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Two decades ago the offshore industry was still relatively small and shrouded in mystique. Today it is estimated that over 60% of the world's money flows through or is held offshore. It is probably true to say that no company which trades internationally can expect to be competitive without taking advantage of the tax breaks available offshore.

Good tax planning can make the difference between success and failure but is often given insufficient attention by those starting a new business or making a new investment. "Offshore" is no longer the preserve of the very rich and our organisation has been one of the world leaders in making offshore facilities available to a wider audience.

It is not a secret, that businessmen from many countries register companies, invest their assets to the countries with low tax rates or tax exempt zones (so called, “offshore centers”). The similar activity has been widely practiced all over the world since 30ths of previous century. As an example we can mention Panama , where General Corporation Act was adopted as early as February, 27, 1927 . The Act stipulated liberal tax and currency control for non-resident companies.


In 1995 some 60,000 or so offshore companies were incorporated in the various Caribbean centres.

The most popular jurisdiction is the BVI whose registrar has incorporated approximately 200,000 IBC companies in the last ten years. Some 35,000 IBC's were incorporated there last year.

It is estimated that 15,000 companies a year are incorporated in Hong Kong for offshore purposes and another 50,000 or so in the other offshore jurisdictions.

This means that the total number of companies formed for offshore purposes exceeds 130,000 per annum.

Estimates indicate that by the turn of the century a minimum of another half a million offshore companies will have been incorporated world-wide.


Over the last twenty years increasing client demand for offshore facilities has not only resulted in an ever growing number of International Financial Services Centres but also in more competition amongst the existing centres.

The political and economic catalysts that influenced the growth of the offshore industry in the eighties and nineties will continue to influence growth in the next two decades.

These catalysts are:

  • Political and economic instability
  • Market globalisation and deregulation
  • The internationalisation of business
  • The lifting of trade barriers
  • A trend towards steady global economic growth
  • A global relaxation of foreign exchange controls

In addition to political and economic catalysts there are also global tax related catalysts that continue to influence the growth of the offshore industry.

These include:

  • High tax regimes
  • More effective tax recovery
  • The opportunities of utilising double taxation treaties


Going offshore through an IBC (International Business Corporation) allows the owner total control over their assets in the complete PRIVACY of an offshore center. All business, including investments and banking, is conducted under corporate ownership, keeping the name of the shareholders, directors and officers completely private. In the vast majority of cases, the banks are even forbidden by law to disclose client information.

Why not set up a local company to gain privacy? If you live in a non-offshore country, there is no privacy in setting up a local company. Anyone can search the corporate registry for the names of past and current shareholders, directors and officers. Companies formed in Panama, Bahamas, British Virgin Islands (BVI), Costa Rica and other jurisdictions are not subject to such regulatory requirements and benefit from extremely flexible legislation, ease of operations, no taxes and political stability. In most cases, individuals use IBC’s to hold investments, operate bank accounts, own property, protect assets, or conduct business as a trading or shipping company.

A significant proportion of the wealth pouring into Offshore Jurisdictions comes from major corporations, highly placed politicians, and others with knowledge of the benefits of going Offshore.

The body of law that covers new company formations, foundations and trust law is frequently written or updated to provide a globally competitive environment to conduct business with greater levels of privacy and a friendly tax structure. There is a rigorous competition between popular jurisdictions for offshore activities, with legislation changing frequently to provide greater flexibility and increased value to those seeking offshore company and asset protection alternatives. Frequently, there is no corporate income tax for entities incorporated in the most popular jurisdictions (and not doing business locally).

Popular jurisdictions that are friendly to these activities include: Panama , Bahamas , British Virgin Islands (BVI), Costa Rica . Panama is the main source for Private Foundations, which are a mixture between a company and a trust. Although you can establish an Offshore Company in most offshore jurisdictions, the popular jurisdictions are characterized by their privacy laws, established financial structure, government interest in developing commercial transactions that support business growth and friendly tax environments.

However, there are always difficulties with a correct choice of the country of incorporation of the company for any businessman. We advise our clients to consider the factors influencing not only on incorporation, but also on the further activity of the company when choosing jurisdiction.

Usually mark out three groups of the countries differing on a level of the taxation, the state control of commercial activity, confidentiality of the information and other criteria.

In the first group are industrially developed countries where significant part of business profit is spent on payment of taxes and many sides of business activities are strictly regulated. So, there is no sense to register there the company for tax planning.

The second group includes the countries with moderate tax system, the tax and currency control, namely: Canada, The Great Britain, Hong Kong, Iceland, Ireland, Labuan (Malaysia), Liechtenstein, Luxembourg, Madeira, Malaysia, Malta, Mauritius - Global Business Company 1 (GBC1),The Netherlands,The Netherlands Antilles, New Zealand, Uruguay, Singapore (non-resident companies), Switzerland, Estonia, in the US (LLCs):Arkansas,California, Delaware, Florida, New York, Wyoming and others.

And, the third group of the countries, where the procedure of incorporation of legal entities is extremely simplified and income taxes are considerably reduced, holds special position. They usually are called as "tax harbors" or offshore centers. The concept offshore (from the English word "offshore") means "other coast" that the company carries out its activity behind the borders of the country of incorporation. We offer incorporation in the following offshore jurisdictions: Bahamas, Belize, British Virgin Islands, Cayman islands, Cook islands, Cyprus, Dominica, Guernsey, Isle of Man, Jersey, Marshall Islands, Mauritius - Global Business Company 2 (GBC2), Nevis, Panama, Seychelles, St. Lucia, St. Vincent and The Grenadines, Turks and Caicos Islands and more others.

Company incorporation in "the third group of countries" is characterized by the following features:

- small expenses;

- simplicity and minimal time of incorporation, availability of ready-made companies;

- as a rule, absence of any taxes except duty on tax exemption;

- personal presence for company incorporation is not required;

- names and addresses of shareholders and directors are not filed with the Register of Companies, and declared only in the documents of the company;

- an opportunity to use the services of nominee directors and shareholders, that allows to not disclose the names ofbeneficial owners of the company;

- allowed business activities - all, except specially licensed, necessity of special license to conduct bank, insurance and trust activities;

- ownership of immovable property and operations with residents of an offshore zone are restricted;

- necessity of presence of the Registered Agentinthe country ofincorporation;

- authorized share capital of the company and there are no requirements about obligatory payment and quotation of the minimum and maximum limits;

- issuance of par value and non – par value registered and bearer shares is allowed;

- there are no requirements to a nationality, citizenship, and professional skills of directors and shareholders;

- meetings of directors / shareholders may be held in any part of the world, it is possible to hold the meetings by means of telecommunication and the minutes of meetings may be kept in any place;

- accountancy is not required, there are no requirements for preparation of annual report and its audit;

- there is no currency control;

- confidentiality of information about the company and bank operations is maintained.

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