions. Therefore, merchants from England were more profitable to import and sell wool there, and not at home, where there were more stringent conditions. In the US business in offshore has spread since the 18th century. In order not to pay import duties that took place in England, merchants tried to trade through the territory of Latin America. The country where the companies began to attract money on transfers of money to the offshore, was Switzerland. Against this background, exchange centers and institutions for the secrecy of capital were formed. At the legislative level, the requirement to maintain customer accounts and the simultaneous prohibition of disclosure of data was introduced. In the 70 years of the last century, some island English colonies gained independence. Remaining under the control of the United Kingdom lost their subsidies from the state budget. They switched to the independent creation of their capital. Formation of their own budget was enabled by registration of offshore companies. In recent years, other countries have also adopted laws similar to those in Switzerland. As a result, competition arose in the sphere of attracting international capital. For many island countries that do not have natural (natural) means of development, offshore is the only way to generate income.

Insular Territories

These small areas are located in the Caribbean Sea, Indian and Pacific oceans. As their main feature should be noted the absolute absence of taxes, low requirements for accounting, moderate fixed contributions, as well as a high level of anonymity and confidentiality of business owners. But in most cases, companies that are registered in offshore islands have low positions in the rating and a dubious reputation.

Other areas

The European territories are more highly rated. The content of the offshore zone can reach several tens of thousands of US dollars per year. In these countries, privileges are applied for certain types of activities. Therefore, such territories can not be called offshores in the classical sense, since taxes are paid here, audit is regularly performed, and accounts are maintained. At the same time, information on the owners of enterprises is disclosed in the general procedure.

Cyprus offshore

It is an international financial and business center. This zone is well known among entrepreneurs and large companies. Most of all investments in the domestic economy pass through Cyprus. Among the advantages of creating a company on the island is to include fairly low costs for registration, annual maintenance and submission of an annual (zero) balance. In addition, Cyprus has signed special agreements with almost all states. These treaties make it possible to avoid double taxation. Another important feature is considered the possibility of using a nominal service. It allows the real owner (the beneficiary) to remain anonymous when making transactions and legal actions of a minor nature.

Company Profile

Offshore firm is an enterprise that is registered in a zone where special benefits are provided. Companies of this type have the right to carry out their activities not only abroad, but also within their own country. Small states encourage the formation of offshore companies. So they develop this sector of the economy, which brings additional profit.

goal

The main motivation for the formation of offshore companies is the optimization of taxes. If the firm is properly structured, other advantages can be achieved. For example, to ensure:

• Protection of property.
• Confidentiality and anonymity.
• Optimization of expenses.
• Lighter reporting requirements.

The optimization of tax deductions is carried out not only by domestic, but also by many foreign companies. Among them are such giants as Microsoft, General Motors, Google and others.

Main characteristics of firms

Offshore companies have the following features:

1. They are non-resident in relation to the country in which they are registered. This means that the administrative apparatus of the enterprise is located abroad.
2. Companies are usually exempt from the basic tax amount, or its value is relatively low. As an easing, they may be asked to pay a small annual fee.
3. Simplified procedure of registration and administration. Nominee managers and owners can participate in the management. At the same time, the requirements for holding general meetings and boards of directors are formal.
4. There is no or much easier exchange control. At the same time, the requirements for financial reporting are minimal, and audit checks do not need (with a few exceptions).
5. Anonymity of possession with a high guarantee of confidentiality. This principle is based on generally accepted legal norms and legislation of the jurisdiction in which the firm is registered. At the same time, it is impossible to draw up documents for the company to date without disclosing data on the final beneficiary. Information about him is necessary in order to ensure the security of denominations.

Establish an enterprise

To open a company, you should visit offshore jurisdiction or contact an appropriate company that specializes in this area of activity. At the beginning of 2013 there were more than 100 such organizations in Russia. Firms that mediate the opening of offshore companies offer:

• Registration of the enterprise, including receipt of a seal, certificates, the necessary package of documents.
• Sale of ready-made firms that were previously created, but none and nowhere used. In this case, a long existence on the market will significantly enhance the reputation.
• Preparation of documentation and opening of bank accounts.
• Complex support in legal matters.
• Help in choosing the most suitable territory.
• Provision of nominal managers and shareholders.
• Courier delivery of mail items, forwarding received correspondence.

In addition, telephone numbers and secretarial services can be provided.