Regardless of the overall negative reputation concerning such companies, there are a number of substantial financial and legitimate reasons to start your business offshore.
The first question you’d ask yourself may be: „Is it all legal, or am I getting myself into an immoral, shady business?”
The attribution of offshore business into a list of what is moral and what is not may get you even more confused. Let us think in black and white – legal vs. illegal.
Starting an offshore company isn’t about avoiding taxes or just moving your assets to a more financially hospitable country, it’s about going where you`re treated best. Nowadays, you can link the offshore business to transparency and global thinking for the sake of cutting down the tax payments and getting many other cool benefits.
As mentioned above, we don’t want to get into the moralizing aspect of the offshore topic, but we do consider necessary to draw a line between legal and illegal. We are not here to tell you what is right and what is not, however, other people will still do it. That is why we want to help you understand how to present your offshore strategy to the ones that matter.
LEGAL REASONS TO START AN OFFSHORE BUSINESS
1. Fulfilling the legal requirements
Most of the time, you’ll have to purchase the property you need for your business through a local company. Furthermore, it’s better to own property in your own name, because of a various number of historical reasons .
2. Financial safety and confidentiality
Everyone deserves their privacy. What many don’t understand is that wanting privacy doesn’t compulsorily mean wanting to hide your revenue figures. Remember, just because someone may be able to hide behind offshore companies for immoral purposes doesn’t mean it has to be that way for you.
3. Avoid capital gains tax
Some countries might allow you to avoid capital gains tax through indirect transfers of assets, but that’s not generally available, so you should first do your research.
4. Favorable legal frameworks
If you happen to live in a country where things are pretty unclear and shady, you can opt to pay higher taxes in order to benefit from a better legal framework. In such cases, opening an offshore business in a favorable legal environment should not depend on any tax issues.
5. Tax-neutral locations
An investment fund conducted by people from different countries may need a tax-neutral location in order to combine their capital.
6. Asset Protection
Some open offshore companies in order to hide their assets from creditors, attorneys, ex-family members, etc. The cool thing is that you can indeed receive enough asset protection from your offshore business, so that no unscrupulous person could ever lay his hands on your money.
7. Lower taxes
You can set up your company offshore to get a more competitive tax rate. Still, you have to remember there are some established principles in every country. That’s where moralizing comes forward, because you have to be sure you are benefiting from that lower tax rate legally .
8. Banking infrastructure
Different countries have different bank policies, that’s why they could reject your foreign company or even not accept your local one. Thus, you may choose to open an offshore business that will provide you easier access to certain banks.
CONCLUSION
Offshore companies are not a mix of bureaucracy, immorality or tax evasion. Most of the time, bad isolated cases and media make everything that is offshore seem like shady or even criminal activity.
Frankly, if you’re going to pay taxes for your company, you’d better pay it somewhere where they respect your integrity and your business investments.
That’s enough reason to go where they’ll treat you best!
