Guide To Registering an Offshore Company | Just 4 Steps
You want to register for an offshore company but don’t know where to start or what to prepare? You have come to the right blog!
In this blog, we’ve summarized 4 simple steps on how to register for an offshore company.
Step 1: Choosing your ideal offshore jurisdiction
First thing first, let’s talk about an offshore company definition! In simple words, an onshore company is a legal entity that is founded in one country with the primary purpose of operating within that specific border. Now you’re good to go!
The first fundamental step is to pick your ideal offshore jurisdiction. There are a variety of offshore countries that can be your dream destination. Besides, the setup requirements for an offshore company can differ from jurisdiction to jurisdiction. With that being said, putting a cautious examination of your choice in terms of an offshore jurisdiction is very crucial.
Here are the questions that you should answer when choosing your ideal offshore jurisdiction:
- How will your company be taxed in that jurisdiction?
- Will residency status affect your company registration there?
- Are you a resident of a nation that is applying the CFC laws?
- Is that jurisdiction economically and politically stable?
- Is the legal framework stable? If not, how will your company be affected?
- How is the banking system? What are your chances of opening a bank account there?
- What are the reporting obligations in the post-incorporation stage?
The above questions are just the key factors to consider. In fact, choosing your ideal offshore jurisdiction is much more complicated than that.
The primary rule is that your decision of an offshore country should depend on what you need.
If you work in the fintech business and are searching for an innovative country, with tons of opportunities with Asian markets, Hong Kong or Singapore are the top-notch choices.
Both these jurisdictions provide a favorable tax regime and pro-business regulations that are suitable for start-ups and SMEs.
However, if you need a strategic location for trading and logistics, a secure banking system, or tax treaties, then an International Company in RAK is the right choice.
Researching everything on your own might sound like an interesting option. But consulting an expert in terms of offshore jurisdictions is highly recommended for a faster and better offshore company registration process.
Step 2: Deciding on the business structure of your offshore company
Even though this is the second step, you should also consider the business structure while researching your best-suited jurisdiction.
There are four most common offshore company types around the globe:
International Business Company (IBC)/Business Company (BC). This type of entity is most popular in the Caribbean offshore regions and is widely-opt for jurisdiction. Most business owners decide to go with this type of company to carry out international trade or establish banking identities with complete confidentiality and anonymity.
Here are some advantages of an IBC:
- Tax exemption
- Fast and easy to incorporate
- Few maintenance requirements
- Easier to open a bank account
International Limited Liability Company (LLC). This type of entity is a mix of two well-known business types – a firm and a partnership. Belize, Nevis, Seychelles, St. Vincent & Grenadine are places you should consider if you want to register for an LLC.
Below are what an LLC has to offer:
- Separate legal entity
- Members of the company also have decision-making rights when it comes to operating business
- Tax exemption
- Few compliance requirements
International Company (IC). An IC shares many similar features with an IBC. IC is widely-incorporated in offshore jurisdictions such as RAK, Samoa, etc.
So, the advantages of an IC are:
- Minimal annual maintenance requirements
- Tax exemption
- Privacy guarantee
Private Limited Company (Pte Ltd). This is a type of offshore entity in Asia, Hong Kong and Singapore to be exact. This offshore company, like an LLC, offers limited liability to all of its shareholders.
Pte Ltd has the following factors:
- No major influence when the company decides to change any of its shareholders
- Easy transfer of ownership through sales/resales of shares
- Low tax rates
- Tax Exemption
Step 3: Picking a suitable company name
The third step is to name your company correctly! An offshore company name must fulfill certain requirements. Typically, the approval for your company name is granted by the Company Registry or Company House in offshore regions.
Here are some principal notes when it comes to your company name:
Your company name isn’t equivalent to or like some other company name.
- Avoid restricted words
A company name isn’t permitted to contain restricted words. Which words are restricted are regularly prescribed in the company laws.
- Inclusion of suffixes
Your company name must end with a suffix which demonstrates the company structure. To a clear understanding, an LLC company name isn’t viewed as qualified in the event that it doesn’t end with “Limited” or its shortening “Ltd”.
Name requirements of an offshore company can differ from nation to nation. A little tip is to carefully check the qualification of your company name prior to informing the in-charge agency.
Step 4: Preparing all the required documents
The final step is to gather all the required documents as per the law of your ideal offshore jurisdiction. You will need all of these documents to complete your offshore company incorporation.
Essentially, there are some primary documents that you need to submit to the Registrar:
- Passport or other equivalent verification proofs
- Residential proofs
- Company description or Business review
- Certification of Incorporation *
- Memorandum of Association *
- Registers of Directors and Members *
- Additional documents as requested.
(*) These documents are needed just in the scenario where one of your company’s shareholders is a corporate body.
And that’s it! With 4 simple steps, you are ready to run your offshore business in your ideal offshore jurisdiction. So, is it hard to register for an offshore company? ‘No’ might be an over-confident answer. But with all the insights of this blog, we hope you get the most basic information on how to register your offshore company.