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There is no such thing as one best offshore jurisdiction that all entrepreneurs agree on. Every offshore jurisdiction has its own set of policies and related regulations. Thus, each one brings you different advantages that fit your current needs.
We have listed out some popular countries where you should take into account for your offshore company incorporation:
Belize: If you are looking for an offshore jurisdiction with a competitive price, fast incorporation, and ease of banking needs, do not miss out on Belize in your consideration list.
Cayman Islands: Located in the western Caribbean Sea, this is a very common choice for most foreign investors who are seeking tax-free benefits.
The British Virgin Islands: BVI and Cayman Islands share many common features. But a plus is that the incorporation cost in the BVI tends to be much more affordable than that in the Cayman Islands.
United Kingdom: The UK is ranked in the top 10 nations worldwide for ease of doing business by the World Bank. A large network of tax treaties (with 130 countries) is also an advantage to consider this country.
Seychelles: The country is positioned as a place of favor for manufacturing and trading between Africa, Europe, and Asia. Incorporating a Seychelles IBC is an option to go among many choices of a tax haven.
Hong Kong: Startups, SMEs, foreign investors are big fans of Hong Kong. Two key highlights to urge business people to move to Hong Kong: Two-tier profits tax system, and its strategic location as a gateway to Mainland China.
Singapore: This is a promising destination for offshore seekers, especially fintech enterprises. Its reputation, supportive trading platforms and friendly tax regime are persuasive reasons leading Singapore to a top of choice.
Unlock our full comparison of the 20 best offshore company jurisdictions with key characteristics of each. Or, you can discover in detail the top 6 best offshore company jurisdictions for foreigners.
After finalizing the place of incorporation and having your offshore plan ready, the next step is to set up your company. Here is the general incorporation process. Please note that things may get slightly different according to different jurisdictions.
There are tons of different types of business entities. Each type will bear different key characteristics. When choosing your type of entity, you should consider the following aspects:
The advice is to go for the type of company that has a separate legal status.
Singapore Offshore CompanyThis allows your company to hold its own liabilities. It can enter contracts, agreements, buy and sell property, take loans, sue, and be sued in its own name. You and other shareholders/owners will not hold any personal liability that goes beyond the capital contribution.
In case your company got into big debts or even went bankrupt, the only loss you would bear is the money for capital contribution. Other personal assets would still be safe in your home country. A separate legal entity guarantees you a high degree of safety.
That said, there are still cases where you may find that a partnership or other special structures are more beneficial. And it all depends on your specific situation.
Each jurisdiction has a different set of requirements and incorporation process. Some jurisdictions advise foreigners to register their companies through the services of a licensed provider. The reason is that foreigners do not have specific tools and accounts to register on their own.
Even when it is not compulsory, you are still recommended to use an incorporation service. Of course, you can do it yourself but that would cost tons of time and effort. So why not leave the hard work to the professionals?
They have more experience and know exactly what needs to be done. The big plus is their services usually come in one package, which can help you easily satisfy all incorporation requirements.
All you need to do is find a trustworthy provider for your offshore incorporation, pay for the service, and supply required documents upon request. They will take care of the whole registration process so you don’t need to deal with hassle paperwork. No travel is needed. All can be done online.
After your offshore company is registered, the service provider can continue to support you on other post-incorporation matters such as bank account opening and tax (these are painful).
Upon the successful payment for the service, the provider will ask you to provide certain kinds of information and documents. This is known as the know-your-customer procedure (or KYC). Normally, the required documents include:
Once collecting everything needed, the service provider will start to register an offshore company on your behalf. They will proceed to file an application and submit it to the local government for approval.
If you aim to do it by yourself, you will need to file everything and submit it to the local company registrar.
Part 5: Bank Account for Offshore Company
Your offshore company is ready, but that’s not enough to start the business. It needs a place to store its money when transacting with clients, customers, and business partners.
Opening a bank account is always the top concern for business owners. An offshore bank account is very important because it is the best way to separate your business money from your personal assets.
You can open your company and its bank account in the same offshore jurisdiction. However, many jurisdictions allow your company to open an account in another foreign country. For example, you can register a company in BVI and open a bank account in Singapore.
You can consider another jurisdiction to open a bank account to seek better tax optimization, better security, services, and interest rates, or currency diversification. Here is an example list of popular offshore jurisdictions for banking:
Singapore Company Incorporation ServicesIn most cases, the provider of incorporation service also supplies bank account opening service. And you should use this service too. Each bank has a different set of conditions to approve your application. If you do not have experience in dealing with offshore banks, the process can get very messed up, and this can result in unpleasant consequences.
A professional will help you choose the right bank for your business, generally review your current situation, file a well-prepared application, and apply it to the bank on your behalf. They make sure everything is done correctly and stays on the right track.
As mentioned above, opening an offshore bank account is not an easy task. And you will want to do it in the right way.
Discover our step-by-step guide on how to open an offshore bank account right now!
Due to the difficulty of applying with traditional banks, many global business owners have turned to a fin-tech solution. Many financial institutions are now capable of providing you with a corporate account that can function just like a traditional bank account.
Your offshore company can still transfer and receive money from customers internationally. The network of money transfers can go as large as 80+ countries. Multiple currencies are also supported (can go up to 50+ different currencies).
The best part is that the application process can be done completely online in a short period of time. The afterward interview for verification can also be done online. These are big advantages over traditional banks. Banks normally have a much-more-hassle process and they require you to have a direct meeting with them for an interview (a few do accept online interviews).
Before making a decision, you should weigh your options between traditional banks and these financial institutions. Again, consultation from professionals is highly recommended. We have experience in dealing with banks and we are also partners with the above institutions. Contact us now to save your time!
Now you get the idea of an offshore company and how to build it. Let’s go deeper into the common particular use of them.
Using offshore companies for trading business purposes is very popular. With the development of technology, now you can set up an online business without any hassle. You can register your offshore company in one country, get supplies from another and sell them to a third nation, while managing your company right at your home.
Hong Kong is the gateway to a huge potential market in China. Meanwhile, Singapore has one of the best banking systems and financial services in the world. These are the typical characteristics that can greatly benefit your trading business on a global scale.
Your offshore company can hold a number of shares in another foreign company and receive dividends as a main source of income. It can also hold other types of assets like patents and trademarks, rent them or sell them overseas to make profits.
For holding business, you should consider countries with strong intellectual property (IP) regimes to ensure privacy and protection for your assets. Additional network of international tax treaties is a plus. Don’t forget to look into the international rules and how dividends, royalties, and other related income are taxed in both your place(s) of incorporation.
