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What is an Offshore Company? Why Do People Register Their Company Overseas

People have explored the business world more today, than in the past. Today, there is even a company known as an offshore company.

What is an offshore business? Why do people prefer to incorporate their companies offshore?

The Definition

In a few words, an offshore company is a legitimate entity, which is established in an offshore financial center or tax haven, Singapore is a good example of such places. Such company is secured by specific legislation that warrants a status of full or partial tax exemption.

Tax Advantages

There are specific rules regarding taxes for companies registered offshore. For instance, in the United States, a US expat may be exempted in paying tax for making his first $91,500. Nevertheless, this is not the main tax advantage of offshore companies.

There is also what is known as tax deferment. This means that you delay the tax payments so you can just pay them in the future.

Benefit of Confidentiality

Another reason why people register their companies overseas is the benefit of confidentiality. In certain countries, companies that are non-resident are not actually obligated to publish their financial information, not even the details about their shareholders and directors.

A lot of offshore financial jurisdictions are not required to reveal this information especially to third parties unless suspected of terrorist or criminal activities.

Lesser Legal Obligations

With offshore companies, officers or directors, almost always, have lesser legal obligations. The needs that physical offices require may be beaten as you can hire virtual services, which are more cost effective. This can save you money as well as time.

Protection of Assets

An offshore company is a valuable means in terms of holding assets like real estate investment or intellectual property. This is especially beneficial for those who have international business interests.

Lesser Maintenance and Set Up Costs

Setting up an offshore company does not only allow you to save money on tax, it can also allow you to put up lesser costs on maintenance and set up.

Compared to local business or company set up, offshore companies require lesser costs – this is especially true if you are dealing with an online offshore business or company. Moreover, to many countries, business registration is not as tedious.

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