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The Benefits of Offshore Company Formation
In social circles, the talk of forming an offshore company is considered a smart move. The benefits might be attractive but it still needs great consideration before you should form your own offshore company. It is not easy to start a business even in your own country, what more in an offshore location which you are not familiar with? Whether it is the right or the smartest move to make should be answered with great conviction. And in what jurisdiction will you form it in?
Many people today think of offshore companies in a negative way. One of these negative impressions is that offshore companies are formed to hide shady business and to avoid paying taxes. However, all of these are simply misconceptions and are far from the truth. You can be a legitimate business and use this location as an advantage and nothing is wrong about that.
Good reasons for forming an offshore company are given below.
Your business can be protected legally in an offshore location. In a typical business, your assets are tied to your name, if you are the owner. You name is not tied to an offshore company. This then makes your offshore assets immune to lawsuits and other legal judgments.
Another reason for forming an offshore company is for privacy. If you have a local business, your level of privacy is low compared to an offshore business. You company assets does not remain anonymous here. But this anonymity that you desire is provided in an offshore business.
You gain huge tax savings with an offshore company. However, this will depend on what jurisdiction your business is in. You get huge savings in some jurisdictions. If you are lucky, you can find a jurisdiction that does not impose taxes on your business. Since there are different tax policies in every jurisdiction, you need to do careful research in finding the place where you get the best tax benefits.
Offshore companies are formed for these reasons and more. Offshore companies can also be put at a disadvantage.
The privacy that you enjoy will prevent potential investors or financial partners from determining the actual worth of your business. And if your business is outside the reach of lenders, then they might have second though on granting financial assistance.
You can experience restriction in business activities if restrictions are place don your jurisdiction. You may not be eligible for trade benefits given to US companies.
The negative publicity on offshore companies can affect you as well. This is all because of the negative publicity media gives to offshore companies.
So, if you plan to form an offshore company, do it with great care and privacy.