Off-shoring the banking to a tax haven leads to innumerable benefits for the person who is indulging in it.
Few people know that you can even offshore companies for tax benefits.
Such an arrangement is called an IBC or International business company.
This type of company is created under a company act called the Caribbean Style company act.
However this type of act is not used as commonly as the Channel Islands model which is used to create off-shored companies in Europe, the Turks and Caicos islands and St.
Kitts.
An IBC or off-shored company can be defined as a company that is created in a tax haven specifically for the purpose of doing business all over the world except the country of incorporation.
However, the company owner cannot sell items in the off-shored country but they may lease land for even fifty years depending on the country and it may conduct business with other local IBS's in the same country and even enjoy local banking facilities.
Almost all IBC's conduct financial business without any problems from wherever they are located and this has a lot of benefits for the parent company.
Some of the benefits are as follows.
Annual meeting need not be conducted and telephonic meeting can be held as needed and the directors, shareholders and officers can be of any nationality and their names can be kept private if needed.
Also the company can save money on reduced professional fees in certain countries.
Depending on your needs you can select a tax haven where you have to pay little to no tax and which has no corporate tax imposed on the company.
However if you have decided to offshore your company then you should make sure communication links to the company are taken care of as crucial instructions need to be transmitted immediately and communication is important for the success of your business.
You should also make sure the privacy of your customers is given due importance since off-shoring business can cause privacy issues if they are not foreseen.
When choosing a tax haven you should make sure the country is stable and that you do not get stigmatized because of choosing such a location in the future.
It is better to choose an old and trusted country for opening an international company than a new one.
Countries like Australia, Quebec in Canada, Ireland, Spain, South Africa, Venezuela, Greece are places where the unhealthy trade practices have forced the local people to resort to bank offshore or maintain bank accounts offshore due to the inherent risks of banking in their own country where the security or political situation is not conducive.
This phenomenon of capital leaving the country due to certain disadvantages is known as flight capital and this is a major cause of offshore banking.
Hence it can be seen that the benefits of maintaining an offshore company will give you a lot of tax benefits but one must be careful of the country that one chooses to start the company in.
You should be fluent in the native language of the country to avoid being cheated and it is better to invest in English speaking countries if you can converse and read only English.
Choose your offshore company location with care to reap huge benefits in terms of stability and profitability