At the moment, the differences between a structure that is not an offshore company? and an organization registered in the preferential tax zone are more than significant. This fact stimulates many entrepreneurs to open companies in offshore zones.
Types and essence of offshore zones
Among large companies, and not only, offshore zones have become quite popular. They should be understood as a country or its part in which there is no tax burden. This means that companies registered in such a territory will not have to pay taxes. But for this it is necessary to fulfill certain conditions, which usually come down to the payment of an annual contribution and the absence of activities in the territory of this jurisdiction.
Such zones can be divided into three key groups:
- The first one. This group includes those jurisdictions in the territory of which there are no financial statements and low taxation. Moreover, companies registered in such countries can expect a high level of confidentiality. Such zones are used as the final destination where funds from various organizations are accumulated.
- The second one. In this case, we are talking about territories, which are characterized not only by tangible financial benefits, but also financial statements. It is in jurisdictions of this type that financial and business operations can be carried out, but provided that they are carried out within the framework of one state. Examples of such zones include Cyprus, the states of Wyoming and Delaware (USA).
- The third. This group of offshore territories includes Western European countries using the international agreement regarding the absence of double taxation. They provide various companies with the possibility of residency, with the right to subsequent management by non-residents of the country. The characteristics of this group are relevant for the UK, Netherlands, Belgium, Luxembourg and Switzerland.
What is an offshore company?
Based on the above information, it is not difficult to draw the following conclusion: an offshore company is a company that has passed the registration process in the jurisdiction where there is preferential taxation and there is no currency control. It is also worth understanding the following fact: such legal entities are managed by non-residents of the offshore country. And besides, they do not carry out any economic activity on the territory of the state where they are registered.
Continuing to understand what an offshore company is, it is necessary to pay attention to the need for an inter-trust agreement for full-fledged work in other countries of the legal entity that was registered in the preferential tax zone.
Why register offshore companies
There are several good reasons justifying the existence of legal entities of this type:
- Participation in business. For many companies engaged in foreign economic activity, tax optimization, accelerating financial flows and simplifying work with documentation are relevant. Such organizations also use offshore zones to protect their financial resources from possible illegal claims by fiscal authorities. In fact, such a company acts as an intermediary, connecting the buyer, conducting international business and the seller, registered a legal entity in the offshore zone.
- Storage of funds. There are many businessmen who have managed to accumulate significant amounts and are interested both in their safety and in the free movement of equity at the international level. In this case, it's time to remember what an offshore company is. By opening such a legal entity, the owner of the enterprise or, say, a bank, will be able to maintain confidentiality (no one will know that it was he who opened the company), not depend on the political situation in the state in whose territory his business operates, and significantly save on taxes.
- Import of fixed assets. Zones with existing tax incentives are ideal for moving fixed assets of enterprises. Suppose a need arose to import a particular production line. To reduce the amount of tax payments, this line is purchased in the name of an offshore company, after which it is introduced as a statutory fund.
Obviously, for many Russian businessmen it is extremely beneficial to transfer capital to countries with tax breaks and a lack of financial reporting.
If the entrepreneur does not have the desire to independently register a legal entity in the preferential zone, he can study the list of offshore companies that have already been created and put up for sale.
How are things in Russia
Perhaps not everyone knows this, but within the CIS there is also a territory within which there are significant tax benefits. It is about the Kaliningrad region. Moreover, Russian offshore companies can be registered even by non-residents of this region.
Owners of similar companies in other zones have the opportunity to buy and sell securities in Russia. To carry out such transactions, you will need an agency agreement on behalf of a foreign investor, which may be your own offshore company.
How to recognize an offshore company
There are several ways in which you can determine in which jurisdiction a particular organization is located:
- Use the data available on the official website of the company (see the details and compare with the list of offshore zones).
- Refer to the list of affiliates of the company. We are talking about information relating to legal entities and individuals that influence the activities of the company.
- Submit a request to the organization regarding information regarding its owners. But such a privilege is available mainly to state bodies.
- Use media resources. Some journalists may own information about who owns a particular company.
Company registration
When determining what an offshore company is, it is important to touch on the issue of its registration. In general, this algorithm cannot be called complex. First, the entrepreneur determines the name of the company, after which the local registration agent begins to take certain actions.
If there are no matches of the proposed name, the process of registration of the Memorandum and Articles of Association begins. After that, the entrepreneur is appointed as the first director, and he signs the paper, according to which the agent does not have his own interests in the company and does not claim to own it.
Management process
The ability to manage the company is either a director or an attorney, who acts on the basis of a power of attorney. Moreover, only a bank account can be used as an asset. It is they, in fact, who will have to manage. This can be done via software or fax. As for opening an account, this process can be carried out personally by an entrepreneur or intermediary.
At the same time, participation in offshore companies implies periodic checks by the bank for compliance with the described business lines and the actual turnover on the account. It is also possible to open an account with a Russian bank. In order to use one of the regimes available to non-residents of the Russian Federation, you will have to get accreditation and register with the tax office.
