When the word “offshore” comes to mind, many people tend to immediately associate it with some dodgy approach to obtain some sort of an illegal financial gain. That’s far from being truth though and we’ll go through a short and direct explanation about what creating and setting up an offshore company really means, as well as some of its main advantages for the respective owners.
An offshore company is a type of a legal entity that can be created by a business owner, in most cases only for the sake of seeking clear benefits from a less heavy taxation system. It happens when a “mother company” from a certain country decides to open an offshore corporation in a different country where the business owner already knows he’s going to be able to save some money by not paying as many taxes as he would if he had kept his tax residence in his original country. You can collect a lot more information on this and a lot of other related matters on GWS, an offshore service provider with several offices established in many places across the world.
Obtaining a direct financial benefit from paying less taxes isn’t however the only reason why companies decide to create an offshore company. Among several other motives, business owners also go after this solution because in some cases it allows them to improve the confidentiality levels. When a company opens an offshore corporation they’re often granted the right to keep most of their financial information private and far from any unwanted attentions. As we can all understand, this can easily turn out to be a very interesting advantage for some of those companies who are simply looking to hide information from the public eye and regulatory agencies.
Besides these two main advantages of setting up an offshore company, there are still a few more that we should also keep in mind when bringing up this topic. Factors like needing very few capital to register an offshore company, its low maintenance costs, reduced administration requirements or simply having your assets better protected, are all additional motives that lead many business owners to opt for this strategy.
Sources: unitrustcapital.com / gws-offshore.com / cnn.com / forbes.com