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Simply put, an offshore company is a normal limited liability structure
used legally by organisations and individuals throughout the world
to trade, hold wealth, own property, and carry on business just
like any other company.
What makes an offshore company distinct
from a domestic company?
Unlike companies incorporated in an individual's or a corporation's
home country, an offshore company incorporated in an offshore centre
may offer the owner :
- Low or zero taxation in the country where the company is incorporated.
- A greater degree of privacy.
- Less bureaucracy.
- To reduce costs.
These features make offshore companies ideal structures for safeguarding
an individual's privacy, protecting personal wealth, minimising tax
and maximising a corporation's profit.
Why
do tax havens and offshore financial centres offer low or zero tax?
The governments of many countries actively seek international investment
and trade to stimulate their own economies. The offshore industry
has developed as a result of this straightforward objective.
Many of these countries are known as tax havens. Traditionally, tax
havens are free from foreign exchange controls and have introduced
specific legislation and corporate structures, designed exclusively
for international business and foreign investment. An International
Business Company, or an IBC, is the most widely used corporate vehicle
in this regard with the widest variety of applications.
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